:max_bytes(150000):strip_icc()/INV_AppleAppStoreApp_GettyImages-2158694665-ec2362bb916348d99d3d5cf427e354ec.jpg?w=1024&resize=1024,1024&ssl=1 "Apple’s App Store Revenue Seen Rising 13% in Latest Quarter")
Key Takeaways
- Apple’s quarterly App Store revenue is forecast to have risen 13% year-over-year, Bank of America analysts said Tuesday.
- Revenue from the store reportedly rose 10% in China in June amid concerns earlier this year about the company’s growth in that market.
- The analysts also said that the European Union’s Digital Markets Act doesn’t appear to have had much effect on consumer behavior since going into effect in March.
Revenue from Apple’s (AAPL) App Store rose 13% for the fiscal third quarter, according to a new estimate that comes amid concerns about the technology giant’s market share in China and a new European Union law that could affect the service.
Downloads across iPhones and iPads reportedly rose 3.2% from the same time last year, lifting App Store revenue for the latest quarter to $7.5 billion, according to a Tuesday note from Bank of America analysts, citing data from Sensor Tower. The analysts maintained a “buy” rating on Apple stock with a $230 price target.
Apple doesn’t break out App Store sales when reporting its total services revenue, but analysts and others generate estimated figures.
Revenue in China, from Apple News Seen Rising
Following concerning sales numbers for the iPhone maker in China earlier this year, sales rebounded somewhat in April and App Store revenue in China rose 10% in June, according to the Sensor Tower data.
Gaming revenue on the App Store is projected to have risen to $3.9 billion in the quarter, with the segment making up just over half of App Store sales at 51%, down from 54% in the same quarter last year. Apple News represented just 1% of total App Store revenue but was the biggest gainer among the categories, rising 42% year-over-year.
The analysts project 14% growth for total services revenue to be reported when Apple releases earnings early next month, with an additional 15% of year-over-year growth projected for the fourth quarter.
Modest Early Impact for EU’s Digital Markets Act
The E.U.’s Digital Markets Act (DMA) went into effect earlier this year, with the goal of increasing tech competition and reining in the power of big tech “gatekeepers” like Apple, Amazon (AMZN), and Alphabet (GOOGL), among others.
Among the changes the companies have made to their services to comply with the law before it was enacted in March was Apple’s move to allow E.U. users to use alternative app stores or download apps directly from a third party, bypassing the commission that goes to Apple when an app is downloaded through its store. European regulators have told Apple those changes don’t go far enough.
Meanwhile, the Bank of America analysts said consumer behavior was “largely unchanged,” with a relatively small number of downloads using alternative app stores.
The ability for users to opt for default browsers other than Safari has made some impact, with Google Chrome downloads nearly tripling year-over-year to a total of more than 10 million, Bank of America’s report said. The analysts noted, however, that the 10 million is still a fraction of the estimated 200 million to 300 million Apple devices in Europe.
Apple’s shares edged 0.2% higher in recent trading to a bit above $228.
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