In context: With more people spending their time glued to their mobile devices, it’s no surprise the App Store growth accelerated in 2020. Apple is set to report earnings for the last three months of 2020, so it will be interesting to see if that’s also the case for iPhone, iPad, Mac, and accessories like the Apple Watch and AirPods.
Apple revealed this week that the App Store saw record spending of $1.8 billion during Christmas week, as well as a new all-time high for New Year’s Day of $540 million. This was fueled by streaming, messaging, and videoconferencing app, all of which saw a surge in usage amid the pandemic.
According to a CNBC report, the App Store grossed over $64 billion in 2020, which is a 28 percent year-over-year increase when compared to 2019. This is a bigger jump than the one seen from 2018 to 2019, when the App Store generated $48.5 billion and $50 billion, respectively — which is a more modest 3.1 percent growth.
Apple does not report these specific numbers and instead they’re lumped together with other revenue streams into “Services.” The company says it made $53.7 billion in revenue from that line of business for the fiscal 2020 year, which ended in September. That’s not enough to get a good picture of the App Store, so CNBC used a different figure that Apple has been reporting since 2013 — the amount of money the company has paid to developers.
Based on those numbers, it’s relatively easy to get a rough estimate of how much revenue was generated by the App Store. Since Apple reported it’s paid developers a total of $200 billion since 2008 and this is up $45 billion compared to the figure reported a year ago, this figure represents 70 percent of the total App Store sales. If you account for Apple’s 30 percent cut, you arrive at that $64.3 billion in gross revenue.
Earlier this month, Apple started the App Store Small Business Program, in which developers that earn less than $1 million per year pay a reduced commission rate of 15 percent. This is unlikely to reflect on Apple’s bottom line, but it might help iOS developers grow their businesses faster, which in turn could lead to an increase in overall App Store revenue.