Apple Services growth falters as App Store model shifts

CFO Kevan Parekh attributed the performance gap to a cooling mobile gaming market and structural changes to the App Store. Following a court order, Apple must now allow developers to process payments outside its proprietary system, bypassing the traditional commission structure. While Apple maintains this shift is only one piece of the puzzle, the legal battle remains headed for the Supreme Court.

Beyond regulatory hurdles, foreign exchange fluctuations and a difficult year-over-year comparison against the box-office success of its F1 film dampened results. Despite these headwinds, the company set revenue records in several categories, including Apple Ads, AppleCare, and Apple Music. Management remains focused on long-term expansion through initiatives like the Apple Upgrade program in partnership with Klarna, as well as new features for Apple Cash and Creator Studio subscriptions designed to deepen user integration within the ecosystem.