Denied stay of commission link-outs headwind for Apple, says JPMorgan

JPMorgan says the United States Court of Appeals for the Ninth Circuit yesterday afternoon denied Apple’s (AAPL) plea to stay the implementation of the prior order from Judge Gonzalez, that enforced Apple to allow link-out payments for applications at 0% commission versus 27% prior. Although the denial of a stay is a headwind for Apple, the magnitude of impact is likely to be materially lower than currently being feared by investors, the analyst tells investors in a research note. JPMorgan estimates implementation of the order from Judge Gonzalez translates to a moderation in Services revenue growth of up to 200 basis points, which translates to an earnings headwind of 2%-3%. However, the actual impact will be driven by the adoption rate for link-out payments by consumers, contends the firm. It keeps an Overweight rating on Apple.