Barclays Sees Apple Vulnerable to TAC Pressure From Google

By Benzinga
December 9, 2021 Updated: December 9, 2021

Barclays analyst Tim Long says he noticed what he believes may be the first step in changing Apple Inc.’s “lucrative, high margin ‘advertising’ revenues,” specifically the traffic acquisition costs.

A new pop-up for the Alphabet Inc. Google Search app on the iPhone “could signal a slight change to the current relationship,” Long tells investors in a research note.

Like other Google TAC agreements, the economics to Apple is based on a “healthy” share on the estimated lifetime search ad revenue generated by each phone, specific to each geography, the sum of which could be about $15 billion annually, Long says.

He believes Apple could be facing TAC pressure from Google and keeps an Equal Weight rating on the shares with a $145 price target, implying a 17 percent downside.

By Anusuya Lahiri 

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