What Apple (AAPL)'s Japan App Store Opening Means For Its Services Profit Engine

• Apple recently changed how iOS apps work in Japan, allowing alternative app marketplaces and external payment options to comply with the country’s Mobile Software Competition Act while adding safeguards like app notarization and child protections to address heightened security and privacy risks.
• This shift loosens Apple’s long-standing control over app distribution and payments in a major market, potentially reshaping its high-margin services model and testing how far it can open the ecosystem without weakening its reputation for security.
• We’ll now examine how opening iOS in Japan to alternative marketplaces and payments could influence Apple’s investment narrative around services growth.

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Apple Investment Narrative Recap

To own Apple, you generally have to believe its ecosystem can keep expanding, with high-margin services layering on top of a resilient hardware base. The Japan MSCA changes modestly reinforce the key near term risk: tighter global scrutiny of App Store fees and terms, which could pressure services profitability, but in one market this shift alone does not appear to rewrite the overall investment story.

The Japan update also sits alongside Apple’s broader push to grow services, including plans to show more ads in additional App Store search positions starting next year. That move seeks to deepen monetization of its existing installed base and speaks directly to the same catalyst investors focus on when they talk about services growth: extracting more value per device without eroding trust in security and the user experience.

Yet while services expansion is encouraging, investors should also be aware that ongoing global regulatory pressure on App Store fees and business practices could...

Read the full narrative on Apple (it's free!)

Apple’s narrative projects $477.4 billion revenue and $133.6 billion earnings by 2028. This requires 5.3% yearly revenue growth and about a $34.3 billion earnings increase from $99.3 billion today.

Uncover how Apple's forecasts yield a $286.58 fair value, a 5% upside to its current price.

Exploring Other Perspectives

Across 121 fair value estimates from the Simply Wall St Community, Apple’s perceived worth ranges widely from about US$175 to US$309 per share. Many of these community views sit alongside concerns that tighter global scrutiny of App Store economics could challenge the services growth story and make it even more important to weigh several different scenarios for Apple’s future earnings power.

Explore 121 other fair value estimates on Apple - why the stock might be worth 36% less than the current price!

Build Your Own Apple Narrative

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• A great starting point for your Apple research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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