Evercore ISI noted that although the gaming segment remains soft, revenue from Apple’s App Store appeared to stabilise in December.

In December, App Store revenue recorded year-on-year growth of 6%. Although revenue from gaming apps declined 4% year-on-year during the month, this move still warrants close attention, given that games remain the largest contributor to App Store revenue, accounting for around 44% of the total.

Music, as well as photo and video categories, delivered strong performances, with revenues up 15% and 18% year-on-year respectively. Meanwhile, social networking apps also saw growth of 11%, and the entertainment category posted a 3% year-on-year increase.

App Store revenue accounts for roughly 20% of Apple’s total services income. Apple is well positioned to offset the slowdown in gaming revenue through faster-growing areas such as Apple Pay, iCloud and licensing. This mirrors what was seen in fiscal Q4 2025, when there was around a 4-percentage-point gap between App Store revenue growth and the overall reported growth rate of the services segment.

Apple reported that App Store revenue rose to USD 8.6 billion in the first quarter of fiscal 2026, an increase of 6.8% year-on-year. Over the same period, total downloads on iPhone and iPad platforms grew by 1.5%.

Apple has also appointed Ben Borders as its new Chief Accounting Officer, succeeding Chris Kondo, as part of a planned transition. Borders has been with Apple since 2010 and assumed his new role at the beginning of January.

Market Commentary:

Raymond James has reinstated its Market Perform rating on Apple, highlighting the company’s solid fundamentals and an improving product cycle. However, the firm also noted that the current valuation could cap near-term upside potential.