Dan Howley, technical editor of Yahoo Finance, summarizes the latest in the antitrust app store hearing and why analysts are optimistic about Apple’s stock ahead of the earnings announcement.
Video transcription
ADAM SHAPIRO: There’s nothing fake about what’s happening on Capitol Hill – a Senate hearing, an antitrust hearing on Apple’s store. Dan Howley follows everything Apple does for us. And where do we stand in this? Is it the Mel Brooks screenplay, or is something nefarious going on?
THEN HOWLEY: I guess … I’ve never seen “Blazing Saddles” before, so I have no idea how to make that comparison. I don’t know why I haven’t seen it yet. But I will say the hearing itself is particularly serious, especially after Apple’s event yesterday. Now there are three companies besides Apple and Google: Match Group, Tile and Spotify.
The reason it’s so important that those three are there is because Apple announced yesterday that it is getting into the podcast game with a subscription podcast service. That would definitely upset Spotify, as Apple and Spotify have some kind of bitter relationship – in fact, Spotify says Apple is making it harder for them to operate on their platform than it needs to be, simply because Apple has Apple Music and wants to beat Spotify.
And then Tile, as Tile has accused Apple of making it difficult to use their service on Apple’s products, specifically by asking people to respond to requests from their iPhone to let Tile track their location or use location services. Now Apple has just launched its AirTags, which is basically a tiling device of sorts. And it doesn’t have to keep asking those kinds of requests over and over again.
So both companies really have more ammunition after yesterday at Apple’s event for today’s hearing. Now, whether Apple will come or not – something will come of it, as far as Apple is dealing with antitrust here in the US, that remains to be seen. Essentially, the main argument is that Apple’s policies in the App Store are not being used fairly across the board. There may be several circumstances in which they allow certain developers leniency.
We saw that to some extent with Amazon in the Amazon Prime Video deal, which we got on iOS. And so that’s really the crux of the argument here from these app developers. Apple doesn’t make it easy for them, and by the way, they also charge 30% for apps sold through their store or for services sold through their store if they make more than $ 1 million a year in revenue.
Then again, Apple says, look, we built this App Store. This is ours. We give you the tools to make millions from the App Store and reach our huge range of customers. And you know, Apple customers pay more than Google customers for apps. So Apple is basically saying, look, this wouldn’t exist if we hadn’t been there.
You have to be honestly grateful that it is there. And the app developers say, you know, you are just making it incredibly unfair to us, and you are also charging us more than we would like you to charge us by forcing us to use your sales platform. So really, it’s a little back and forth. We don’t know where it will go yet. We’ve heard of studies on Apple, of course. And so far we’ve only gotten something from Google and Amazon – Facebook as far as antitrust is concerned.
SEANA SMITH: Well Dan, speaking of Apple now, I mean, we see the stock going up a little bit today – just about 2/10 of a percent. But we got a bullish message from Katy Huberty of Morgan Stanley – people are really listening to what she has to say about Apple. And she’s pretty optimistic about what to expect in their earnings report next week. What did you make of that note?
THEN HOWLEY: Yes, it seems like it is especially quite grand in what Apple announced at its previous event, as well as the iPhone’s ability to continue to do well in terms of sales. There is also a kind of revaluation of the share price based on the performance of recent months.
You know, Apple really is the type of company … see, it’s cyclical like everything else because it’s a consumer goods company. They’re doing their best in the previous quarter – Q4, Q1, now in a red Q2. So I think for Apple it’s really going to focus on whether or not it will support iPhone sales during the holiday season.
And then the back to school, or rather, home work and home sales school would have done very well for Mac and iPad. So if they can keep up with that momentum with these new iMax and iPads, you know, that would be interesting to see. We won’t get that in the most recent quarter or current quarter just because they’re just on sale – or not even on sale yet. They are not even in the hands of consumers yet, they will go on sale soon and will be in the hands of consumers in the second half of May.
That sort of thing makes you think there could be some shipping delays due to this major chip shortage that we are experiencing. But see, the point is whether they can keep updating their product portfolio and keep customers interested. And it seems they can.