Apple says App Store rules are slowing Services growth

Apple says regulatory changes to its App Store business model are starting to weigh on Services growth, even as the segment posted a third-quarter revenue record.

During Apple’s Q3 2026 earnings call, CFO Kevan Parekh said Services revenue reached $30.7 billion, up 12% year over year. That was down from $30.98 billion in the previous quarter, marking the segment’s first sequential decline since 2022. It was also Apple’s slowest Services growth since Q2 2025 and its weakest Q3 growth rate since 2023.

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App Store changes and gaming headwinds

Parekh attributed part of the slowdown to App Store performance, including weaker mobile gaming activity. The company does not disclose Services revenue by product, but estimates cited by The Wall Street Journal last year put the App Store at nearly one-third of the category’s revenue. Findings from the Epic v. Apple case said gaming apps alone generated approximately 70% of App Store revenue.

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“We also had some factors that impacted the performance of the App Store. We did see some headwinds in mobile gaming. And keep in mind, we also made some changes to the App Store business model in certain countries. And in the US, we do continue to operate under a court ruling impacting the link-out transactions. But we’re pleased the Supreme Court will hear our appeal.”

Apple has spent the past year complying with rules in markets including Japan, Brazil, and the European Union that allow alternative app distribution, payment methods, and offers to purchase content outside an app.

In the US, an Epic Games lawsuit has temporarily prevented Apple from charging a commission on purchases made through external links. The Supreme Court is reviewing whether Apple can be held in civil contempt for charging commissions on off-App Store purchases, while a lower court considers what commission, if any, Apple may charge.

Despite those pressures, Apple said the App Store set a June-quarter revenue record. The company did not provide a specific figure for the revenue affected by regulatory changes or mobile gaming weakness.

F1 The Movie also affected the comparison

App Store commissions were not the only factor behind the slower Services growth rate. Parekh said the year-over-year comparison benefited from the theatrical release of F1 The Movie in the prior-year quarter. Apple did not have a comparable theatrical release this year.

“We [had] the theatrical release of F1, which is one of the highest-grossing, you know, sports films in history. And this year, we didn’t have a theater release. So that had a favorable impact on both the June quarter, and also the September quarter in the year ago.”