Evercore: Another boffo month for Apple’s App Store

From a note to clients by analyst Amit Daryanani that landed on my desktop Tuesday:

All You Need to Know: App Store revenue grew 30% in February, another strong month in what has been a great 6 months for the App Store. We estimate total App Store developer revenue grew to ~$4.4bn in February; up 30% Y/Y (vs. +40% in January, +31% in December). The growth in App Store revenue remains relatively broad based, with all categories reporting impressive growth with the exception of Music (+10%). Street models are calling for services growth to decelerate to 16% in the Mar-qtr, after recording 24% growth in the Dec-qtr (Apple guide also calls for services deceleration).

The App Store is only one piece of the services business, but with QTD growth at 35%, we see an increasing likelihood of upside to consensus estimates. The Entertainment segment (41%) remains the best performing segment, likely driven by tailwinds related to numerous streaming service launches. China remains the slowest growing of the major Geo’s with revenue +24%; however, it is still well above the single digit growth rate reported for much of 2020. The solid growth in China also comes despite a difficult comp (lapping COVID tailwinds) and the 24% rate is an improvement vs. the 20% in January.

Net/Net: Despite Apple’s guidance for a Services deceleration in the Mar-qtr, we think growth 20%+ is looking increasingly likely.

Maintains Outperform rating and $163 price target.

My take: The pivot to Services is an old story, but it’s one that has legs.


  1. Fred Stein said:

    Phenomenal growth despite the fact that Apple’s new policy to charge only 15% for developers who netted $1M or less in the prior year became effective 1/1/2021.

    Phenomenal growth validates Apple’s App Store policies; And repudiates the charge of stifling the industry.

    March 2, 2021
  2. Bart Yee said:
    The April earnings report is going to be fun, fun, fun.

    March 2, 2021

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