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Bank of America analyst Wamsi Mohan reflected on the App Store performance in June. Apple (NASDAQ:AAPL) saw App Store Revenue grow only 2% YoY in June, driven by a disappointing performance in China.
App Store revenue in China fell 6% YoY and 4% compared to May. Still, Mohan remains bullish as China gaming growth continues to outpace global gaming.
“China gaming segment revenue grew 5% y/y in F3Q22, while China gaming downloads declined -7% y/y. Rev growth in China gaming segment can be partially attributed to the easing of gaming licensing restrictions that began in April. As gaming licensing approvals resume we see upside to China App Store growth in F2H22,” Mohan told clients in a note.
In Q3, Global App Store revenue was +5% YoY through June 25th, according to data from SensorTower. The iPhone and iPad downloads were down -0.7% y/y with the average sell price (ASP) per download up 6% y/y.
All in all, the analyst is more constructive on App Store revenue prospects from here given easier comps.
“We note that app store compares get materially easier over the next several qtrs. that can drive a re-acceleration. Over time, we expect Licensing (advertising), Apple Care and new services (TV+, Fitness+, Arcade+, News+, Apple One Subscription bundles) to scale in user content and features, contributing to the overall services revenue growth,” Mohan concluded.
