Apple: Evercore weighs on the impact EU DMA Implementation has on App Store

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Apple: Evercore weighs on the impact EU DMA Implementation has on App Store
Credit: © Reuters.

Evercore ISI recently evaluated the effects of Apple's (NASDAQ: AAPL ) compliance with the European Union's Digital Markets Act (DMA) on App Store sales.

Despite significant regulatory changes implemented in early March, their analysis indicates minimal impact on revenue from the EU App Store, which accounts for approximately $1.2 billion in total sales, representing less than 1% of Apple's services sales.

According to analysts, "EU App Store revenue data does not currently show any meaningful change to revenue levels since Apple's compliance with the Digital Market Act."

Specifically, EU App Store revenue increased by 28% in March and 22% in April, with March revenue up 9% from pre-DMA February levels and April revenue up 6% compared to February.

The minor impact is attributed to Apple's introduction of a "Core Technology Fee" for apps downloaded outside the App Store.

Analysts suggest this fee might exceed the traditional 30% cut Apple takes on App Store sales, dissuading developers from bypassing the App Store.

However, analysts warn that if the EU successfully challenges the Core Technology Fee in court, the situation could change. Yet, even if such a challenge impacts Apple's revenue, the firm emphasizes that EU App Store revenue is relatively insignificant, constituting only about 8% of App Store revenue and less than 1% of Apple's total revenue.

Evercore maintains an Outperform rating and a $220 target on Apple.

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