Apple shares recover ground after Epic ruling slide
Reuters
Published Sep 13, 2021 06:32
Updated Sep 13, 2021 06:57
(Reuters) -Apple Inc's shares inched higher on Monday after losing about $84 billion in market value in the previous session on the back of a U.S. judge's mixed decision in the iPhone maker's fight with "Fortnite" game maker Epic Games.
Shares were up about 1% before the opening bell on Monday. They had closed down 3.3% on Friday.
The court issued a permanent injunction that would let app developers route players to alternative platforms to make payments, allowing them to avoid Apple (NASDAQ:AAPL)'s 30% App Store fees.
Analysts said that while the ruling had the potential to eat into Apple's services revenue, a big driver of growth in recent years, any hit was still unclear, would be spaced out in time and liable to be only a small fraction of overall income.
"In the end, I expect this to have at most a 2% headwind to overall revenue and 4% to earnings," said Gene Munster, managing partner at tech-centric VC firm Loup Ventures.
"After the first year of these changes, app store growth rates will return to normal. Bottom line, it's at most a one year headwind and does not change the big picture of where Apple is going over the next 5 years."
Wedbush analysts also estimated that in a worst case scenario, Apple would lose roughly 3% of total revenues and would be closer to about a 1% revenue and profit headwind over the next few years, given a vast majority of consumers will continue to use the App Store for in-app purchases.
On Sunday, Epic said in a legal filing that it plans to appeal a ruling in the antitrust case.
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Written By: Reuters
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