Apple (NASDAQ:AAPL) has announced a significant move to provide greater flexibility to app developers and users within the European Union (EU). Starting this spring, developers operating only in Europe can distribute their apps directly to EU customers via their own websites, bypassing the App Store. This marks a notable shift in the iPhone maker’s policy and underscores Apple’s commitment to complying with the Digital Markets Act (DMA).
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However, developers will still be required to adhere to Apple’s terms and conditions and obtain authorization from the company. Furthermore, Apple has indicated that developers will continue to pay fees for downloads unless they qualify for an exemption. This step is intended to ensure ongoing adherence to Apple’s revenue-sharing model.
Earlier, Apple reversed its decision to exclude Epic Games from establishing a games store on iOS. These measures come amid mounting pressure from European regulators.
Apple Stock Under Pressure
The changes to Apple’s policies in the European market are expected to hurt its App Store revenue in that region, given that this market constitutes approximately 7% of Apple’s global App Store revenue. In addition, the softness in hardware sales, including iPhones in China, remains a drag.
Given the challenges, Apple stock is down about 10% year-to-date, underperforming the S&P 500’s (SPX) gain of about 7.3%.
However, Evercore analyst Amit Daryanani sees the selloff in Apple stock as “overdone.” The analyst reiterated a Buy on AAPL stock on March 11. Daryanani’s price target of $220 implies 27% upside potential from current levels.
Is Apple a Buy, Hold, or Sell?
The ongoing challenges keep analysts cautiously optimistic about Apple stock. It has 16 Buys, nine Holds, and one Sell recommendation. Analysts’ average price target on AAPL stock is $204.86, implying an upside potential of 18.26% from current levels.
