Haitong Securities International·2025-09-04 10:02Investment Rating - The report maintains a positive outlook on the industry, interpreting the recent antitrust ruling favorably for Google, indicating a stable foundation for its business model [2][6][10]. Core Insights - The U.S. District Judge's ruling on September 2, 2025, preserved Google's core business by rejecting the forced breakup of Chrome and Android, which are critical to its traffic and data collection model [6][10]. - The ruling introduces behavioral remedies that will impose ongoing competitive pressure on Google, requiring it to enhance product quality and technical innovation to maintain market share [3][7]. - The emergence of generative AI tools like ChatGPT is recognized as a potential competitive threat to Google's dominance, suggesting that market power may not be permanent [8][10]. Summary by Sections Antitrust Ruling - The court's decision to reject the breakup of Chrome and Android means Google's traffic funnel and data collection model remain intact, which is crucial for its advertising and data ecosystem [2][6]. - The ruling includes behavioral remedies such as banning exclusive default search agreements and requiring data sharing with competitors, which could gradually weaken Google's data advantage over time [12][10]. Competitive Landscape - Google will face sustained but moderate competitive pressure, shifting its reliance from contractual moats to product quality and innovation [3][7]. - The ruling allows competitors like Bing and OpenAI to potentially compete for default search positions, increasing user choice [12][10]. Implications for Apple - Google pays Apple approximately USD 18–20 billion annually for traffic acquisition costs, which supports Apple's service revenue growth. The ruling does not disrupt this model in the short term [9][10]. - However, the ban on exclusivity may enhance Apple's bargaining power, allowing it to negotiate better terms with Google and other competitors [9][10]. Strategic Focus - The ruling reinforces strategic certainty around Google's core ecosystem, enabling management to focus on advancing AI initiatives and cloud expansion [10]. - Long-term, the obligations for data sharing and the ban on exclusivity may pressure Google's advertising profitability [10].