The App Store’s uneven picture
Apple said App Store performance in the quarter ended in September was roughly flat year over year. Paid subscriptions reached a record, and revenue from third-party apps grew at a double-digit rate. Mobile gaming, however, weighed on the business, and Apple expects those difficulties to continue into the summer quarter.
The broader services business remains sizable, but its growth has slowed as the App Store faces new rules and weaker gaming activity. Estimates from outside analysts published in August put Apple’s US commission revenue down 18%. Brazil and Japan also saw declines after new rules took effect.
Apple’s control over App Store payments has also weakened. After Epic Games sued, Apple had to let apps direct users to external payment systems. Other legal disputes around the world have added pressure.
AI as a revenue path
Parekh described AI as a reason customers might buy a new device to access the latest capabilities. He also pointed to potential growth from third-party apps, partnerships and Apple’s own products. For the December quarter, Apple expects services revenue to grow 8–9%. That forecast includes expected quarterly headwinds, primarily from licensing third-party content, as well as a half-percentage-point impact from foreign exchange.
I think the most consequential part of the AI answer is what Parekh left unspecified. Apple has described possible sources of growth, but not whether it intends to charge AI agents for distribution, take a share of the revenue they generate, or rely on device upgrades and its own services instead. Those are materially different businesses.
The timing matters because the App Store’s old economics are under pressure: commissions have fallen in some markets, while Apple says subscriptions and third-party app revenue are still growing. My guess is that any AI strategy will be judged less by how many apps arrive than by whether Apple can earn from them without rebuilding the payment control that regulators and courts have already constrained.
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