In a bid to fend off some of its latest legal troubles, tech giant Apple (NASDAQ:AAPL) announced plans to modify the App Store to bring it in line with European Union (EU) technology rules. The move didn’t exactly sit well with investors, who sent shares down fractionally in Wednesday morning’s trading.
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Apple, along with other technology firms in the region, has until March 7 to comply with the EU’s new rules about how technology products can operate in that region. In this case, Apple is modifying several of its own proposals to better align with said rules. For example, Apple removed plans to force anyone who wanted to create an “alternative app marketplace” to have a letter of credit on standby at all times.
Further, Apple removed a requirement that new rules be signed “…by each membership that controls, is controlled by, or is under control with another membership.” Language about how an “alternative app marketplace” can be established, though, remains, seemingly with little pushback from the EU itself.
Recovering the Market
Apple’s move comes at a good time here; its sales of iPhone devices in China are still in free-fall as competitor Huawei is taking over a lot of that lost market value. Sales of iPhones were down 24% against this time in 2023, Counterpoint research noted. Meanwhile, Huawei picked up a 64% gain, suggesting that at least some of those former iPhone customers were now backing Huawei. Further, Apple just released new fixes for zero-day vulnerabilities that have already been actively used against users. These fixes target memory corruption issues and will hopefully make the iPhone that much safer to use.
Is Apple a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 16 Buys, nine Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 12.54% rally in its share price over the past year, the average AAPL price target of $205.07 per share implies 20.64% upside potential.
