Apple services miss estimates as gaming slows and App Store changes

Apple’s services revenue missed Wall Street estimates in its fiscal third quarter, and combined with a sales shortfall in China, its shares tumbled more than 4% in after-hours trading on July 30, 2026.

The company reported services revenue of $30.74 billion, below the $31.22 billion consensus forecast. The segment was the only miss in an otherwise record quarter for hardware sales.

CFO Kevan Parekh attributed the shortfall to a mobile gaming slowdown, changes to App Store business models in some countries including the U.S., and foreign exchange, which he called the main factor. A tough comparison against prior quarters boosted by the success of the F1 theatrical release also weighed on results.

The App Store changes stem from a court order requiring Apple to allow third-party payment processing. Apple said the matter will be heard by the Supreme Court.

Despite those headwinds, the App Store still set a June quarter revenue record, aided by Apple Ads, which expanded to Apple Maps. The company added that AppleCare, Apple Music, and Apple TV achieved June quarter records, while cloud and payment services hit all-time highs and Apple TV viewership reached an all-time high.

Apple’s services business passed 1.5 billion paid subscriptions in the quarter, up from 1 billion in January 2025. Both transacting and paid accounts hit all-time highs, with double-digit growth in emerging markets, Parekh noted.

Apple also cited potential new revenue streams, including Creator Studio subscriptions, upcoming bill-splitting features in Apple Cash, and the launch of an Apple Upgrade program with Klarna, which could boost device sales and attached services.