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 raised more than $ 64 billion in 2020, according to a CNBC analysis.
This exceeds 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 refuge at home and spent more time and money on apps and games.
According to CNBC analysis, App Store revenue grew 28% in 2020, compared to 3.1% in 2019.
Apple’s App Store is a core area of growth for the company. It was reported as part of Apple’s Services division, which reported sales of $ 53.7 billion in Apple’s 2020 fiscal year, which ended in September.
The money Apple earns from its App Store has become a hotbed for critics of Apple who claim it has too much power. Apple charges 30% for digital sales through its platform, with a few exceptions. Apple has recently changed its pricing structure, and now only represents a 15% reduction to companies that generate less than $ 1 million in the App Store.
A congressional subcommittee found in 2020 that Apple has the power of a monopoly over the distribution of iPhone apps, which it said gives Apple excessive profits. Apple is sued for antitrust by Epic Games, which wants to avoid paying Apple 30% of sales of its iPhone games, which it describes as unfair. Apple has denied that the App Store is a monopoly and is currently battling Epic Games allegations in court.
Apple does not disclose how much revenue its App Store gets per year. Instead, since 2013 it has released data points in January that include the total that Apple has paid developers since the start of the App Store in 2008.
Using these figures, it is possible to reverse approximately how much revenue the App Store generated based on what Apple paid developers in a given year. According to a press release on Wednesday, Apple has paid developers $ 200 billion since 2008, an increase of $ 45 billion from the figure announced in January 2020. If that equates to 70% of sales of the App Store, the App Store raised about $ 64 billion course.
There are some exceptions to Apple’s 30% reduction in digital sales, and Apple’s figures are approximate, meaning that Apple’s total App Store sales are likely to be even higher. Sensor Tower, an app analytics company, estimates the App Store had $ 72.3 billion in sales in 2020.
In 2016, Apple said second-year subscription apps only had to pay 15%, and in 2016, Apple executive Eddy Cue sent an email to Amazon CEO Jeff Bezos , suggesting that Apple would charge a 15% fee on subscriptions that were registered through Amazon Prime app to reach an agreement, according to an email released by the House Antitrust Subcommittee last year.
But, as an assumption, 30% of Apple’s take is closer to 15%. The review by RevenueCat, a company that makes software to help Apple developers bill subscriptions, found that only 16% of the apps it works with manage a “take home” rate above 75%. The apps that make the most money in the App Store are usually games, which are not based on subscriptions, but earn revenue through in-app purchases, which Apple charges 30%.
Starting this year, Apple charges smaller developers who earn less than $ 1 million a year on Apple platforms by 15%, instead of 30%. But according to analysts, apps are a business that grabs more winners. According to a 2019 estimate from Sensor Tower, an app analytics company, the top 1% of app publishers generate 93% of revenue from Google’s App Store and Play Store.