Bank of America: Apple's Q3 App Store revenue is expected to increase by 13% YoY, and EU DMA has little impact on user downloading behavior.

Zhitong Finance ·  Jul 10 22:55

Bank of America analyst said that driven by a 3.2% YoY growth in downloads for iPhone and iPad, Apple's App Store revenue in the third quarter is expected to increase by 13% YoY to $7.5 billion.

According to data from Sensor Tower cited in a report by Bank of America analysts on Tuesday, downloads for iPhone and iPad have driven the App Store revenue to increase by 13% YoY to $7.5 billion in the third quarter.$Apple (AAPL.US)$The analyst maintains a 'buy' rating on Apple with a target price of $230.

Apple did not separately list the App Store's revenue when reporting its service revenue, but analysts and others will provide estimates. Analysts expect that Apple's third-quarter financial report, which will be released early next month, will show that service revenue has increased by 14% year-on-year.

Sensor Tower data shows that after concerns about Apple's sales data in China earlier this year, Apple's sales rebounded in China in April, and Apple's App Store revenue in China increased by 10% in June. In addition, data shows that game revenue from Apple's App Store in the third quarter is expected to increase to $3.9 billion, accounting for 51% of total App Store revenue; revenue from Apple News is expected to account for only 1% of total App Store revenue, but has the largest increase among all applications, with a year-on-year increase of 42%.

Earlier this year, the EU's Digital Markets Act (DMA) came into effect. The law requires Apple to allow EU users to use other app stores or download apps directly from third parties, allowing developers to bypass the commission they need to pay to Apple after users download the app. At the same time, Bank of America analysts pointed out that users' behavior "has not changed significantly", and the number of people using other app stores to download apps is relatively small.

It is worth mentioning that last month, the European Union accused Apple of violating the relevant provisions of the DMA. In the preliminary investigation results, the European Commission stated that Apple did not allow App Store developers to freely introduce other payment methods outside the Apple ecosystem, which violated the DMA's anti-manipulation rules. Margrethe Vestager, head of the EU's antitrust agency, said Apple faces "many very serious" issues regarding DMA compliance, and its "core technology usage fee" does not meet the requirements of DMA.

According to the strict penalty provisions of the DMA, if Apple is found guilty, the company may face a fine of up to 10% of its global annual revenue, which may reach tens of billions of US dollars; if it violates the DMA again, the fine may even rise to 20% of its global annual revenue.

Facing strict supervision and potential huge fines from the European Union, Apple said it will delay the launch of certain features in the EU, such as Apple Intelligence and other generative AI features, because the company is concerned that the interoperability requirements of the DMA may force it to compromise product integrity in a way that endangers user privacy and data security.

Edited by Jeffrey

The translation is provided by third-party software.

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