From “Weighing the Antitrust Case Against Google, Apple, Amazon, and Facebook” ($) in last weekend’s magazine:
Apple CEO Tim Cook said this past week that the company doesn’t have a monopoly in its markets. “Our share is much more modest. We don’t have a dominant position in any market,” he told CBS News.
The numbers bear out his statement. In the U.S., for instance, the company’s iPhone had 45% of the market in 2018, according to eMarketer.
But there is another way to measure Apple’s market power, apart from hardware sales. Analysts have said any antitrust probe might focus on Apple’s typical commission of 30% for every app sold on its App Store.
But even in a worst-case scenario where the App Store is regulated, the downside looks relatively limited for Apple. The store represents about 5% of the company’s sales, according to Cowen estimates.
Earlier this month, Morgan Stanley analyst Katy Huberty estimated that if Apple were forced to lower its App Store take rate by 50%, it would negatively affect the company’s value by $13 per share, or 7%. Not a great outcome for shareholders, but certainly not the end of the world.
And before that happens, Apple would surely argue that its App Store, even with its fee structure, has actually supercharged technology innovation over the past decade.
My take: Yup. Worst case not the end of the world. More likely, DOJ finds better things to do.