Analyst says DOJ suit will result in Apple paying a hefty fine, and changing its business model

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Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 11 Pro Max, he has seen smartphones evolve into a global phenomenon.

? According to securities firm Wedbush, Apple may end up having to pay a"hefty fine" but could also be forced to make changes to its business model. Wedbush analyst Daniel Ives, who we've quoted on occasion, is an Apple perma-bull which is to say that he is usually recommending the purchase of Apple's stock.

Commenting about the suit, Ives told clients in a note,"We do not expect any business model changes for now, butclearly is going to have to find a way to eventually settle this case, pay a hefty fine, and ultimately find some compromise with developers on the App Store structure down the road." The analyst has an"Outperform rating" on Apple's stock with a price target of $250. The shares closed Friday at $172.28.

The lawsuit, filed Wednesday morning by the Justice Department along with 16 state and district attorneys general, accused Apple of committing several antitrust violations including one that claims Apple blocked the development of a"super app" that would have made it easier for consumers to switch mobile platforms.

As Ives points out in his note to Wedbush clients, Apple has angered app developers by not allowing them to add a link to third-party payment processors for in-app purchases. Instead, outside of the EU, Apple collects 15%-30% of in-app purchases as it runs these transactions through its own in-app payment platform. As a result of the epic Epic v. Apple lawsuit, Apple does allow developers to include one link to a third-party payment processor but still takes a cut of 12% to 27%.

It probably is in the best interest of Apple not to get bogged down in a long and morale-draining lawsuit. A settlement would help the tech giant put this behind it without spending too much time and money on defending the firm. Besides wondering what constitutes aA discussion is a place, where people can voice their opinion, no matter if it is positive, neutral or negative.

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DOJ sues Apple accusing it of monopolizing the smartphone industryAlan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 11 Pro Max, he has seen smartphones evolve into a global phenomenon.
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