Apple signals potential revenue boost via third-party AI applications

Despite its services division maintaining record levels, Apple faces headwinds from regulatory scrutiny impacting the App Store and a downturn in mobile gaming. During a recent earnings call, Apple's Chief Financial Officer, Kevan Parekh, indicated the company might seek to increase services revenue by leveraging third-party applications, citing AI as a compelling driver for customer upgrades. Reuters reported that investors are speculating whether Apple could earn revenue by facilitating the distribution of third-party AI agents through the App Store and taking a commission. Parekh noted that AI presents opportunities across both first-party and third-party apps. While acknowledging past issues, such as an 18% drop in U.S. commission revenue reported in August due to new regulations in markets like Brazil and Japan, he also mentioned a record number of paid subscriptions and double-digit growth for third-party apps in the September quarter. Looking ahead, Parekh projected services growth between 8% and 9% for the December quarter, factoring in sequential headwinds from third-party licensing and foreign exchange fluctuations. The company remains under scrutiny regarding its traditional control over App Store payments, a practice challenged by legal actions like the one involving Epic Games.