Investing.com – App Store revenue grew 15% year-over-year in the first quarter of fiscal 2025, reaching $8.1 billion, Bank of America revealed on Friday, citing data from SensorTower.
Downloads on iPhone and iPad increased 7.6% to 8.8 billion during the same period. In December alone, global App Store revenue increased 12.7% year over year, with China posting a 7.2% increase.
Per download, revenue grew 7.3% year over year for the full quarter.
Bank of America analysts reiterated a Buy rating on Apple (NASDAQ ) stock, highlighting a “multi-year iPhone refresh cycle, tailwinds to gross margin and strong cash flows.” Their price target is remained unchanged at $256.
Entertainment apps, the App Store's second-largest category, saw a 37% year-over-year increase in revenue in the first quarter, making it the second-fastest-growing category.
Gaming revenue grew 5% to $3.9 billion, but accounted for 48% of total App Store revenue, up from 53% a year ago.
Gaming continues to lead revenue share, followed by entertainment at 16%, photos and videos at 7%, social media at 4%, and music at 3%. Other app categories account for the remaining 21%.
Productivity apps were the fastest growing segment, with revenue increasing 48% year over year, driven largely by the popularity of ChatGPT, one of the fastest growing apps in 2024.
“We are seeing strong diversification in app store revolutions by category outside of the gaming segment as more developers in other categories monetize apps,” noted analysts led by Wamsi Mohan.
According to BofA, European App Store revenue outpaced global growth, increasing 29% year-over-year compared to global growth of 15%.
US revenue grew 14%, while China lagged behind with a 7% increase. Türkiye led growth among major markets with an increase of 90%, while Thailand followed with 46%. Hong Kong was the only major market that remained stable.
Bank of America projects 13% year-over-year growth in services revenue for the first quarter and full fiscal year 2025. The strength of the services segment is considered a positive indicator for long-term growth.
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