Apple says it has now topped 1.5 billion subscribers for its services business, up from 1 billion in January 2025. However, this segment of Apple’s business, which includes the Apple Store, AppleCare, music, video, and cloud services, was the only miss in what was otherwise a record-breaking quarter for the company’s hardware sales.
In Apple’s fiscal third quarter, the company reported $30.74 billion in services revenue, falling short of the $31.22 billion Wall Street analysts had expected. Combined with a miss in China, Apple’s stock tumbled over 4% in after-hours trading.
When asked to dive into what led to the decline in services revenue, Apple CFO Kevan Parekh pointed to several factors. Most notable, however, were the impacts on Apple’s cash cow, the App Store.
One factor contributing to the App Store’s performance in the quarter was a slowdown in mobile gaming. It also called out the App Store business model changes in certain countries, including the U.S.
The latter is a reference to Apple being under a court order that requires it to now allow app developers to process customer payments outside the App Store — and outside the reach of Apple’s commission. While Apple didn’t say to what extent this specific issue had impacted App Store revenue, it did remind investors that the matter will be heard by the Supreme Court for a final decision.
