Apple: App Store Growth Accelerated in April

Morgan Stanley analyst Katy Huberty says that Apple’s (NASDAQ:) App Store net revenue growth likely accelerated 8% YoY in April, fueled by China and Gaming.

App Store sales growth soared 6% YoY in Q1 with the analyst reiterating her 15% YoY estimate for Q2 which should see App Store revenue coming in at $7.2 billion for the June quarter.

“While the acceleration in growth is slightly weaker than we expected given the easing Y/Y compares, we see green shoots emerging in important markets and regions. For example, App Store net revenue growth in China, which accounts for 26% of total T12M App Store spend, accelerated from +1% Y/Y in C1Q to +11% Y/Y in April despite an 4 point more challenging Y/Y compare, likely aided by renewed COVID lockdowns in major metropolitan cities,” Huberty said in a client note.

In addition to China, countries like Japan and South Korea, which are the 3rd and 7th largest markets for App Store, respectively, also witnessed improvements.

More importantly, China gaming net revenue likely jumped 6% Y/Y in April, which is an 18-point acceleration from 12% Y/Y declines in the month of March.

Beyond the June quarter, Huberty expects App Store growth to continue reaccelerating through the year.

“With the health of the consumer, and the potential shifting nature of consumers spending patterns, a notable debate entering the summer months, an acceleration in App Store growth should help to dispel the bear concern of a more permanent App Store slowdown,” the analyst concluded.

By Senad Karaahmetovic