WASHINGTON (AP) — Apple Inc. is facing an impending antitrust lawsuit from the Justice Department, which could be filed as soon as March. While some investors are concerned about the potential impact on the company’s fortunes, many experts are looking beyond the lawsuit and focusing on broader economic factors.
The upcoming lawsuit centers around software and hardware limitations on iPhones and iPads that allegedly hinder competition from other services. Experts suggest that Apple’s stock price could potentially take a hit, particularly due to government scrutiny of its iMessage service. Issues with iMessage have been raised, including Apple customers who are unable to use iMessage on their Macs if they use apps from developer Beeper.
However, not all analysts and investors are worried about the lawsuit’s impact. Many are more focused on Apple’s overall performance and the general economic landscape. They point to recent government crackdowns against Big Tech, such as the Epic Games lawsuit, as evidence that these issues are not new to Wall Street.
Yuri Khodjamirian, the chief information officer at Tema ETFs, believes that the immediate concern for investors is Apple’s lackluster results in recent quarters and projected 3% growth this year. However, Khodjamirian expects a strong increase in iPhone sales, driven by the replacement cycle of the existing base of 2 billion Apple devices worldwide.
Although two analysts have downgraded Apple shares, one analyst at BofA remains optimistic and predicts that the company’s stock could soar nearly 25%. This optimistic outlook is based on expectations of strong iPhone sales, positive foreign-exchange trends, and strength in various markets around the world.
In addition to the impending antitrust lawsuit, Apple is facing legal challenges on multiple fronts. The recent decision by the U.S. Supreme Court not to hear appeals on the Epic Games antitrust ruling has put the spotlight on App Store policies. Apple won most of the counts, but it was found to have violated California’s unfair-competition law. Currently, both Apple and Epic Games are appealing to the Supreme Court.
Apple is also listed among six companies considered “gatekeepers” under Europe’s Digital Markets Act, which aims to reduce anticompetitive behavior. Failure to comply with the law could result in fines and other penalties. Additionally, Apple is involved in a patent dispute with Masimo Corp, related to the sale of Apple Watch Series 9 models equipped with blood-oxygen sensors.
Despite the legal challenges, experts argue that Apple’s integration of hardware and software into user-friendly products presents a difficult case for antitrust lawyers. Apple’s approach has offered value to consumers in terms of security and ease of use. Therefore, it may be challenging to prove anticompetitive behavior in traditional terms.
As the Justice Department prepares to start the case against Apple, attention is also on its antitrust lawsuit against Google’s search business, which is awaiting a federal court’s decision. The outcome of these cases could have significant implications for the tech industry.
In summary, while the impending antitrust lawsuit against Apple has raised concerns among some investors, others are looking beyond the lawsuit to focus on broader economic factors and Apple’s overall performance. The legal challenges, along with market dynamics, will shape the future of the company and the tech industry as a whole.