App Store revenue last month experienced its biggest drop in seven years

Apple’s App Store revenue fell by 5% year-on-year in September, with games revenue down by 14%, according to Sensor Tower analytics. Morgan Stanley, which carried out financial modeling based on the data, said that this was the biggest drop seen since it first started tracking, back in 2015.

During its last earnings call, Apple suggested that year-on-year comparisons are still impacted to some degree by the strong demand for at-home entertainment during the pandemic. While lockdowns were long over by this time last year, it took time for consumers to return to pre-COVID-19 behavior in terms of visiting restaurants, movie theaters, and so on.

Second, sanctions against Russia, and related disruptions to gas supplies, have seen energy prices rise steeply around the world. That is resulting in double-digit inflation in many countries, leaving people with less disposable income. Even many of those who haven’t yet been hit are being more cautious with their discretionary spending in anticipation of tougher times ahead.

App Store revenue could well fall even further this month, as price rises come into effect tomorrow, in Europe and other parts of the world. This increases the cost of both app sales and in-app purchases by a full 20% increase in prices, as Apple protects its revenues against the strong dollar. Additionally, the Cupertino company continues to face antitrust pressures, mostly surrounding its cut of App Store revenue. The latest development is a new investigation in South Korea into net charges exceeding 30%.

However, the bank says that overall Services revenue will continue to grow, though it predicts that the rate of growth is slowing.

Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.

Source - cache | Page ID - 1174

Get instant Updates in Telegram