Apple's EU App Store Sales Remain Steady Despite Regulatory Changes: Report

Recent analysis by Evercore ISI indicates that Apple Inc. (NASDAQ:AAPL) has experienced negligible revenue impact in the EU App Store after complying with the European Union’s Digital Markets Act (DMA).

What Happened: Despite the regulatory changes that took effect in March, the EU App Store, which accounts for less than 1% of Apple’s services sales, has not shown any substantial change in revenue levels, Investing.com reported on Wednesday. The EU App Store revenue saw a 28% increase in March and a 22% rise in April.

Analysts attribute the minimal impact to Apple’s new “Core Technology Fee” for apps downloaded outside the App Store, which they suggest might exceed the conventional 30% cut Apple takes on App Store sales.

Evercore maintains an Outperform rating and a $220 target on Apple.

Analysts caution that if the EU successfully contests the Core Technology Fee in court, the situation could change. However, even if such a challenge affects Apple’s revenue, the company emphasizes that EU App Store revenue is relatively insignificant, making up only about 8% of App Store revenue and less than 1% of Apple’s total revenue.

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Why It Matters: Apple began implementing changes in February to support alternative app stores in the EU. However, in May, Apple faced a $1.95 billion fine from the EU over App Store practices.

Meanwhile, Apple’s defense of App Store fees faced criticism as a U.S. District Judge called out executives and asked for justification of the rates.

Price Action: On Wednesday, Apple’s stock was trading 0.84% higher at $191.59 at the time of writing, according to Benzinga Pro. The company reported Q2 2024 earnings per share (EPS) of $1.53, slightly above the estimated $1.50. The revenue for the quarter was $90.753 billion, surpassing the estimated $90.01 billion.

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Photo by Tada Images on Shutterstock

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari