Microsoft app store longer-term Apple risk ‘worth watching,’ says Morgan Stanley

Morgan Stanley analyst Erik Woodring notes that the FT reported Microsoft (MSFT) is evaluating the possible launch of an alternative, gaming-focused, app store on mobile phones starting in 2024. While the firm sees a potential Microsoft gaming app store as "the clearest threat" to the Apple (AAPL) App Store and Google’s (GOOGL) Play Store given Microsoft and Activision’s (ATVI) strong gaming brands, the firm doesn’t see this news as a significant risk for Apple as it believes such a potential app store would be an immaterial risk to Apple at just 3% of App Store revenue and less than 1% of Apple’s total revenue and EPS. However, Microsoft’s strong brand and tech leadership still represents a potential long-term threat to Apple that is "worth watching," added Morgan Stanley, which has an Overweight rating and $180 price target on Apple shares.