Apple(US:AAPL) 3 6 Ke·2025-12-29 00:55Core Viewpoint - Apple plans to expand advertising space in the App Store starting in 2026, which will likely increase its advertising revenue significantly [1][3]. Group 1: Advertising Expansion - Currently, Apple only has one advertising space in the App Store, known as Apple Search Ads (ASA). The future advertising will include more placements, such as ads in the middle and lower parts of the search results page [3]. - The new advertising model will utilize a bidding mechanism where the actual display position of ads will depend on the bid amount and auction ranking, differing from the current ASA model where advertisers can purchase specific keyword placements [3][4]. - Apple claims that nearly 65% of downloads occur after a search, indicating a strong potential for increased revenue from the expanded advertising [3]. Group 2: App Store's Role and User Engagement - Despite the rise of social media platforms, the App Store remains the primary channel for iOS users to discover apps, largely due to Apple's closed ecosystem [4]. - Apple's investment in a high-quality editorial team has transformed the App Store into a media-rich platform, enhancing user engagement and discovery [4]. Group 3: Regulatory Challenges and Revenue Impact - Apple is facing pressure from new regulations in Japan, which require the opening of third-party app stores and reduced commission rates, leading to a potential decline in revenue from the "Apple tax" [6][9]. - Goldman Sachs predicts a slowdown in App Store revenue growth in major markets, with a significant drop from 12% to 6% in growth rate over four months, indicating sensitivity to regulatory changes [8]. - The gaming category, which has historically been the most profitable, has also shown a decline in revenue contribution, suggesting developers are eager to explore alternatives outside the App Store [8][9].