Apple’s (AAPL) App Store revenue growth appears to be accelerating in February, Morgan Stanley said, citing data from Sensor Tower.
So far, App Store revenue growth in the month has risen 9% year-over-year, Morgan Stanley analyst Erik Woodring pointed out in a research note. “Assuming growth in March is in-line with normal seasonality, App Store would end the quarter up 8-8.5% Y/Y, in-line with [Morgan Stanley estimate] of +8% Y/Y.”
Delving deeper, Woodring, who has a Buy rating and $315 price target on Apple, said February will likely see a 230 basis point acceleration from January. “While the App Store Y/Y compare gets 170bps tougher M/M in March, March quarter App Store revenue would end the quarter in line with our +8% Y/Y forecast if March revenue grows in line with T3Y seasonal average of 10% M/M,” Woodring explained. “Thus, we keep our March quarter App Store growth (+8.0% Y/Y) and March quarter Services growth (+13.5% Y/Y) forecasts unchanged.”
Digging deeper, both China and the U.S. saw improvement in February when compared to January, as China saw 4% year-over-year growth, compared to a 1% decline. The U.S. saw 3% year-over-year growth, compared to a growth rate of 2.6%.
Conversely, Japan is tracking down roughly 1% year-over-year in February, compared to flat year-over-year figures in January. The rest of the world continues to see strong growth, up 22% year-over-year, 340 basis points higher than the 19% growth seen in January.
Separately, Woodring also pointed out that lead times for the Mac are “inflecting higher” thanks to the viral artificial intelligence agent, OpenClaw. As of Feb. 19, lead times in the U.S. for most Mac products were between two and four weeks, with the Mac Studio at 27 days, followed by the MacBook Pro M4 and Mac Mini at 23 and 19 days, respectively.
“We don’t believe this is a function of strength in the PC market because non-Mac PC lead times show no recent sign of a positive inflection,” Woodring posited. “Instead, we believe this [is] a function of Mac-specific demand strength boosted by the popularity of OpenClaw (aka Moltbot), which is meant to run locally on-device (for privacy and performance). While strength across the Mac lineup should likely drive some revenue upside in the March quarter, we’ll keep watching lead times to see how sustainable this trend is.”
Apple is widely expected to unveil several new products early next month, including new Macs.