Apple's Hundred Billion Dollar Share
Written by Lucy Black   
Wednesday, 12 January 2022

Apple has divulged that developers have generated more than $260 billion in revenue since the App Store launched in 2008 with 2021 setting a new yearly record for developer earnings of about $60 billion. This is good, but it's also bad.

apple2022

The figure of $260 billion since 2008 and comes from an announcement issued by Apple to mark the New Year and its report continues:

This significant number sets a new yearly record for App Store developer earnings while representing just a small fraction of the overall commerce the App Store facilitates, serving as one meaningful marker of how the ecosystem continues to create opportunities and drive economic expansion for entrepreneurs around the world. This holiday season alone, App Store customers spent more than ever before between Christmas Eve and New Year’s Eve, driving double-digit growth from last year.

While this year's announcement doesn't reveal how much was spent in the final week of the year, the corresponding figure for 2020 was $1.8 billion.

The link to "overall commerce" from the Apple press release is to a study by economists for the Analysis Group, supported by Apple and published in July 2021 which reveals a total of $643 billion in Apple's billings and sales during 2020, which puts the yearly total of $60 billion earned by developers into perspective:

apple2020

This study compared Apple's revenue in the pre-pandemic year of 2019 with the subsequent year commenting:

We estimate that billings and sales facilitated by the App Store increased by 24%, from $519 billion in 2019 to $643 billion in 2020.

It attributes the "substantial growth" to the increased role played by apps during the coronavirus pandemic:

As many users reduced their in-person interactions, they turned to apps to make purchases and to stay connected, entertained, and healthy. Most businesses, organizations, schools, and universities had to shift at once to digital technologies, including mobile technologies, which enabled remote work and learning. As online shopping and food and grocery orders soared, many small businesses had to start or accelerate their digital transition.

What you also have to take into account about the $60 billion dollars paid out to developers during 2021 is that it's after Apple has taken its cut. Even though this is now only 15% in the case of developers who don't make more more than $1 million, see Apple Is Playing With Us - App Store Tax Cut To 15%, the amount creamed off by Apple is somewhere in the region $15-20 billion.

All of this is good for the developer and it is good for Apple, but is Apple providing $15 billion worth of support and services? I find it difficult to think of how it could spend even a fraction of this amount and given the number of problems there have been with the administration of the store and malware it doesn't seem like good value for money. The only way we could find out if the App Store was worth it would be to let market forces determine the equitable cost - but this isn't going to happen unless some agency forces Apple's to give up death grip on its ecosystem.

 

appleapp

More Information

Apple Newsroom

A Global Perspective on the Apple App Store Ecosystem (.pdf)

Related Articles

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Epic Games Takes On Apple - Unintended Consequences

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Apple Is Playing With Us - App Store Tax Cut To 15%

 

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Last Updated ( Wednesday, 12 January 2022 )