Apple Says Last Year The App Store Generated $519 Billion In Commerce
Apple on Monday celebrated the results of a recent survey by Analysis Group, an economic research company, which claims the App Store accounted for $519 billion in combined overall billings and revenue of both physical products and services and digital items throughout 2019.
Of that number, Apple reports that only $61 billion is digital goods that the company will earn a 30% cut (or 15% in the case of longer-lasting subscriptions). This covers the biggest group, video apps, in-app purchases, some rentals, and paid app unit sales.
The study is careful to note that this number is not the same as overall billings from the App Store; Research Group claims it covers some products, such as streaming content rentals, which can be bought elsewhere but mainly include media usage on an iOS device, as well as corporate software services usually purchased by a big organization for employee use.
Another $45 billion makes up in-app advertising, which is also largely dedicated to mobile gaming. With all the others — from ride-hailing applications to grocery ordering services to Best Buy and Aim internet retail shops — make up the remaining $413 billion, the report says Apple takes no break.
These figures are generally consistent with what we know about the fast-growing services business of the company, and how much it does from the App Store on a weekly and monthly basis. But seeing a concrete breakdown of that granularity is interesting.
What are these numbers so important to Apple? Well, the company wants not only developers but regulators to think of the App Store as a sprawling economy that is “dynamic, competitive and flourishing,” in Apple’s words.
The iPhone maker is only one of the many major tech firms currently in Washington under a tighter regulatory lens, while tech-focused task forces within the Department of Justice and the Federal Trade Commission take a closer look at how Amazon, Apple, Facebook, Twitter, and Microsoft have so much control and use it in anticompetitive ways.
Over the years, Apple has been particularly criticized for its mandatory 30 percent cut, earning the ire of companies running competing services, such as Spotify, and accusations and at least one lawsuit from developers who say it runs the App Store like a monopoly.
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In the case of Apple’s long-running feud with Spotify, Apple is now being investigated by the European Union after their music streaming rival filed a formal antitrust complaint.
The added competition seems to have introduced some consumer-friendly new apps, such as Spotify’s Siri service. Much of the conversation about Apple’s relationship with developers these days focuses on whether it’s becoming a benevolent dictator who risks going beyond its boundaries or, as Apple sees it, being a mutual benefactor in a symbiotic ecosystem.
Regulation aside, the report contains some interesting statistics which break down categories of apps by revenue. The report shows that travel applications like Expedia and Smartphone devices from airlines are responsible for producing $57 billion in reservations and purchases, while ride-hailing applications and grocery distribution produce $40 billion and $31 billion.
Conclusion:
As the study calculates, far and away the biggest revenue generators are the mobile counterparts of the retail industry, which includes the mobile apps of big chains such as Walmart and Target.
