Apple reportedly lost a whopping US$84 billion in market value after losing a court case to Fortune game maker, Epic Games last week.
A US district court judge had ruled that Apple cannot bar app developers on its App Store from showing customers other channels by which they can pay the app developers.
It also ruled that Apple cannot stop app developers from using the contact details of customers to reach them directly.
In effect, the court issued a permanent injunction that would let app developers route players to alternative platforms to make payments, allowing them to avoid Apple’s 30% App Store fees.
The ruling immediately caused a 2.5% drop in Apple share value, leading to the US$84 billion fall in market value.
Recovery
But reports say Apple’s shares have this week started inching higher, going up by about 1% before the opening bell Monday. They had closed down 3.3% on Friday.
Analysts said that while the court 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 five 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.
