Apple’s EU App Store Sales Remain Steady Despite Regulatory Changes: Report – Apple (NASDAQ:AAPL)

The latest analysis by Evercore ISI indicates that Apple Inc. (NASDAQ:AAPL) reported a negligible revenue impact on the EU app store after complying with the EU’s Digital Markets Act (DMA).

What happened: Despite regulatory changes that took effect in March, the EU App Store, which accounts for less than 1% of Apple’s service sales, showed no significant change in revenue levels, Investing.com reported on Wednesday. EU app store revenues grew by 28% in March and 22% in April.

Analysts attribute the minimal impact to a new “core technology fee” charged by Apple for apps downloaded outside the App Store, which they say could exceed Apple’s conventional 30 percent cut of sales in the App Store.

Evercore maintains an Outperform rating and a $220 target for Apple.

Analysts warn that if the EU successfully challenges the basic technology fee in court, the situation could change. However, even if such a challenge affects Apple’s revenues, the company emphasizes that EU App Store revenues are relatively small, accounting for only about 8% of App Store revenues and less than 1% of Apple’s total revenues.

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Why is it important: Apple began rolling out the changes in February to support alternative app stores in the EU. However, in May, Apple was fined $1.95 billion by the EU over its App Store practices.

Meanwhile, Apple’s defense of App Store fees drew criticism when a U.S. district judge summoned executives and asked for justification for the rates.

Reduction: According to Benzinga Pro, Apple shares were 0.84% ​​higher on Wednesday, trading at $191.59 at the time of writing. The company reported second-quarter 2024 earnings per share (EPS) of $1.53, slightly above the estimate of $1.50. Revenue for the quarter was $90.753 billion, topping the $90.01 billion estimate.

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Photo: Tada Images on Shutterstock

This story was generated by Benzinga Neuro and edited by Pooja Rajkumari