After the consecutive flat quarters in terms of revenues, Tim Cook, CEO of Apple Inc. (NASDAQ:AAPL) appeared quite pleased with the performance of iOS apps and their developers. He tweeted that Apple has paid more than $50 billion till date to developers who have developed iOS apps. If we do simple math, Apple pocketed, on an average, nearly $21 billion from its App Store till date.
Tim Cook also proclaimed that July 2016 marked the record-breaking month for App-store as the company recorded the highest ever revenue from the App Store in the said month.
Apple pays 70% of the sales revenue of an App to its developer. However, for subscription based apps, the Cupertino giant pays 70% of the monthly revenue to its developers for the first year. After a year, the revenue share is increased to 85%.
While Apple may be leading the chart of app revenue, Google Play Store leads the way with 2.2 million unique apps available for download on its platform. Apple’s App Store isn’t far behind as the store offers 2 million apps for download to Apple devices’ users.
Besides the earnings, iOS developers are happier than their Android counterparts due to widely known fragmentation challenge. iOS developers don’t need to worry about fragmentation issues unlike the Android developers as 89.6% of Apple’s devices are running on iOS 9 currently.
Though Apple witnessed flat and dismal quarters recently, the Services business of the company grew by a whopping 19% YoY in fiscal Q3 2016. The services segment of the Cupertino giant accounted for a significant 11% of Apple’s overall revenue in the quarter. The individual iOS app developers are the prime curators of company’s App Store that falls under the service segment concerning revenues. Therefore, the increase in revenue in services sector means an increase in bank balance of Apple’s app developers.
However, there has been a debate from long that the big developers are the ones who enjoy surplus revenue from the App Store. The small-time developers find it hard to make their work noticed in the market.
The Apple’s App Store has provided a whopping 1.9 million jobs in the US alone comprising of app developers, engineers, and entrepreneurs. The Cupertino giant is also vying to strengthening its presence in developing market by increasing its number of app developers. During his India visit, Cook announced the development of a state of the art Design and Development Accelerator in the garden city Bangalore. The program would hone up the skills of potential iOS developers in India and, in turn, they can also develop more contemporary apps for Apple’s App Store in the future.
While developers may be fascinated about Apple’s App Store, it’s interesting to know that the record-breaking Pokémon Go didn’t add much to the revenues of App Store in July. In spite of the fact that the successful game by Niantic has already surpassed 100 million downloads and is earning a considerable $10 million every day, Pokemon didn’t hit the earnings of other Games on the App Store. Prisma tops the App Store rankings in free App category followed by WhatsApp, SHAREit, Facebook Messenger and Facebook app. Hitman: Sniper tops the list in paid app category of App Store.
How has Apple made huge revenues?
Apple’s developers earn 80% more than an Android developer although Android dominates the smartphone market globally. Apple’s customers are better off financially and spend a considerable amount on apps. A report by AppAnnie illustrates the fact that despite a greater number of app downloads on Android devices Apple’s App Store accounts 2X revenue than Google Play Store.
Apple’s App Store revenue and Apple app developer’s earnings are slated to increase in coming years also. The forecast of overall mobile app revenue is far more appealing as in 2016 the worldwide mobile app revenue is estimated to be around $52 billion which is expected to reach $102 billion by 2020.