Revenue for the App Store appeared to have stabilized in December, investment firm Evercore ISI said, despite the fact that gaming is still showing weakness.
Revenue for the Apple (AAPL) App Store grew 6% year-over-year in December, Evercore analyst Amit Daryanani said, even as gaming saw a 4% decline in December, compared to a 2% drop in November. This is notable, given that gaming is the largest portion of the App Store’s revenue, accounting for roughly 44%. China and Japan showed notable weakness in gaming, with the markets down 13% and 15% year-over-year, respectively, Daryanani added.
Daryanani, who has an Outperform rating and $325 price target on Apple, said music and photo and video were strong, at 15% and 18% year-over-year growth, respectively. Social networking saw an 11% uptick, while entertainment rose 3% year-over-year.
Breaking it down by region, the U.S. grew 3% year-over-year, while China and Japan saw 5% and 3% year-over-year declines.
“Weakness in Gaming, particularly in China and Japan, continues to be a headwind, though overall Gaming compares should begin to improve in Q1:CY26,” Daryanani wrote. “We continue to estimate that the App Store represents ~20% of Services revenues and that AAPL will be able to supplement this softer growth with faster growing areas (Apple Pay, iCloud, Licensing, etc.) as it did in Q4:FY25 (which saw a ~4% delta between App Store revenues and reported Services growth).”