Apple App Store Suffers 5% Drop in Revenue in September; Morgan Stanley Blames Economic Downturn

Apple's App Store had a 5% revenue drop last month. This is the lowest decline the app platform has experienced since the launch of the data tracking in 2015.

According to Erik Woodring, an analyst from Morgan Stanley, this turn of events is attributed to the worsening economic crisis currently hitting all parts of the world.

Apple App Store Felt the Impact of Economic Downturn

In a report by TechCrunch, the Cupertino tech firm announced that the sudden decrease in revenue hit the US, Japanese, and even the Canadian market.

Morgan Stanley, a New York-based financial and investment firm, the economic issue plays an important role in affecting the revenue generated by the App Store.

The data from the corporation shows that the revenue was down 14% back in September. Additionally, the platform sees a lethargic response from the customers brought by inflation and economic recession. In short, many people choose not to spend a dime on in-app purchases.

"We believe the recent App Store results make clear that the global consumer has somewhat de-emphasized App Store spending in the near-term as discretionary income is reallocated to areas of pent-up demand," Woodring said.

Google Play Store Next in Line

Aside from the Apple App Store, Google will share the same pain with the iPhone maker regarding revenue drop. Morgan Stanley analysts noted that Google Play Store's revenue plunged to 9% in September, per CNBC.

If the consumers continue to prioritize physical goods over digital purchases, the trend might continue for the two companies for the remainder of 2022.

App Store at Peak in Holiday Season

Although Apple posted a disappointingly low revenue record for the previous month, Morgan Stanley believes that it can recover when December comes.

The analysts wrote that the Christmas season might produce better results compared to the other "ber" months. This is because it's the holiday season, and selling will be at its peak at that time.

Last month, Tech Times reported that Apple is planning to increase pricing for App Store subscriptions and in-app purchases across Asia and Europe in October.

The company wants to maintain its profit despite the fluctuating currencies all over the world. Apparently, the fluctuations could greatly impact them because the currency exchange compensation is connected to the US dollar rate.

Apart from the continuous inflation which drives the dollar to be stronger than the other currencies, the COVID-19 pandemic remains a threat to other organizations and firms.

Some locations are still on lockdown while the other areas continue to impose restrictions to mitigate the spread of the virus.

This article is owned by Tech Times

Written by Joseph Henry