Apple paid $60 billion to iOS app developers in 2022: The state of App Store 2022

Apple App Store developers earned $60 billion in 2022, taking the total amount to $320 billion since its launch in 2008. The iOS developers receive between 70% and 85% of the subscription price, minus applicable taxes.

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It’s been almost 15 years since Apple, Inc. (NASDAQ: AAPL) launched App Store, a marketplace for iOS and iPadOS apps. It is one of the world’s fastest-growing app ecosystems, with over 650 million weekly visitors from 175 different countries. The company recently revealed some data illustrating how 2022 has gone for Apple and its App Store. It’s interesting to note that Apple paid $60 billion to iOS developers in 2022 alone.

Since the launch of App Store in 2008, the Cupertino giant has paid over $320 billion to iOS app developers. That represents an impressive 23.1% YoY increase from 2021 when the total amount earned since its inception reached more than $260 billion. Every year, the company sets a new high.

For comparison, by the end of 2020, the total amount earned by Apple App Store developers since 2008 was more than $200 billion.

The iOS developers receive between 70% and 85% of the subscription price, minus applicable taxes. If we do the math, the estimated gross revenue of the App Store in 2022 would be more than $85 billion if all developers paid a 30% cut to Apple, or about $70 billion if all developers gave a 15% cut.

The Cupertino giant also recorded 20.8% YoY increase in its paid subscriptions in 2022. The number of paid subscriptions across all of Apple services rose to over 900 million in 2022, up from over 745 million in the previous year. This includes not only Apple’s first-party services like Apple TV+ and Music, but also anyone who subscribes to a service through the Apple App store.

App Store 2022: Revenue And Downloads

Another report from Sensor Tower showed that global consumer spending on in-app purchases, premium apps, and subscriptions across the Apple App Store declined in fiscal Q4 2022, ended September 24, 2022. The revenue generated on App Store was more than 2x that of Google Play, though it still fell 2.3% YoY in fiscal Q4 2022 or CY Q3 2022.

Consumer spending on App Store declined from $21.7 billion in Q3 2021 to $21.2 billion in Q3 2022. On the other hand, the first time app installs on the App Store increased 3.8% YoY in Q3 2022, reaching 8.2 billion.

It is interesting to note that TikTok remains the most downloaded and the highest revenue-generating non-gaming app on the App Store.

Is App Store Growth Slowing Down?

Apple’s App Store is a key component of its services division. Every year, about 20% of the company’s global revenue comes from its service business. According to the company’s fiscal 2022 earnings report, the growth of its services business has slowed down in the last two years, which ultimately points to the app store’s slow growth.

In FY 2022, ended Septemeber 24, 2022, Apple’s services business grew 14.2% YoY to $78.1 billion. However, this year-over-year growth is significantly lower than the previous year when the revenue from services clocked an impressive 27.3% YoY growth.

The downloads and usage of apps increased noticeably in 2020 and 2021 during the Covid-19 pandemic. People across the world were investing more time and money in gaming and software-related apps. However, as travel, work-from-office, and other outdoor activities resumed in 2022, the spending on mobile apps and games decreased dramatically. In Q3 2022, the mobile game spending on App Store declined a notable 9.8% YoY to $11.9 billion, worldwide.

Furthermore, Apple is also facing consumer uncertainty around the world as economists worry about a possible recession, rising interest rates, inflation, etc.

According to Morgan Stanley analyst Erik Woodring, 2023 might be a fruitful year for Apple as certain app pricing has increased in overseas markets. The company has also announced new App Store pricing for developers in December 2022.

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