Most of the money in Apple’s fastest growing revenue stream still comes from gaming, but…
From “App Store diversifying away from gaming,” a note to clients by analyst Wamsi Mohan that landed in my inbox Wednesday:
Our analysis of third-party data indicates that while games remain the largest absolute contributor to App Store revenue, the relative contribution from games is coming down (as shown in Fig 4, Games accounted for 72% of App Store revenue 2018 YTD vs. 78% in 2017 and 82% in 2016.) Moreover, incremental y/y revenue growth is now being driven by non-gaming categories… The strong growth rate of non-gaming categories gives us increased confidence in the sustainability of strong App Store sales, and reduces risk of dependence on one single category of Apps.
Maintains Buy rating, raises price target to $250 from $230.
Below: Where the growth is fastest.
My take: Welcome to the shopping mall. iPhone owners, as we know, are big spenders, and many of these fast-growing categories (Photo & Video, Shopping, Productivity, Health & Fitness) play to the iPhone’s strengths.