Apple’s (NASDAQ:AAPL) App Store continued its growth trajectory in June, with global revenue rising 12% year over year, according to a research note from Bank of America (BofA). The increase was largely driven by a shift in consumer spending toward non-gaming categories, suggesting a broader revenue base for the tech giant.
Citing data from SensorTower, BofA reported that App Store revenue for Apple’s fiscal third quarter reached approximately $8.4 billion—an 11.5% increase compared to the same quarter last year. App downloads also grew, though at a slower pace of 4.3%, totaling 8.6 billion. Meanwhile, revenue per download rose by 6.9% to $0.98.
June’s performance showed that revenue growth significantly outpaced download growth, highlighting what BofA described as a “positive revenue mix shift.”
Although mobile games continue to generate the largest portion of App Store income, their share dropped to 45% of total revenue in the quarter, down from over 50% in previous years. Other app categories are gaining momentum.
BofA pointed out that “Photo & Video, Lifestyle, Books, Education, & Utilities each grew 100 basis points,” and added, “Productivity grew 200 basis points, marking the highest percentage change.”
This diversification in revenue streams could have broader implications for developers and Apple alike. “This broadening of revenue streams may signal legacy game developers to diversify into non-games or expand existing in-app purchasing options,” the bank said.
“We believe either scenario in the ensuing years could be a long-term tailwind for AAPL’s app store revenue,” BofA added.
Concerns have lingered around the potential impact of the Epic Games legal ruling, particularly with regard to off-app payments. However, BofA found that there is “no indication of adverse impact” on App Store revenues thus far.
The bank reiterated its Buy rating on Apple and maintained a $235 price target, citing multiple bullish factors including “strong capital returns, [the company being] eventually winner at AI at the edge and optionality from new products/markets.”