Apple says gaming slowdown and App Store changes hurt services growth
Apple reported a services revenue of $30.74 billion, missing analyst expectations despite reaching 1.5 billion subscribers. The company attributed the shortfall to a slowdown in mobile gaming, regulatory changes affecting App Store commissions, and unfavorable foreign exchange rates.
Why it matters
As Apple shifts focus toward services to offset hardware fluctuations, regulatory pressure on its App Store model poses a significant risk to its long-term revenue growth.
Apple says it has now topped 1.5 billion subscribers for its services business, up from 1 billion in January 2025. However, this segment of Apple’s business, which includes the Apple Store, AppleCare, music, video, and cloud services, was the only miss in what was otherwise a record-breaking quarter for the company’s hardware sales.
In Apple’s fiscal third quarter, the company reported $30.74 billion in services revenue, falling short of the $31.22 billion Wall Street analysts had expected . Combined with a miss in China , Apple’s stock tumbled over 4% in after-hours trading.
When asked to dive into what led to the decline in services revenue, Apple CFO Kevan Parekh pointed to several factors. Most notable, however, were the impacts on Apple’s cash cow, the App Store.
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