Wachiwit
Apple (NASDAQ:AAPL) has seen low-double digit growth in App Store revenue in the first part of its fiscal third-quarter, Bank of America said.
Shares were little changed in premarket trading.
App Store revenue (through 66 days) has increased 11% year-over-year to $5.4B, the research firm said, citing data from SensorTower. May was a tick stronger, with global revenue up 12% year-over-year, including a 10% jump in China.
Breaking it down further, revenue attributed to gaming rose 6% year-over-year to $2.8B, accounting for 52% of total App Store revenue, down from 54% in the year-ago period, Bank of America analyst Wamsi Mohan said. Gaming is still the largest segment, with Entertainment, Photo & Video, Social Networking, Music and Other. Productivity, which accounts for 3% of total App Store revenue, had the highest year-over-year growth at 36%.
China saw a bit of a change as gaming revenue declined 2% year-over-year, while entertainment revenue jump 20% year-over-year. The Entertainment segment now accounts for 20% of total App Store revenue in China, up 2 percentage points, Mohan added.
In Europe, there seems to be “minimal effects” of the Digital Markets Act on Apple. “Looking at all EU app store data, total downloads increased +3% y/y while total App store [revenue] increased 25% y/y during the 90-day period,” Mohan wrote. “So far downloads of alternate browsers remains small in EU & overall consumer behavior post DMA remains largely unchanged.”
Total downloads for iPhone and iPad were flat year-over-year at 5.8B.
Mohan reiterated his Buy rating and $230 price target on Apple, citing an expected “multi-year upgrade cycle” as well as the potential for rising gross margins and “secular services growth.”
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