Apple App Store Growth Starting To Decelerate, BofA Says

Growth in Apple Inc’s (NASDAQ: 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