Apple App Store Growth Starting To Decelerate, BofA Says

Growth in Apple Inc’s AAPL global app store revenues started to slow in the fiscal fourth quarter, given tough comparisons and continued economic reopening, according to BofA Securities.

The Apple Analyst: Wamsi Mohan maintained a Neutral rating for Apple, with the price target unchanged at $160.

The Apple Thesis: The company’s global app store revenues decelerated to 12% year-on-year in July, versus 37% in the same month last year, 17% in June and 16% in the fiscal third quarter, Mohan said in the note to clients.

“Apple faces tough compares given lockdowns drove a significant increase in App Store activity last year,” the analyst noted. He further stated that a major state-owned Chinese newspaper Xinhua had hinted at the possibility of a regulatory crackdown on gaming.

“After increasing 33% y/y in F3Q, we model total Apple Services revenue to grow 22% y/y in F4Q21, followed by a deceleration to 16%/13% y/y in F1Q22/F2Q22, respectively. 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 growth,” Mohan wrote.

AAPL Price Action: Shares of Apple are down 0.20% to $148.60 at the time of publication Friday.

Photo: Courtesy of Apple