Apple App Store revenue surged 11%, Bank of America bullish to $230 USD
Apple's App Store revenue grew by 11% in the third quarter, reaching $5.4 billion. Game revenue accounted for 52% of total revenue, slightly lower than the same period last year, but still the largest source of revenue in the App Store. Other categories such as entertainment, photos and videos, social networking, and music also performed well. In the Chinese market, game revenue saw a slight decline, while entertainment revenue achieved a 20% year-on-year growth. In the European market, Apple faces challenges from the "Digital Markets Act," but total downloads increased by 3% year-on-year, and App Store revenue grew by 25% year-on-year. Overall, Apple has the potential for margin improvement and long-term service growth, with a positive outlook
According to the information from Zhitong Finance and Economics APP, Bank of America analyst Wamsi Mohan has given Apple (AAPL.US) a "buy" rating with a target price of $230. Based on the latest analysis from Bank of America, Apple achieved low double-digit growth in App Store revenue in the first half of the third quarter. According to SensorTower data, Apple's App Store revenue increased by 11% year-on-year in 66 days, reaching $5.4 billion. Particularly in May, global revenue increased by 12% year-on-year, with China contributing 10%.
Mohan further broke down the revenue sources, pointing out that game revenue increased by 6% year-on-year to $2.8 billion, accounting for 52% of total revenue, slightly lower than the 54% in the same period last year, but games remain the largest source of revenue in the App Store. In addition, entertainment, photo and video, social networking, music, and other categories also performed well. Productivity category App Store revenue increased by 36% year-on-year, accounting for 3% of total revenue, becoming the fastest-growing part.
In the Chinese market, game revenue slightly decreased by 2% year-on-year, while entertainment revenue achieved a 20% year-on-year growth. Mohan added that the entertainment business currently accounts for 20% of total App Store revenue in China, up 2 percentage points from last year.
In Europe, despite facing challenges from the Digital Markets Act (DMA), the impact on Apple seems insignificant. Mohan wrote in the report, "App Store data observed within the EU shows a 3% year-on-year increase in total downloads, while total App Store revenue in 90 days increased by 25% year-on-year. So far, the download volume of alternative browsers in the EU remains small, and consumer behavior has remained largely unchanged after the implementation of the DMA."
Furthermore, the total downloads of iPhone and iPad remained stable compared to the same period last year, at 5.8 billion times.
Mohan emphasized that Apple is expected to enter a multi-year upgrade cycle, with the potential for margin improvement and long-term service growth, providing investors with positive prospects