Monthly data from Damo: As of mid-August, Apple (AAPL.US) App Store net revenue fell 0.6% year on year for the first time in four years

The Zhitong Finance App learned that Morgan Stanley pointed out in a report that according to monthly tracking data, as of mid-August, the net revenue of the Apple (AAPL.US) App Store had declined 0.6% year-on-year for the same month. This is the first time in four years that there has been a negative year-on-year increase.

A team of analysts led by Erik Woodring added: “The iPhone production plan for the third calendar quarter remained unchanged, but iPad production declined somewhat, suggesting a certain degree of demand elasticity; PC production in July fell sharply by 24% year on year. Furthermore, the cloud capital expenditure tracking index shows that the expenditure growth rate for the 2027 calendar year is currently +38% (previously +9 percentage points).”

Based on the latest data from Sensor Tower, analysts estimate that as of August 17, App Store net revenue fell 0.6% year-on-year for the same month, a decrease of 170 basis points from the growth rate in June, while the base figure itself dropped by 200 basis points for the same period last year. If the quarter ends on August 17, App Store revenue growth for the third calendar quarter was only 0.5%, 50 basis points lower than the 1% year-on-year increase predicted by Morgan Stanley for the September quarter. Analysts further pointed out that there is a downside risk of about 20 basis points (about 45 million US dollars), which roughly corresponds to Morgan Stanley's forecast of a 9.5% increase in service revenue for the September quarter (the market's consensus forecast is a 10.7% year-on-year increase).

Looking ahead, analysts believe that it will be difficult for service business growth to pick up significantly in the short term, as the App Store faces multiple pressures such as declining share ratios, redirecting external links, weak demand for games, and foreign exchange headwinds. However, AppleCare's pricing adjustments are still expected to be a positive counterbalance to a certain extent.

Furthermore, Woodring and his team said that the iPhone production plan for the third calendar quarter remained unchanged at 54 million units, supporting the expected shipment of about 58 million units in the September quarter; iPad production was lowered by 1 million units, reflecting expectations of limited demand elasticity after price increases.

Additionally, analysts said that based on the latest forecast from its technology hardware team in Greater China, notebook original design manufacturer (ODM) shipments fell 24% year on year in July, the worst year-on-year performance in 40 months, and 4% lower than Morgan Stanley's estimate, mainly due to weak demand and supply constraints. Analysts pointed out that this indicates an accelerated contraction in PC market demand.

The Woodring team also said, “Our cloud capital expenditure tracking metrics show that the expenditure growth rate for the 2027 calendar year was +38%, while the market's consensus forecast was $1.39 trillion, and Morgan Stanley's forecast was $1.61 trillion, indicating that there is still room for further increases in consistent market expectations.”

Analysts pointed out that after incorporating the latest consistent forecast update, the companies with the largest increases in capital expenditure forecasts for the 2027 calendar year are: Alphabet (GOOGL.US, +17.8 billion US dollars), Meta (META.US, +8.8 billion US dollars), Microsoft (MSFT.US, +7.5 billion US dollars), Amazon (AMZN.US, +6 billion US dollars), and Nebius (NBIS.US, +5 billion US dollars). Analysts also said that they also included SpaceX (SPCX.US) in the scope of cloud capital expenditure tracking, and its capital expenditure increase in 2027 contributed US$12.9 billion (an increase of US$62 billion over the previous year).

The Woodring team concluded that overall, the current market's consensus forecast for cash cloud capital expenditure in 2027 is US$1.39 trillion, which means that the capital intensity (that is, capital expenditure as a share of revenue) of the top 15 cloud vendors is an average of 38.6%, an increase of 380 basis points from the beginning of this month.