Apple could lose a third of Google revenue by 2028 from antitrust case: Jefferies

Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) deals with smartphone makers such as Apple (NASDAQ:AAPL) are at the heart of the Department of Justice’s antitrust lawsuit against the search behemoth. If the DOJ ultimately prevails after a series of appeals, the iPhone maker could lose a significant chunk of valuable revenue, investment firm Jefferies said.

“The antitrust expert hosted by our US Internet team believes it could take 3 to 8 years to settle,” analyst Edison Lee wrote in a note to clients. “We est if AAPL loses 1/3 of GOOG rev (US only) as of FY28, our DCF will be ~8% (US$19) lower.”

Lee, who has a Hold rating on Apple, said the decline would only be in the U.S. (though he cautioned other countries may take note if the DOJ wins its case) and assumes there is zero offset from a revenue sharing deal with either Google or other search engines, with this being the most pessimistic outcome.

Despite that overhang, sales of the iPhone 16 and roll out of Apple Intelligence are seen as more important in the near-term, given that the iPhone accounts for roughly half of Apple’s annual revenue, Lee added.

Apple shares fell 1.3% in early trading on Wednesday.