Apple’s App Store regulatory concessions are beginning to register in its financial results, with CFO Kevan Parekh citing changed business models abroad and U.S. link-out rules as factors behind slower Services growth in fiscal Q3 2026.
Apple reported $30.7 billion in Services revenue for the quarter ended in June, up 12% year over year and a June-quarter record. But the figure fell from $30.98 billion in the prior quarter, its first sequential Services decline since 2022. As first reported by 9to5Mac, Parekh told analysts that App Store performance faced both weaker mobile-gaming spending and the financial effects of new regulatory requirements.
Apple does not disclose App Store revenue separately, making it impossible to assign a precise dollar figure to the impact. Still, the company explicitly acknowledged that changes allowing more payment and distribution choice in certain markets are affecting the segment that includes the App Store, Apple Music, iCloud, advertising, and other subscription businesses.
In the United States, the immediate issue is Apple’s compliance with the Epic Games court ruling on external purchase links. Developers can direct users to payment options outside their apps, reducing transactions processed through Apple’s in-app purchase system and potentially cutting the commission Apple collects.
Parekh said Apple continues to operate under that ruling and noted that the Supreme Court will hear Apple’s appeal. Apple nevertheless said the App Store reached a June-quarter revenue record, suggesting the company is describing a growth and monetization headwind rather than an outright retreat in store spending.
The year-over-year comparison was also unusually difficult because the prior-year quarter included the theatrical release of F1 The Movie. Parekh described the film as a meaningful contributor to the prior June and September quarters; Apple had no comparable theatrical release during the latest quarter.
For developers and platform operators, Apple’s disclosure is notable because it turns a long-running regulatory debate into a reported financial variable. The next test will be whether external payments, alternative distribution, and weaker game spending remain isolated pressures—or become a durable drag on the Services business Apple has relied on for its highest-margin growth.
The App Store’s take is under pressure
Apple does not disclose App Store revenue separately, making it impossible to assign a precise dollar figure to the impact. Still, the company explicitly acknowledged that changes allowing more payment and distribution choice in certain markets are affecting the segment that includes the App Store, Apple Music, iCloud, advertising, and other subscription businesses.In the United States, the immediate issue is Apple’s compliance with the Epic Games court ruling on external purchase links. Developers can direct users to payment options outside their apps, reducing transactions processed through Apple’s in-app purchase system and potentially cutting the commission Apple collects.
Parekh said Apple continues to operate under that ruling and noted that the Supreme Court will hear Apple’s appeal. Apple nevertheless said the App Store reached a June-quarter revenue record, suggesting the company is describing a growth and monetization headwind rather than an outright retreat in store spending.
Gaming and a difficult entertainment comparison compounded the slowdown
Apple also pointed to softness in mobile gaming, historically one of the App Store’s most lucrative categories because of recurring in-app purchases. The company did not provide data on game downloads, consumer spending, or developer payment routing, so it remains unclear how much of the result reflects weaker demand versus a lower Apple share of transactions.The year-over-year comparison was also unusually difficult because the prior-year quarter included the theatrical release of F1 The Movie. Parekh described the film as a meaningful contributor to the prior June and September quarters; Apple had no comparable theatrical release during the latest quarter.
For developers and platform operators, Apple’s disclosure is notable because it turns a long-running regulatory debate into a reported financial variable. The next test will be whether external payments, alternative distribution, and weaker game spending remain isolated pressures—or become a durable drag on the Services business Apple has relied on for its highest-margin growth.
References
- Primary source: 9to5mac.com
Published: 2026-07-30T23:50:35+00:00
App Store regulatory changes are beginning to affect Apples Services growth - 9to5Mac
Apple is beginning to feel the impact of regulatory changes to the App Store business model in the US and abroad. Here are the details.9to5mac.com