Apple Eyes Third-Party AI to Offset App Store Slump
AI-generated image · Bay Street Wire
CFO Kevan Parekh signals a pivot toward AI partnerships as regulatory pressure and gaming declines hit services revenue.
Apple is exploring new ways to monetize artificial intelligence as its App Store faces mounting pressure from regulators and a downturn in mobile gaming, as TechCrunch first reported. During a Monday earnings call, Apple Chief Financial Officer Kevan Parekh noted that AI presents opportunities for revenue growth through first-party capabilities, partnerships, and third-party apps.
While Parekh did not provide specific details on these third-party opportunities, Reuters reports that investors are speculating whether Apple intends to distribute third-party AI agents via the App Store and collect a percentage of the resulting revenue.
This potential shift comes as Apple navigates significant headwinds in its services business. According to TechCrunch, regulatory changes in Japan, Brazil, and the U.S. have impacted commission revenue, with third-party estimates from August suggesting an 18% drop in the U.S. market. Additionally, a lawsuit from Epic Games forced the company to permit apps to direct users toward external payment systems.
Despite these challenges, Parekh stated that the company saw double-digit growth for third-party app paid subscriptions during the September quarter. Looking ahead to the December quarter, Parekh projected services growth to be between 8% and 9%, though he noted this estimate accounts for sequential headwinds related to third-party licensing and foreign exchange.