While Apple has been touting its ever-growing Services segment as the future of growth, one analyst has concerns. As reported by CNBC, Bernstein analyst Toni Sacconaghi has addressed concerns that the growing revolt against Apple’s 70/30 App Store revenue will hurt its long-term growth.
In a note to investors, Sacconaghi writes that investors are worried about developers revolting against this “Apple Tax,” which may hurt the growth of Apple’s Services segment:
On the other hand, Sacconaghi acknowledges that the 30 percent cut that Apple takes through the App Store is what has pushed the App Store to account for 40 percent of all services growth.
This concern from investors comes following Netflix’s decision last month to remove in-app billing functionality from its iOS app for new customers. Other developers, such as Epic Games, have also expressed concerns over the revenue sharing model.
Ultimately, however, Sacconaghi acknowledges these concerns, but believes the iPhone is still the biggest thing for Apple investors to worry about. Sacconaghi says he’s not concerned at all about “disintermediation” of the App Store, though he doesn’t address the possibility of other big name companies following in Netflix’s footsteps.
What do you think? Is it time for Apple to reconsider its 70-30 split on the App Store? Let us know down in the comments.
