Apple DOJ Lawsuit Could Challenge 'Core Business Model': Leading Analyst Predicts What's Next For Tech Giant

Technology giant Apple Inc AAPL is facing another case from the U.S. Department of Justice (DOJ).

Here's what one leading analyst says about the case and what could be next for Apple.

What Happened: A long-reported case against Apple by the DOJ is finally here, Wedbush analyst Daniel Ives wrote in a new investor note.

The analyst, who has an Outperform rating and $250 price target, said the antitrust lawsuit announced Thursday will "kick off a stepped up phase of the Beltway going after Apple."

The lawsuit could challenge the "core business model" of Apple, Ives added.

"The key part of the DOJ case will likely argue that Apple unfairly penalizes competitors and tech rivals by blocking other tech players from accessing hardware and software features of its flagship iPhone," Ives said.

The analyst said the lawsuit would escalate antitrust efforts under the Biden Administration with big technology giants Apple, Alphabet Inc GOOGGOOGL, Meta Platforms Inc META and Amazon.com Inc AMZN all targeted in recent years.

A lawsuit against Apple would be the third from the DOJ in 14 years, but mark the first case involving the company's core business model.

Related Link: Apple Q1 Earnings Beat Estimates As Cupertino Snaps 4-Quarter Revenue Decline Streak; Stock Slides On China Weakness

What's Next: Ives said the DOJ lawsuit could take years in the courts.

"Apple has defended its App Store, ecosystem, 30% fee, and business model again and again in the courts and EU and we would expect a similar battle here," Ives said.

The analyst cautioned that while Apple defended itself in the past, the DOJ worked for years to build its case against the technology giant.

"We do not expect any business model changes for now, but Apple clearly is going to have to find a way to eventually settle this case, pay a hefty fine, and ultimately find some compromise with developers on the App Store structure down the road."

AAPL Price Action: Apple shares are down 3.74% to $171.99 on Thursday versus a 52-week trading range of $155.98 to $199.62.

Read Next: Apple Dominates 2023 Smartphone List With 7 Of Top 10 Models: Why It’s Important For iPhone Growth

Photo: Shutterstock