Apple Inc's (NASDAQ:AAPL, ETR:APC) App Store revenue continues to grow at a solid pace, but analysts warn that legal risks and slowing momentum could challenge the company’s high-margin Services segment in the coming months.
According to SensorTower data cited by Bank of America and UBS, global App Store revenue rose roughly 11.8% year-over-year in April—broadly in line with March, but down from the 19% growth recorded in January.
UBS analysts noted that April’s growth came against easier year-ago comparisons and shows signs of deceleration heading into the second half of Apple’s fiscal third quarter.
Bank of America, meanwhile, cited stable earnings and strong capital returns, while highlighting 11% year-over-year growth in App Store revenue for the first 35 days of Apple’s June quarter, reaching an estimated $3.3 billion. P
roductivity app revenue, led by OpenAI's ChatGPT, surged 76% year-over-year and now comprises 4% of total App Store revenue.
ChatGPT alone averaged 22 million daily active users on iOS in April, making it Apple’s sixth-highest-grossing app globally so far this year.
UBS flagged that Services will likely drive all of Apple’s revenue growth this quarter, given weakness in iPhone and iPad sales. The firm projects Services revenue to grow 11.1% in the June quarter, but warns that any slowdown in App Store performance could pose downside risks.
Legal overhang
Adding to investor uncertainty is a recent court ruling in Apple’s legal battle with Epic Games. A US court found Apple in violation of a prior injunction, allowing developers to steer users to external payment platforms.
While under appeal, the decision could pressure App Store revenue, especially since the top 100 apps globally account for over one-third of sales.
Apple’s App Store is expected to generate $35 billion in 2025, up from $31 billion last year. But with legal challenges mounting and growth rates moderating, the segment that once offered insulation from hardware cycles may now face its own set of headwinds.
Whether developers begin shifting away from Apple’s in-app payment system en masse remains to be seen, but for now, investors are advised to watch the App Store’s trajectory closely.