Recent App Store changes to pose only minimal risk to Apple

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A revision of Apple’s App Store policies surrounding alternate payments, as well as an additional potential one, are unlikely to pose any serious risk to Apple’s bottom line, according to an analyst.

In a note to investors seen by AppleInsider, JP Morgan analyst Samik Chatterjee offers his thoughts on a recent App Store guideline revision, as well as on a proposal by Apple that could see a similar shift in guidelines. In both cases, an antitrust authority has deemed Apple’s ban on alternate payment methods anticompetitive.

On March 30, Apple revised a guideline to allow “reader” apps — or content platforms like Spotify and Netflix — to offer an in-app link to membership sites where users can sign up for or manage accounts.

The change was made to close an investigation by the Japanese Fair Trade Commission into Apple’s anti-steering policies and other App Store rules.

According to Chatterjee, the top 10 reader apps on the App Store make up less than 8% of total revenue in the segment. The top 20 accounts for about 10%, and the top 50 account for 13%. Because of that, the long-term impact is likely to be minimal.

“This suggests that in a worst case scenario where all reader app consumers circumvent App Store payments altogether, which we see as highly unlikely, the impact would be limited to 1-2% of EPS,” the analyst writes.

The second change to Apple’s App Store centers on third-party payment systems within dating apps in the Netherlands. The Dutch antitrust watchdog deemed that Apple broke antitrust rules in the country by not allowing dating apps to offer payment alternatives to in-app purchases.

The company’s latest proposal would allow alternative in-app payments within dating apps in the Netherlands. However, the proposal includes a provision that Apple would still get to collect a 27% cut of those purchases.

Although the proposal has yet to be approved, Chatterjee doesn’t believe it will have much of an effect if it gets the green light and goes into effect.

“As a result, we don’t believe investors should look at this week’s App Store headlines as representing a seismic shift in strategy for Apple, nor do we expect them to have a material impact on App Store take rates,” Chatterjee writes.

Chatterjee maintains his 12-month Apple price target of $210, which is based on a profit-to-earnings multiple of 30x and a calendar year earnings estimate of $6.90.



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