Apple App Store revenues saw strong end to fourth quarter - Evercore ISI

Investing.com -- Apple Inc's (NASDAQ:AAPL ) revenue from its App Store grew by 14% in September, bringing the growth rate for the unit to 13% for the fourth quarter, according to analysts at Evercore ISI.

In a note to clients, the analysts added that the quarterly figure should support revenue expansion of roughly 14% in Apple's services segment in the quarter ended in September. Apple had guided for double-digit growth.

"More stable growth in China and Japan has been a driver of App Store strength in recent months, likely driven by some new gaming title launches," the Evercore ISI analysts wrote.

They noted that revenues from the App Store in the European Union were up 31% year-on-year in the month of September, despite the implementation of the EU's Digital Markets Act.

Antitrust regulators from the bloc said last month that they had launched proceedings aimed at ensuring Apple is complying with new rules making the tech giant open its closed ecosystem to its rivals. Apple could risk a fine if it does not adhere to the restrictions.

The App Store, along with payments from Alphabet (NASDAQ:GOOGL ) to make Google the default search engine on Apple's browser, are likely the largest components of the services business, the Evercore ISI analysts said.

"[S]o as long as we don’t see any unexpected slowdowns out of either business, the faster growing, newer services should be enough to keep growth in double digits, with potential for upside to the mid-teens," the analysts added.

In the three months until the end of June, revenue at Apple's services operations, which also include Apple Pay and its TV+ streaming platform, rose to $24.2 billion from $21.2 billion in the year-ago period.

The accleration underpinned a 5% uptick in Apple's total revenue, in part by offsetting weaker iPhone demand.

Source: Investing.com