Apple says changes to App Store regulations in the United States and several international markets are beginning to affect its Services business, even as the segment delivered a record June-quarter performance.
During Apple’s third-quarter fiscal 2026 earnings call, CFO Kevan Parekh said the Services division generated a record $30.7 billion in revenue, up 12% year over year. Despite the strong performance, growth slowed compared to recent quarters, marking the segment’s first sequential slowdown since 2022.
App Store changes and gaming weighed on growth
According to Parekh, Apple’s App Store business is beginning to feel the effects of regulatory and policy changes introduced over the past year.
Alongside softer revenue from mobile gaming, updates to the App Store’s business model in several regions contributed to slower Services growth during the quarter.
Apple now offers developers greater flexibility around app distribution and payment options in markets including Japan, Brazil, and the European Union. In the United States, the company is currently complying with a court ruling that allows developers to direct users to external payment methods.
Although Apple is appealing that decision, Parekh noted that the App Store still delivered its highest June-quarter revenue despite the regulatory changes.
The absence of a major theatrical release also played a role
Apple said another reason for the slower growth was the lack of a major theatrical release during the quarter.
Parekh pointed to a difficult year-over-year comparison, noting that the same quarter last year benefited from the release of F1: The Movie, which boosted revenue across Apple’s entertainment services.
With no comparable blockbuster release this year, Apple’s Services business faced a much tougher comparison, contributing to the slower growth rate.
Apple does not break out App Store revenue separately, but the marketplace remains one of the company’s largest contributors to its Services segment.
Regulatory scrutiny of the App Store continues worldwide, and the outcome of Apple’s ongoing legal appeal in the United States could have a significant impact on how the App Store operates in the years ahead.
Do you think App Store rule changes will have a bigger impact on Apple’s Services business in future quarters? Share your thoughts in the comments below.
