App Store growth accelerated in April, claims Morgan Stanley

All aboard the App Store

Apple’s App Store revenue may have increased 8% year-on-year, claims Morgan Stanley citing data from Sensor Tower. Sales in China and of apps in the gaming category are accelerating in contrast to the first quarter, they say.

Morgan Stanley sees ‘green shoots’ for growth

Analyst Katy Huberty thinks Apple has may increase App Store growth, with China compensating for weaker US purchasing patterns.

“While the acceleration in growth is slightly weaker than we expected given the easing Y/Y compares, we see green shoots emerging in important markets and regions,” Morgan Stanley said.

App Store downloads grew 3% year on year and net revenue per download increased 5%.

Other growth signs Morgan Stanley cites include:

• China, which accounts for 26% of App Store spend climbed 11% year on year, driven by games.
• In Japan and South Korea, the #3 and #7 largest App Store markets, App Store trends also improved in April. South Korea grew 18%.
• In total, 4 of the 10 largest App Store markets saw growth in April.
• In the US, App Store net revenue growth decelerated 3 points from March to 6% Y/Y.
• Gaming – the most important App Store segment at 60% of net revenue – saw growth accelerate 5 points.

With all this in mind, Morgan Stanley expects the App Store to generate $7.2 billion of net revenue in the current quarter, up 15%.

“With the health of the consumer, and the potential shifting nature of consumers spending patterns, a notable debate entering the summer months, an acceleration in App Store growth should help to dispel the bear concern of a more permanent App Store slowdown,” the analyst said.

Apple protected customers from more than $1.5 billion in potentially fraudulent transactions in 2020

Apple is pruning the App Store for a new season

Apple recently announced its latest wave of pruning at the App Store.

It is going to remove apps that don’t follow current review guidelines or are outdated. This is designed to boost discoverability (by getting rid of old or flawed apps in favor of those that work), security, privacy and to boost the user experience. 91% of mobile games now give consumers the App Tracking Transparency prompts.

[Also read: Apple’s iPhone 6 (almost) biggest selling handset since 2000]

Developers of apps that have not been updated in the last few years and aren’t seeing a lot of interest can expect to be told their apps may be removed from the store. They will have 90 days to appeal the removal or update their apps. Apps that are removed will continue to function for users who have already downloaded the app to their device.

In other vaguely related news, Apple recently published a report that shows that App Tracking Transparency does not benefit the company’s search ads business. Claims that it does are called “speculative”.

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