Apple services growth slows amid regulatory changes and gaming market shifts

Apple’s services division, which includes the App Store, iCloud, and advertising, reported revenue of approximately $30.7 billion, representing a 12 percent year-over-year increase. While the division continues to grow, the rate of growth fell short of investor expectations.

Chief Financial Officer Kevan Parekh attributed the slower performance to a weaker mobile gaming market and changes to the App Store business model in certain regions. In Europe, regulatory requirements mandate that Apple allow alternative app stores and payment methods. These changes are reducing or replacing traditional commission rates of 15 to 30 percent with different fee structures.

Despite the slowdown in services growth, Apple achieved record quarterly revenue of $109.4 billion for June. The company maintains approximately 1.5 billion paid subscriptions.