Apple Explores Third-Party AI Apps To Boost Revenue
Apple may increase revenue by leveraging third-party AI apps, according to its chief financial officer. This move could help offset regulatory pressure and a slump in mobile gaming.
Original reporting · techcrunch.com
Original: “Apple may try to increase revenue by doing…something with third-party AI apps”
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How this was written. Hustle Bucks wrote this article with a language model from TechCrunch’s reporting (model: @cf/meta/llama-3.3-70b-instruct-fp8-fast); it describes that reporting rather than adding to it. The original, linked above, is the full story.
Key points from TechCrunch’s report
- Apple's services business is facing growing pressure due to regulatory challenges and a decline in mobile gaming.
- The company may look to boost services revenue through third-party AI apps, although the details of this plan are not yet clear.
- Regulatory changes have already impacted Apple's App Store commission revenue in some markets, with declines reported in the US, Brazil, and Japan.
- Apple expects services growth to be between 8-9% in the December quarter, despite estimated sequential headwinds.
Apple's services business, which includes the App Store, is facing growing pressure due to regulatory challenges and a decline in mobile gaming. Despite this, the business remains at record levels, according to Apple's recent earnings call.
The company's chief financial officer, Kevan Parekh, hinted that Apple may look to boost services revenue through third-party apps, particularly those utilizing artificial intelligence. However, the details of this plan are not yet clear.
Parekh mentioned that AI could contribute to revenue growth over time, citing opportunities in both first-party and third-party apps. This could potentially involve distributing third-party AI agents through the App Store and taking a cut of the revenue they generate.
Regulatory changes have already impacted Apple's App Store commission revenue in some markets. For example, the company saw an 18% drop in US commission revenue in August, with declines also reported in Brazil and Japan. These changes have forced Apple to allow apps to redirect users to outside payment systems, further reducing its control over payments within the app marketplace.
During the earnings call, Parekh acknowledged the challenges facing the App Store, including headwinds in mobile gaming. Despite these challenges, the company reported a record number of paid subscriptions with double-digit growth for third-party apps on the App Store.
Looking ahead, Parekh expects services growth to be between 8-9% in the December quarter. This outlook takes into account estimated sequential headwinds, primarily from third-party licensing and foreign exchange.
TechCrunch has reached out to Apple for more information on its plans for third-party AI apps, but the company has not yet responded. As the situation develops, it is likely that Apple will provide further details on its strategy for leveraging AI to boost revenue.
Questions and answers
What is Apple's plan for boosting services revenue?
Apple may look to boost services revenue through third-party AI apps, although the details of this plan are not yet clear.
How have regulatory changes impacted Apple's App Store commission revenue?
Regulatory changes have already impacted Apple's App Store commission revenue in some markets, with declines reported in the US, Brazil, and Japan.
What is Apple's outlook for services growth in the December quarter?
Apple expects services growth to be between 8-9% in the December quarter, despite estimated sequential headwinds.
