Apple is exploring ways to increase services revenue through third-party applications and artificial intelligence, according to the company's recent earnings call. Chief financial officer Kevan Parekh indicated that AI could contribute to revenue growth by providing incentives for customers to upgrade devices and by creating opportunities through partnerships.
"On the product side, you know, we feel AI offers a compelling reason for customers to upgrade and switch in order to get the latest capabilities, and we also feel there’s opportunities across third-party apps and partnerships as well as first-party opportunities," Parekh said.
While the company's services business remains at record levels, it faces headwinds from a slump in mobile gaming and regulatory pressures. Third-party estimates from August suggested an 18% drop in U.S. commission revenue, with similar declines reported in Brazil and Japan following new regulations. A lawsuit by Epic Games also forced Apple to allow apps to redirect users to external payment systems, impacting the traditional App Store commission model.
Despite these challenges, Apple reported a record number of paid subscriptions with double-digit growth for third-party apps on the App Store during the September quarter. The company expects services growth to be between 8% and 9% in the December quarter, a forecast that accounts for sequential headwinds including third-party licensing and foreign exchange fluctuations.
Investors have speculated that Apple might profit by distributing third-party AI agents through the App Store and taking a percentage of the revenue they generate, though the company has not elaborated on specific plans for third-party AI opportunities.
