Apple’s App Store Revenue Growth

According to a report from Bank of America, Apple (NASDAQ:AAPL)’s App Store revenue increased by 14% year-over-year (y/y) in September.

Key Highlights

• Revenue Overview:

  • The increase was driven by strong global demand.
  • App Store revenue for the fourth quarter of fiscal year 2024 (F4Q24) reached $7.8 billion, marking a 13.6% y/y rise.

• App Downloads:

  • Total app downloads (iPhone and iPad) grew by 5.5%, totaling 8.9 billion downloads.

• Entertainment Apps:

  • Despite being the second largest category, Entertainment app revenue grew 33% y/y in F4Q, making it the third fastest-growing category of the quarter.
  • Popular apps like YouTube and TikTok recorded revenue growth of 24% and 52% y/y, respectively.

• Gaming Apps:

  • Gaming apps, though still the revenue leaders of the App Store, saw a 6% y/y growth, totaling $3.9 billion.
  • They now represent 50% of total revenue, down from 54% last year.

• Revenue by Region:

  • In China, one of Apple’s key markets, App Store revenue rose 6% y/y in September.
  • The entertainment segment in China exhibited a 21.9% y/y growth, while gaming revenue remained nearly unchanged at 0.2%.

• Impact of Regulations:

  • BofA noted minimal impact from the European Union’s Digital Markets Act (DMA) on App Store downloads, indicating stable consumer behavior in the region.

• Future Projections:

  • The bank anticipates continued growth in Apple’s services revenue, projecting a 14% y/y increase for both F4Q24 and F1Q25, as the resilience of Apple’s services remains a long-term bullish indicator.