Apple App Store Revenues Report Strong Finish to Fourth Quarter – Evercore ISI

Apple Inc’s revenue from its App Store experienced a 14% increase in September, resulting in a growth rate of 13% for the unit in the fourth quarter, according to analysts at Evercore ISI.

In their analysis, the analysts indicated that this quarterly performance should contribute to an approximate 14% expansion in Apple’s services segment for the quarter ending in September, consistent with Apple’s forecast of double-digit growth.

The analysts observed that more stable growth in China and Japan has been a key factor in the recent success of the App Store, likely bolstered by the launch of new gaming titles.

They also reported that revenues from the App Store within the European Union rose by 31% year-on-year in September, despite the introduction of the EU’s Digital Markets Act.

Last month, antitrust regulators in the EU initiated proceedings to ensure Apple complies with new regulations that require the company to open its ecosystem to competitors. Noncompliance could result in penalties for Apple.

The App Store, along with payments from Google for making its search engine the default on Apple’s browser, are considered major contributors to the services segment, according to the analysts.

The analysts added that provided there are no unanticipated slowdowns in either sector, the growth of newer services should sustain double-digit growth, with potential for mid-teen increases.

For the three-month period ending in June, revenue from Apple’s services, which includes Apple Pay and the TV+ streaming service, rose to $24.2 billion, an increase from $21.2 billion in the same period last year.

This growth helped support a 5% increase in Apple’s overall revenue, partially compensating for decreased demand for iPhones.