Apple could be hit with ‘incidental damage’ from Google-DOJ case: Barclays

Apple (NASDAQ:AAPL) could wind up being hit with “incidental damage” if the Department of Justice’s antitrust lawsuit against Google (NASDAQ:GOOG) (NASDAQ:GOOGL) plays out as it currently stands, Barclays said.

Shares of the Tim Cook-led Apple were fractionally higher in premarket trading.

“While AAPL is not directly involved in the Google/DoJ case, the outcome could have a meaningful impact on its model,” analyst Tim Long wrote in a note to clients. “While the initial read is fairly negative for AAPL revenues and earnings, there will likely be changes, and also AAPL could backfill lost revenues with its own ad stack over time.” Long has an Underweight rating and $184 price target on Apple.

The revenue that Google pays Apple for traffic acquisition costs could be impacted, which is a significant issue for Apple, given that it is believed to represent about 15% of the iPhone maker’s operating income, Long said.

And while the lawsuit is likely to go through several years of appeals and take years to settle, there is the concern that the percentage could be higher, given “there is no meaningful disclosure on this business,” Long warned.