Apple AAPL has benefited from a strong boost in App Store sales, driven by standards of social distance led by the coronavirus. This is reflected in the 77% increase in shares last year, which exceeded the 17.7% increase in the S&P 500.
The strong growth of the App Store can be attributed to the good times in China. The iPhone maker generates more revenue in China than in any other country, most of which comes from games.
Consequently, Apple is striving to meet the requirements of China’s content regulators. Apple withdrew a record total of 46,000 apps, including 39,000 games from its App Store in China on December 31, 2020, as part of the crackdown on unlicensed games on the platform, according to a Reuters report.
The deadline for game publishers to submit a government-issued license number was originally set by Apple for June 30. However, the company subsequently extended the deadline to December 31.
IOS games have long needed to obtain a Chinese gaming license to operate in the country. Government-issued licenses would allow users to make in-app purchases through the App Store in China, which is considered the largest mobile gaming market.
According to a Qimai report, some of the applications that were affected by the scan include Take-Two InteractiveTTWO of NBA2K20 and Assassin’s Creed Identity in Ubisoft UBSFY. Allegedly, only 74 of the 1,500 most paid games remained after the removals.
In addition, the company froze updates for almost 30,000 apps in August 2020, which did not comply with its licensing policies. These applications were later removed.
One-year performance
Apple’s rigorous efforts to help developers globally
The App Store accounted for 68.4% of total sales, which totaled $ 276.6 million, an increase of 35.2% year-on-year on Christmas Day 2020, compared to Alphabet GOOGL Google’s Play Store: sales of $ 129 million, an increase of 33% year over year and comprising 32% of the total, according to a report by Sensor Tower.
Not including Chinese third-party app stores, iOS and Android users in 2020 downloaded 130 billion apps and spent a record $ 112 billion, according to App Annie’s year-end forecast.
The Apple App Store has faced a backlash from third-party developers over the past year for forcing them to pay a 30% commission and use only the purchase system within the company’s own application.
This Zacks Rank # 3 (Hold) company has been working hard to close the gaps that developers find to bypass some of the in-game purchases that need to be made through the App Store. You can see the complete list of today’s Zacks # 1 Rank (strong buy) shares here.
Apple has reduced its App Store commission rate from 30% to 15% on paid apps and in-app purchases for small developers who earn less than $ 1 million in annual sales of their apps and those who are new to the store from January 1, 2021.
As part of the new Apple App Store Small Business Program, the new commission structure aims to support small and individual developers as companies adapt to a virtual world during the coronavirus pandemic.
The App Store continues to attract the attention of prominent developers around the world, helping the company to offer attractive new applications that drive App Store traffic. The new program is expected to attract more niche app makers, game developers and other members of the iOS ecosystem.
As stated in a lawsuit, cited by a report from The Verge, Apple’s App Store currently has 27 million developers globally, serving users of more than 1.5 billion Apple devices worldwide in 175 countries and more 40 languages, with over 180 local payment methods and 45 currencies accepted. The store hosts more than 1.8 million apps.
Last week, Apple removed an iOS app called Vybe Together from the App Store that encouraged users to organize secret underground parties, despite measures of social distance and pandemic restrictions.
These stocks are prepared to fly beyond the pandemic
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