Apple iOS app developers hit jackpot: Generated $1.1 trillion in billings and sales in 2022

Interestingly, 90% of the revenue directly benefited iOS developers and other third-party entities as Apple did not take any commission on these transactions. An overwhelming $910 billion, or 81%, originated from sales of physical goods and services made on iOS apps.

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The Apple App Store has served as the largest and most diverse platform for iOS applications worldwide for the last 15 years. Today, iPhone and iPad users enjoy access to a staggering 123x more apps compared to the end of 2008, taking their app experience to stratospheric heights. A recent report by Analysis Group, commissioned by none other than Apple, Inc. (NASDAQ: AAPL) itself, reveals that the App Store ecosystem facilitated an unprecedented $1.1 trillion in global billings and sales in 2022, up 29% YoY. That number would make even the richest billionaires gasp for air!

The App Store ecosystem has seen explosive growth in the last three years, with revenues soaring from $519 billion in 2019, to $643 billion in 2020 and $868 billion in 2021.

Before we jump into some other mind-boggling statistics on the surge in downloads and revenues from iOS apps by category in 2022, it is important to understand Apple’s share of the monumental $1 trillion in billings and sales generated within the App Store ecosystem.

Apple’s commission structure for App Store sales and billings

Apple’s commission model focuses solely on certain types of transactions within the App Store. When users make app purchases, in-app purchases, or subscribe to services through in-app subscriptions, Apple collects a commission. However, there are several other avenues where the Cupertino giant does not take a cut.

Transactions involving purchases of digital goods and services that occur outside of apps, such as subscribing to a newspaper through a web browser, do not fall under Apple’s commission structure. Similarly, when users make purchases of physical goods and services through apps, like paying for a ride on a ride-hailing app or buying groceries online, Apple does not receive any commission. Additionally, in-app ad revenue is not subject to commission collection by Apple.

It is indeed surprising and notable that more than 90% of the colossal $1.1 trillion in billings and sales facilitated by the App Store ecosystem was generated outside of the App Store. This means that the majority of the revenue directly benefited developers and other third-party entities as Apple did not take any commission on these transactions.

The extraordinary figure underscores the significant revenue streams generated by activities that bypass the App Store. As time progresses, the share of billings and sales that accrue solely to iOS developers and other third parties continues to rise year after year.

It emphasizes the tremendous opportunities available to developers and other entities, with a significant portion of the thriving ecosystem’s revenue flowing directly to them.

Main highlights: App Store Ecosystem Revenue

Out of the astounding $1.1 trillion in billings and sales generated by iOS app developers within the App Store ecosystem, let’s break down the figures to understand the distribution.

  1. Of the total $1,123 billion, about $104 billion, or 9%, originated from billings and sales of digital goods and services consumed on iOS apps. This includes purchases such as subscriptions to digital publications or access to exclusive content within apps.
  2. An overwhelming $910 billion, or 81%, originated from sales of physical goods and services made on iOS apps. This encompasses purchases like ordering a ride through a ride-hailing app, buying groceries and merchandise online via iOS apps.
  3. Additionally, in-app advertising on iOS devices contributes significantly to the revenue stream. Approximately $109 billion, constituting 10% of the total, is derived from advertising within iOS apps.

Let’s delve into each category in detail:

Digital goods and services

The digital goods and services consumed on iOS apps within Apple App Store experienced a remarkable +41% YoY growth between 2019 and 2020. This was mainly due to the significant shift towards a more digital-centric world driven by the Covid-19 pandemic. The demand for digital goods and services soared as people adapted to remote work, online learning, and virtual interactions. The year witnessed a substantial increase in demand for enterprise, education, fitness, dating, live-streaming, horoscope, and group chat apps, among others.

However, the growth trajectory of the digital goods and services facilitated by the App Store began to show signs of deceleration in recent years. Between 2020 and 2021, there was a 19% YoY growth in digital sales and billing, which further declined to just 2% YoY between 2021 and 2022.

This plateauing effect signifies a transition towards a new normal, where sustained higher levels of digital billings and sales became the prevailing trend. The market has adjusted to the changes brought about by the pandemic, and digital solutions have become an integral part of everyday life.

Physical goods and services

The physical goods and services consumed on iOS apps grew a substantial 26% YoY from 2019 to 2020, 30% YoY from 2020 to 2021, followed by an even more impressive 34% YoY from 2021 to 2022.

These robust growth rates underscore the increasing adoption and popularity of using iOS apps as a platform for purchasing physical goods and services. The continued trend of buying goods and services through apps, particularly in general retail (up +32%), grocery (up +20%), ride-hailing (up +45%), and travel sectors (up 84%), played a significant role in this growth in 2022.

General retail iOS apps remained the largest m-commerce component of the ecosystem in 2020 (+42% YoY), 2021 (+24% YoY) and 2022 (+32% YoY). The surge in general retail sales within the iOS app ecosystem is partly attributed to the growing share of iOS device usage in China.

In 2021, the food delivery and pickup category experienced a significant milestone by temporarily surpassing the travel sector in terms of sales within the App Store ecosystem. With a remarkable $66 billion in sales, it became the second-largest category, surpassing travel, which recorded $56 billion in sales during that year.

However, in 2022, the travel sector regained its position as the second-largest category, demonstrating a remarkable resurgence. Sales within the travel category soared to an impressive $102 billion through the App Store, reclaiming its status as a major contributor to the platform’s revenue.

There was a noticeable resurgence in the travel and ride-hailing sectors in 2021. Both categories experienced substantial growth rates, reflecting the pent-up demand and the desire for people to resume travelling and commuting. In 2021, travel-related iOS app-based sales witnessed a remarkable 47% YoY growth, while ride-hailing app sales increased 30% YoY. The impressive growth trend continued in 2022; Travel-related iOS-app-based sales surged an impressive 84% YoY in 2022, surpassing their pre-pandemic levels and showcasing the substantial recovery of the industry. Meanwhile, ride-hailing services experienced a significant 45% YoY growth.

Notably, the category that experienced the most significant growth in both 2020 and 2021 was iOS-app-based grocery sales. The pandemic prompted a shift in grocery shopping habits, substantially increasing online purchases made through iPhones. This shift in consumer behaviour resulted in a remarkable 67% growth from 2019 to 2020 and a 74% growth from 2020 to 2021. Although iOS-app-based grocery sales stabilized in 2022, they still grew at a substantial rate of 20%, indicating that this change in consumer habits is here to stay.

In-app advertising

The growth of in-app advertising on iOS apps exhibited an accelerated pace in 2022 (up +24% YoY) compared to the previous year (+10% YoY), driven by the exceptional performance of social media, podcasts, and general retail apps.

Several key factors contributed to this growth, particularly in the realm of in-app advertising. The rise of certain short-video apps, retail giants like Amazon, and the popularity of podcasts played a significant role in driving the overall increase in ad spend. These platforms captured the attention of advertisers and provided effective channels for reaching their target audiences.

Overall, Apple paid a whopping $60 billion to iOS developers in 2022 alone. Since the launch of the App Store in 2008, the Cupertino giant has paid over $320 billion to app developers.

One thing is clear, the app revolution is here to stay, and the Apple App Store is leading the charge like a triumphant champion!


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