Apple CEO Tim Cook speaks at Apple’s Worldwide Developer 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 an analysis by CNBC.
This is higher than the estimated $ 50 billion in 2019 and $ 48.5 billion in 2018, according to the same analysis, suggesting that App Store sales growth accelerated sharply during the Covid-19 pandemic, as people took shelter at home and spent more time and money on apps and games.
App Store revenue grew 28% in 2020, compared to 3.1% growth in 2019, according to CNBC analysis.
The Apple App Store is a central growth area for the company. It is reported as part of Apple’s services division, which reported $ 53.7 billion in sales in Apple’s fiscal year 2020, which ended in September.
The money that Apple earns from its App Store has become a critical point for Apple critics who argue that it has too much power. Apple charges 30% for digital sales through its platform, with a few exceptions. Apple recently changed its fee structure and now only takes a 15% cut from companies that generate less than $ 1 million on the App Store.
A congressional subcommittee found in 2020 that Apple has a monopoly power over the distribution of iPhone applications, which, she said, gives Apple unusually high profits. Apple is being sued for antitrust reasons by Epic Games, which wants to avoid paying Apple 30% of the sales of its games for iPhones, which it considers unfair. Apple has denied that the App Store is a monopoly and is currently fighting Epic Games charges in court.
Apple does not disclose how much revenue its App Store generates per year. Instead, since 2013, it released data points in January that include the total that Apple has paid developers since the App Store started in 2008.
Using these numbers, it is possible to roughly calculate the revenue that the App Store generated 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, $ 45 billion more than what was announced in January 2020. If that’s equal to 70% of App sales Store, so the App Store grossed about $ 64 billion over the past year.
There are some exceptions to Apple’s 30% cut in digital sales, and Apple’s numbers are approximate, meaning that total sales from Apple’s App Store are probably even higher. Sensor Tower, an app analytics company, estimates that the App Store earned $ 72.3 billion in sales in 2020.
In 2016, Apple said apps in the second year of a subscription have to pay only 15%, and Apple executive Eddy Cue sent an email to Amazon CEO Jeff Bezos in 2016, suggesting that Apple would charge a 15% fee on subscriptions that signed through the Amazon Prime app to close a deal, according to an email released by the Chamber’s Antitrust Subcommittee last year.
But, as an assumption, 30% for Apple’s share is closer to 15%. An analysis by RevenueCat, a company that makes software to help Apple developers collect subscriptions, found that only 16% of the applications it works with achieve a “take home” rate above 75%. The apps that earn the most money on the App Store are usually games, which are not subscription-based, but monetize through in-app purchases, which are charged by Apple at 30%.
As of this year, Apple is charging smaller developers who earn less than $ 1 million a year on Apple’s platforms 15%, instead of 30%. But apps are a business that the winner takes the most, according to analysts. The top 1% of app publishers generate 93% of revenue on the App Store and Google Play Store, according to a 2019 estimate from Sensor Tower, an app analytics company.