Two charts from a note to clients by analyst Katy Huberty that landed on my desktop Tuesday:
According to preliminary data from Sensor Tower, total App Store net revenue reached $1.9B in October 2020, up 30.5% Y/Y (Exhibit 1), a 240bps acceleration from September 2020 growth of 28.1% and largely in-line with C3Q20 App Store net revenue growth of 31.2% Y/Y.
Results continue to be broad based, with all of the App Store’s 10 largest markets growing at least 22% Y/Y in October (Exhibit 2).
Cue Exhibits 1 and 2:
Maintains Overweight rating and $136 price target.
My take: So much for Steve Jobs’ plan to run the store on a break even basis.
I agree. PED, you need to fix your title ASAP!
We’re approaching $24B p.a. At 30% YoY, we’d be at $33B in 15 months, which is the earliest data that any .gov intervention on the Google/Apple licensing could take place.
33 – 25 = $9B which is approx the amount (according to un-named sources) that Apple gets from Google.
Thanks Katy
In other words, could Apple do search different(ly), foregoing the cash in favor extending the company’s approach to user privacy? Would that have real appeal to device owners? You are an active commenter on PED30 and I value your views. The questions is of course open to everyone.
I don’t see Apple going head to head with Google over search.
Just as Kleenex is to facial tissue, and Xerox is to dry copying,, and McDonalds is to hamburgers, Google is to search.
Google is top of mind in search, not because its significantly better than other search engines (competitors have mostly caught up), but because of its name. Today the word Google means search.
Apples only saving grace in search is a potential default position in iOS. But that would very likely result in an Internet Explorer type anti-trust action.
I don’t see it happening.
No matter the answers to those questions, I expect the pace of App Store net revenue growth to be positively influenced by the rate of upgrades from legacy iPhones to the iPhone 12 series handsets. The better the handset, the greater the level of user engagement. The average age of an iPhone in use has likely passed its peak.
Off topic, election workers state that as of Saturday 70% (a record) of ballots mailed out have been returned. In Spokane ballots are mailed out to every registered voter without being asked.
Still it took me about an hour to vote, even though the process was well organized and efficient. My estimate: there were more than 300 voters in some stage of the process at any given time. The line had not shortened by the time I left.
Now if only we could get a clear winner and stop the legal infighting.
I neglected to ask about Services. I missed a great opportunity to learn more about Services adoption from an upgrade user.
As an aside I signed up for Apple One Premium (Family plan) today. It was a no brained.
Thanks for the reply. I also consider Apple One to be a real value proposition. Rolled out pretty much in tandem with the iPhone 12, I’m expecting very strong Services revenue growth in the latter half of the December quarter and for the entire March quarter.