Apple Inc. (NASDAQ:AAPL) accused of price-fixing

Apple Inc. (NASDAQ:AAPL) accused of price-fixing

Apple Inc. (NASDAQ:AAPL) accused of price-fixing

It was not a surprise when Apple was sued last week by app developers who believe there should be more competition in the App Store.

That’s because Apple has been accused of price-fixing or monopolistic abuse before, once regarding their control of e-book prices in the iBookStore developed for iPad, and once around the way Apple prevented rivals from selling music that can be played on the iPod and in iTunes.

In the most recent case, the developers of the “Pure Sweat Basketball” workout app and “Lil’ Baby Names,” a newborn-naming app, allege in a lawsuit filed in a California federal court that Apple’s total control of the App Store, and the pricing regime inside it, stifles competition. Apple also faces a consumer class-action lawsuit in the US on the same issue.

It is not possible to have your app compete on price in the App Store by charging 50 cents

Their argument looks like this: Apple does not allow anyone else to operate the App Store’s gateway function. Neither Amazon nor Facebook, for instance, are allowed to distribute their developers’ apps in the App Store. Everything has to go through Apple. Apple thus faces no price competition on the 30% cut it takes from all in-app revenue. Competing app distributors can’t offer developers a more generous 20% cut to Apple’s developer-customers. And Apple also charges a flat $US99 fee for developers, which is non-negotiable and – you guessed it – is not exposed to any kind of marketplace competition.

Apple also controls the 99 cent pricing structure for apps and in-app purchases. It is not possible to have your app compete on price by charging 50 cents. (Developers must charge at least 99 cents, and can only charge prices higher than that if the price ends in $US.99, the lawsuit claims.)

In its defence, Apple points out the obvious: There is competition. Developers can work with Google if they prefer. Apple built, owns, and maintains the App Store, and thus has a right to charge a fee for developers who want to use it. Neither of these developers would even exist had Apple not built the iOS App Store and launched it, in 2008.

“Developers set the price they want to charge for their app and Apple has no role in that. The vast majority of apps on the App Store are free and Apple gets nothing from them. The only instance where Apple shares in revenue is if the developer chooses to sell digital services through the App Store. Developers have a number of platforms to choose from to deliver their software – from other app stores, to Smart TVs to gaming consoles,” Apple says.

But the lawsuit does raise some basic questions about what a monopoly looks like: Why doesn’t Apple allow non-Apple competition from app distributors inside the App Store? And why aren’t apps allowed to compete on prices?

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 188.14.

The projected upper bound is: 200.17.

The projected lower bound is: 180.20.

The projected closing price is: 190.18.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 91.3321. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 4 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 54.50. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 3 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 162.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 2 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 4.930 at 190.150. Volume was 5% above average (neutral) and Bollinger Bands were 2% wider than normal.

Open High Low Close Volume___
186.510 191.920 185.770 190.150 30,684,392

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 179.88 194.17 190.45
Volatility: 31 33 40
Volume: 28,275,416 28,885,338 34,628,656

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

APPLE INC gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
APPLE INC is currently 0.2% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of AAPL.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on AAPL.O and have had this outlook for the last 19 periods.

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