"UBS analysis of App Store data shows growth came in at approximately 7% in the March quarter, dragged lower by flattish growth in the U.S. That's a notable step down from the 14% year-over-year Services revenue growth Apple posted in its most recent quarter."
"App Store growth of 7% in the March quarter signals that one of Apple's most profitable sub-segments is losing steam, particularly in its home market. The U.S. App Store, historically a reliable growth engine, appears to have gone essentially flat."
"Apple's Services business has been on a remarkable run. Services revenue hit $30 billion in the December quarter, up 14% year-over-year, an all-time record. The App Store alone serves more than 850 million weekly active users on average."
UBS maintains a Neutral rating and $280 price target on Apple shares, noting a significant slowdown in App Store growth to 7% in the March quarter. This decline contrasts with the 14% year-over-year growth in Services revenue from the previous quarter. Despite this, UBS keeps its Services growth forecast at 14.4% for the March quarter, indicating that other Services categories may compensate for the App Store's stagnation. Apple's Services segment has seen substantial revenue growth, supported by a large installed base of active devices worldwide.
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