Apple Inc (NASDAQ:AAPL, ETR:APC) continues to show strength in its Services business, with global App Store revenue estimated to have increased by 12% year-over-year in June, according to Bank of America analysts.
The firm maintains its ‘Buy’ rating on Apple and $235 price target, pointing to strong capital returns, leadership in on-device AI, and ongoing revenue diversification within the App Store.
Bank of America estimates App Store revenues reached $8.4 billion in fiscal Q3 2025, up 11.5% year-over-year, based on developer-level data from SensorTower.
Downloads across iPhone and iPad rose 4.3% year-over-year to 8.6 billion in the quarter, with dollars per download increasing to $0.98, a 6.9% improvement.
“For the month of June, App Store revenue increased 12% year-over-year globally, outpacing app store download growth of 3% year-over-year,” analysts noted.
Despite regulatory scrutiny and the Epic Games ruling, Bank of America analysts say there's no evidence of a material impact to App Store monetization.
“We do not observe any indication of adverse impact on app store revenue,” they wrote, even as trends toward off-app payments become more common. The bank believes investor concerns around the ruling’s severity “appear to be moot.”
The report also highlights a notable shift in App Store revenue mix, with gaming losing ground to other categories.
While games still generate the largest share of revenue, their portion has dropped from over 50% to 45% in fiscal Q3.
“Games remain as the leader of the global app store revenue by category list, though their share has declined,” the analysts wrote.
Categories such as Photo & Video, Lifestyle, Books, Education, and Utilities each gained 100 basis points year-over-year, while Productivity jumped 200 basis points, the largest gain of any group.
“This mix shift, albeit not as meaningful currently, may signal legacy game developers to diversify into non-games or expand existing in-app purchasing options,” Bank of America wrote.
“We believe either scenario in the ensuing years could be a long-term tailwind for Apple’s App Store revenue.”
Additionally, the top 10 developers globally now account for nearly a quarter of Apple’s year-to-date App Store revenue, according to the firm’s analysis.
This group includes both single-app players like ChatGPT, FUNFLY, and Tinder, as well as diversified developers like Tencent, Google, and TikTok, which maintain broad app portfolios spanning entertainment, utilities, and productivity.
Impact of US-Vietnam trade deal
Meanwhile, proposed tariffs on goods exported from Vietnam into the US will have a minimal impact on Apple, analysts at UBS believe.
While Vietnam has become an increasingly important part of the tech giant’s supply chain diversification strategy, the analysts highlighted that the region still accounts for only a small fraction, roughly 5%, of Apple’s global supply chain footprint.
“Given the relatively small physical footprint and focus on ancillary products, a 20% tariff on imports into the US will have a negligible impact on Apple margins in our view,” they wrote.
They see the financial impact as a “gross margin rounding error.”
UBS estimates that approximately 35 Apple suppliers operate around 38 discrete facilities in Vietnam, concentrated in areas like Bac Giang, Bac Ninh, Hai Phong, Phu Tho, and Vinh Phuc.
In comparison, mainland China still dominates the supply chain, representing over 35% of Apple’s supplier locations globally.
UBS has a ‘Neutral’ rating and $210 price target on Apple, based on about 28 times their calendar year 2026 earnings per share (EPS) estimate, reflecting a higher equity risk premium and interest rates.
“We note our financial projections reflect the impact of the proposed tariffs in the June quarter but not beyond given the fluid nature of the discussions,” they wrote.
Shares of Apple finished Thursday’s trading session at about $213.