Last year, Meta Platforms, Microsoft, X (formerly Twitter), Spotify, Match Group, and Epic Games, developer of Fortnite, objected to Apple's plan to charge fees for payments made outside the App Store. Then, in February this year, Beijing suddenly became interested in Apple's App Store policies.
After losing a legal battle against Epic Games, Apple is now obliged to allow developers to link to external payment methods, without imposing fees or restrictions. Еhe story does not end here, as the company has stated its intention to appeal the decision, but the process is obviously not fast.
What does this mean for Apple's profits?
The U.S. App Store alone brought Apple more than $10 billion in revenue in 2024. Overall, the App Store generates about $20 billion annually through commissions. Therefore, if other countries follow suit by challenging Apple's practices, the impact on their profits could be even more significant.
Still, Apple will likely reconsider its commission policy to avoid losing large and medium-sized companies. However, it is too early to say that Apple is in serious trouble or that the second quarter will be a disaster. Other gains, such as higher iPhone prices, could offset losses in one area.
Reports suggest that the next generation of iPhones could cost more, but this would be due to new features and design improvements rather than tariffs on imports from China (where iPhones are assembled) or potential losses from lower App Store fees. It certainly sounds implausible.
This is a good time for Apple product fans to save for the new release in the fall. If demand holds steady with previous years, despite the higher prices, it could boost Apple’s stock and return it to the spotlight as one of the major market movers.
What do analysts say?
Based on consensus valuations, 59% of analysts currently rate Apple stock a “Buy,” 33.9% say “Hold,” and only 6.8% recommend “Sell.” The 12-month average price target is $227.30. As for where the optimism comes from, given all the headwinds mentioned above, part of the answer lies in Morgan Stanley's survey.
According to the bank, Apple's next wave of AI-based features appears to resonate more strongly with U.S. consumers than expected. In addition, among current iPhone users with access to Apple Intelligence, willingness to pay for the service has increased 11% since last fall, reaching an average of $9.11 per month.
