Apple App Store revenue rises in June, mix shifts away from gaming

Investing.com -- Apple’s global App Store revenue climbed 12% year over year in June, supported by continued growth outside its traditionally dominant gaming category, according to a note from Bank of America.

Citing SensorTower data, BofA said App Store revenue rose to $8.4 billion in Apple’s fiscal third quarter, an 11.5% increase from the same period last year. Downloads grew more modestly, up 4.3% to 8.6 billion, while revenue per download increased 6.9% to $0.98.

June’s 12% revenue growth outpaced the 3% increase in downloads for the month, reinforcing a positive revenue mix shift, said BofA.

Gaming, while still the largest category, accounted for just 45% of total App Store revenue in the quarter, down from more than 50% in prior years.

BofA noted that “Photo&Video, Lifestyle, Books, Education,&Utilities each grew 100 basis points,” while “Productivity grew 200 basis points, marking the highest percentage change.”

This broadening of revenue streams “may signal legacy game developers to diversify into non-games or expand existing in-app purchasing options,” which BofA believes could be a long-term tailwind for Apple (NASDAQ: AAPL).

“We believe either scenario in the ensuing years could be a long-term tailwind for AAPL’s app store revenue,” the bank wrote.

Despite recent concerns over off-app payments following the Epic Games ruling, BofA said there is “no indication of adverse impact” on revenue to date.

BofA maintained its Buy rating and $235 price target on Apple, citing “strong capital returns, [the company being] eventually winner at AI at the edge and optionality from new products/markets.”

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