On Friday, Bernstein maintained its optimistic stance on Apple Inc. (NASDAQ:AAPL), reiterating an Outperform rating on the stock and a $195.00 price target.
The firm addressed the recent Department of Justice (DoJ) antitrust complaint against the tech giant, comparing it to past antitrust cases involving major technology companies. The analysis suggests that a resolution, including potential appeals, could take between three to five years, drawing parallels with previous lawsuits against Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL).
The analyst from Bernstein pointed out that the DoJ's allegations are primarily centered around the iPhone but argued that any potential remedies are unlikely to significantly affect Apple's financials or the iPhone's market position. The worst-case scenario, according to the firm, would involve Apple being fined and possibly having to relax some restrictions on the iOS platform to allow for more competition.
Despite the DoJ's focus on the iPhone, the complaint notably omits any substantial reference to Apple's profitable search arrangement with Google or any direct criticism of the App Store's operations. Bernstein's assessment indicates that these omissions could suggest a limited scope of impact from the DoJ's actions on Apple's services revenue or user retention for the iPhone.
The analysis also touched upon the possibility of the courts mandating equal access for hardware competitors to Apple's application programming interfaces (APIs) and ecosystem.
While this outcome could potentially introduce more competition in markets where Apple has a strong presence, such as smartphones and tablets, Bernstein sees this as a more significant factor for emerging device markets, including wearables and AI-enabled devices like virtual/augmented reality headsets and voice assistants.
In conclusion, Bernstein's position reflects a view that the current antitrust complaint against Apple may have a prolonged timeline and is unlikely to pose a major threat to the company's established markets or its financial stability.
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