Zhi Tong Cai Jing·2025-05-20 01:55Core Viewpoint - Evercore highlights significant challenges facing Apple's lucrative services business due to ongoing legal disputes with Epic Games and potential impacts from the U.S. Department of Justice's lawsuit against Google [1][2] Group 1: Impact of Legal Disputes - Apple's services revenue is at risk from the ongoing lawsuit with Epic Games, which could affect approximately $7 billion in revenue from U.S. developers [2] - The court ruling mandates that Apple must allow third-party transactions on iOS without charging fees, posing a threat to Apple's revenue model [2] - The potential loss of $7 billion in revenue could lead to a 6% impact on Apple's earnings per share (EPS), although the actual effect may be smaller [2] Group 2: Google Payment and Market Dynamics - Google pays Apple between $20 billion to $24 billion annually to be the default search engine on Safari, with an estimated 50% of this revenue coming from the U.S. market [1] - Concerns arise regarding the sustainability of this revenue due to the rise of AI search options and a historic decline in Safari search volume [1] - The U.S. Department of Justice's proposal for Google to divest its Ad Manager and Ad Exchange could further impact Apple's revenue from this agreement [1] Group 3: Analyst Ratings and Future Outlook - Evercore maintains an "outperform" rating for Apple with a target price of $250 despite the legal challenges [2] - Analysts express concerns that widespread adoption of external payment systems by developers could significantly reduce Apple's App Store revenue, potentially impacting billions of dollars [2]