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Opinion
Martin Peers

Are Apple App Store Profits Slowing? Investors Need to Know

Shareholders deserve more insight into the company’s services business, which accounts for nearly a third of its gross profit.

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Photographer: Chris Delmas/AFP/Getty Images

Analyzing Apple’s earnings can, on occasion, feel like looking at a jigsaw puzzle with some of the pieces missing.

Consider the quarter ended in June: The fact that a slight dip in sales from Apple’s all-important hardware segment was offset by growth in its services segment — the App Store, advertising, etc. — received a lot of attention when the company reported last Thursday night. What drew less notice was that the services’ 12% growth rate was meaningfully slower than the 25% that the segment averaged over the previous four quarters.