By Investing.com — App Store revenue grew by 15% year-over-year in the first quarter of fiscal 2025, reaching $8.1 billion, Bank of America revealed Friday, citing data from SensorTower.
Downloads across iPhone and iPad rose 7.6% to 8.8 billion during the same period. In December alone, global App Store revenue increased by 12.7% year-over-year, with China posting a 7.2% rise.
On a per-download basis, revenue grew by 7.3% year-over-year for the full quarter.
Bank of America analysts reiterated a Buy rating on Apple (NASDAQ:AAPL) shares, highlighting a “multi-year iPhone upgrade cycle, tailwinds to gross margin, and strong cash flows.” Their price target was unchanged at $256.
Entertainment apps, the second-largest category on the App Store, saw revenue surge 37% year-over-year in the first quarter, making it the second fastest-growing category.
Gaming revenue grew by 5% to $3.9 billion but accounted for 48% of total App Store revenue, down from 53% a year ago.
Games continue to lead in revenue share, followed by Entertainment at 16%, Photo & Video at 7%, Social Networking at 4%, and Music at 3%. Other app categories make up the remaining 21%.
Productivity apps were the fastest-growing segment, with revenue increasing by 48% year-over-year, driven largely by the popularity of ChatGPT, one of 2024’s fastest-growing apps.
“We are seeing strong diversification in app store revs by category away from the Gaming segment as more developers from other categories monetize apps,” analysts led by Wamsi Mohan noted.
According to BofA, European App Store revenue outpaced global growth, rising by 29% year-over-year compared to the 15% global increase.
U.S. revenue grew 14%, while China lagged with a 7% rise. Turkey led growth among major markets with a 90% increase, while Thailand followed at 46%. Hong Kong was the only major market to remain flat.
Bank of America projects 13% year-over-year growth in services revenue for the first quarter and the full fiscal year 2025. The strength of the services segment is viewed as a positive indicator for long-term growth.
