TLDR
- Apple CEO Tim Cook traveled to Chengdu, China, to mark Apple’s 50th anniversary
- Apple cut its App Store commission in mainland China from 30% to 25%, effective March 15
- China’s ruling party newspaper called on Apple to go further and reduce App Store restrictions
- iPhone 17 demand in China has been strong, helping Apple recover market share
- Wall Street holds a Moderate Buy consensus on AAPL, with an average price target of $304.66
Tim Cook was in Chengdu on Wednesday, showing up at an Apple store for an event marking the company’s 50th anniversary. The visit followed Apple’s decision earlier this month to cut its App Store commission in mainland China from 30% to 25%.
The fee reduction took effect on March 15. It applies to apps on both iOS and iPadOS, and Apple said the change came after discussions with Chinese regulators.
Cook’s visit wasn’t just symbolic. China is Apple’s third-largest revenue market, and the company has been working to rebuild its position there after losing ground in recent years.
The iPhone 17 series has helped. Demand for the new lineup has been strong in China, one of the world’s biggest smartphone markets, giving Apple some momentum heading into the visit.
But the regulatory heat isn’t cooling off. After Apple announced the commission cut, the Chinese Communist Party’s flagship newspaper published an editorial calling on Apple to go even further — pushing for reduced restrictions and an end to what it described as monopolistic practices.
App Store Under Pressure
Apple launched its App Store in China in 2010. The China version operates differently from the U.S. version — Apple has removed apps at Beijing’s request, including WhatsApp in 2024.
Chinese regulators have been examining Apple’s policies around in-app spending cuts and its restrictions on third-party payment services and external links.
That’s a familiar playbook. In Europe, Apple agreed in 2024 to open its mobile wallet technology to competitors free of charge for ten years, settling an antitrust investigation.
In China, the pressure is still building. The government there wants Apple to open its platform further, and the 25% commission may not be the final number.
WeChat Deal and Revenue Mix
Services revenue is Apple’s second-largest income stream after iPhone sales. That makes deals like the one Apple signed with Tencent Holdings in November particularly important.
Under that agreement, Apple takes a 15% cut of spending on mini apps and games inside WeChat — a long-awaited deal that gives Apple a foothold in one of China’s most-used platforms.
AAPL stock moved only fractionally on Wednesday, gaining marginally in pre-market trading. The stock had also risen only slightly the day before.
Spring product refreshes from Apple have not moved the needle much for investors. The market’s attention remains on China’s regulatory environment and whether further App Store changes are coming.
On Wall Street, analysts rate AAPL a Moderate Buy, based on 14 Buy ratings, nine Holds, and one Sell over the past three months.
The average price target sits at $304.66, implying around 20% upside from current levels.
Apple’s App Store commission in mainland China is now 25%, down from 30%, following regulatory discussions — with China’s state media already calling for further reductions.
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