Apple (NASDAQ:AAPL)
Morgan Stanley said on Wednesday that if Apple (NASDAQ:AAPL) were change its policy and start allowing third-party app stores on iPhones and iPads to comply with specific requirements in the European Union, the change would have “more bark than bite” and have minimal effect on the tech giant.
The analyst Erik Woodring, who has an overweight rating and a $175 price target on Apple stock, said that the App Store is “overwhelmingly” preferred by customers. He also noted that the additional work required to install side-loaded programs has led to “limited” uptake on other platforms.
According to Woodring, if Apple (AAPL) did this, its sales would drop by 1%, and its profits per share would drop by 2.5%.
In a message to investors, Woodring said, “We expect low risk to App Store sales from more App Store competition on iOS.” He also noted that Apple’s probable appeasement of EU authorities might lift a long-standing cloud off Apple’s stock.
On Tuesday, it was reported that Apple (AAPL) employees in software engineering and services were working to open up the company’s platforms in a move that could allow users to download third-party software outside of the App Store and allow businesses to avoid paying Apple (AAPL) commission rates of up to 30%.
This policy change would be a dramatic about-face for Apple (AAPL), which has been very critical of third-party applications due to security and privacy concerns for quite some time. It would also be a massive victory for the European Union and app developers, who have long complained about the astronomical fees charged by Apple (AAPL) and Google (GOOGL) (GOOG), each of which has its own app store.
Although any future change would initially only affect Europe, Woodring said that even if it were implemented worldwide, “extremely minimal possibility” exists of users leaving the App Store for alternatives because of the store’s high value on security, centralization, and ease.
We don’t think [the] report creates a significant danger to App Store revenue/growth, and we’d be purchasers of any negative stock response to this news,” Woodring said.
On Tuesday, Apple stock announced that the Emergency SOS satellite function on the iPhone 14 series will be available in more nations in western Europe.
Featured Image – Pexels © Armand Valendez
Author Shariq Khan 
