Apple CEO Tim Cook speaks at Apple’s World Developers Conference (WWDC) at the San Jose Convention Center in San Jose, California, on Monday, June 4, 2018.
Josh Edelson | AFP | Getty Images
Apple’s App Store grossed more than $ 64 billion in 2020, according to a CNBC analysis.
This exceeded $ 50 trillion in 2019 and $ 48.5 billion in 2018, according to the same analysis, suggesting that sales in the App Store accelerated sharply during the Covid-19 pandemic as people took shelter at home and spent more time and money applications and games.
App Store revenues increased by 28% in 2020, up from 3.1% in 2019, according to CNBC analysis.
The Apple App Store is a core growth area for the company. It is reported as part of Apple’s services division, which reported sales of $ 53.7 billion in Apple’s fiscal year 2020, which ended in September.
Apple’s money from the App Store has become a hotbed for Apple critics, who say it has too much power. Apple charges 30% for digital sales through its platform, with a few exceptions. Apple recently changed its pricing structure and now only needs a 15% discount from companies that generate less than $ 1 million in the App Store.
A congressional subcommittee found in 2020 that Apple had a monopoly on the distribution of iPhone applications, which it said offered excessive profits to Apple. Apple is being sued on antitrust grounds by Epic Games, which wants to avoid paying Apple 30% of sales of its iPhone games, which it calls unfair. Apple has denied that the App Store is a monopoly and is currently battling Epic Games allegations in court.
Apple does not disclose the App Store’s earnings per year. Instead, since 2013, it has released data points in January, which include the total amount Apple paid developers since the start of the App Store in 2008.
Using these numbers, it’s possible to withdraw approximately how much the App Store came in based on how much Apple paid developers in a given year. According to a press release on Wednesday, Apple has paid developers $ 200 billion since 2008, up $ 45 billion from the figure announced in January 2020. If it is equal to 70% of sales in the App Store, then the App Store has grossed $ 64 billion a year in recent years.
There are a few exceptions to Apple’s 30% reduction in digital sales, and Apple’s figures are approximate, which means that Apple App Store total sales are probably even higher. Sensor Tower, an application analytics firm, estimates that the App Store has sales in 2020 of $ 72.3 billion.
In 2016, Apple said second-year subscription apps only have to pay 15%, and Apple executive Eddy Cue emailed Amazon CEO Jeff Bezos in 2016, suggesting that Apple will charge a fee. 15% for Amazon Prime subscriptions to close a deal, according to an email from the House Antitrust Subcommittee last year.
But, as an assumption, 30% for Apple’s take is closer to 15%. The analysis by RevenueCat, a company that makes software to help Apple developers bill subscriptions, found that only 16% of the applications it works with manage a “home” rate of over 75%. The apps that make the most money in the App Store are usually games, which are not subscription-based, but generate money through in-app purchases, which are billed by Apple at 30%.
Starting this year, Apple is charging smaller developers who earn less than $ 1 million a year on Apple platforms by 15%, instead of 30%. But apps are the most lucrative business, analysts say. The top 1% of app publishers generate 93% of revenue from the App Store and Google Play Store, according to a 2019 estimate by Sensor Tower, an app analytics firm.