The App Store Earns Half A Trillion Dollars – But Not For Apple

A new study has just revealed that the millions of dollars earned by Apple from the App Store, and the many millions more paid by Apple to developers are just a fraction of the real economy the Store generates. A good time to be a developer, perhaps?

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Twelve years ago next month, Apple launched the App Store, with 500 apps. These days, there are almost two million apps and every week half a billion people visit it.

Now, just a few days before the biggest-ever WWDC launches on Monday, June 22, Apple has announced a new study, conducted by Analysis Group.

This has happened because Apple has always wanted a better indication of how much income is really generated worldwide when you add in the aspects of the ecosystem which are beyond Apple’s reach.

Over the lifetime of the App Store, Apple has paid $155 billion to the developers, while means up to another $66 billion was retained as the 30% commission it charges. Which is a decent amount.

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But there’s a lot more to the story. Apple’s commission is only earned on digital goods and services, such as the sales of apps, in-app advertising sales, in-app purchases and more. In 2019, these billings and sales added up to $61 billion.

A massive figure, right?

Well, not when you add in the income from physical goods and services. The biggest section of this category is m-commerce, that is transactions primarily conducted on mobile devices. So, that would include retail, that is the sales from retail apps like Target and Best Buy. This section added up to $268 billion in 2019 alone.

Then there’s travel apps such as United, Expedia and British Airways, for instance. These added up to $57 billion in 2019. Add another $40 billion just for ride-hailing apps like Lyft and Uber, and another $31 billion for grocery delivery apps like Grubhub and you can see there’s a lot going on.

The Analysis Group also broke down the App Store effect by region. The standout figure was the income earned in physical goods and services (retail, travel, ride hailing and so on) in China. The total for this was $225 billion last year. The second biggest total in this sector was for the physical goods and services accounted for in the U.S. – $93 billion.

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If your brain is reeling a little, I’m not surprised. The total worldwide estimated billings and sales is the most remarkable figure of all – and Apple says it believes the figure is a conservative one.

The total is $519 billion for 2019. So, more than half a trillion dollars, then.

So, what does all this mean?

We’re all using our phones as a way of buying stuff, hailing rides, booking tickets, ordering grocery deliveries and more. Apple only gets a tiny fraction of that grand total, of course, but it means that Apple can, with some justification, claim that in the last 12 years, the App Store has played its part in helping a massive international economy to thrive.

What’s next? In a few days, Apple will reveal new software capabilities and innovations at WWDC. The apps that will be created from those new capabilities, apps that will work on iPad, Apple TV, Apple Watch, Mac and – above all – iPhone, will make possible the next generation of all-new apps, potentially with completely new experiences.

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