Apple's App Store Ecosystem Supported A Total Of $519 Billion In Commerce In 2019

15/06/2020

Apple, the Cupertino-based iPhone maker, announced that its App Store facilitated an estimated $519 billion in billings and sales in 2019.

According to a study by independent economists at Analysis Group that were commissioned by the company, it was found that the highest value categories in the App Store were mobile commerce (m-commerce) apps, digital goods and services apps, and in-app advertising.

Out of that huge amount, Apple said that took 30% cut out of transactions, earned only from the $61 billion of those sales. This is significantly small as Apple only take portions of total billings that constitutes digital-only goods.

In-app advertising, also largely dedicated to mobile gaming, makes up another $45 billion.

Of everything else, the study found that sales from physical goods and services accounted for the largest share, at $413 billion. From ride-hailing solutions to food delivery apps to mobile retail shops from Best Buy and Target, Apple took no cut there.

"The results encapsulate the full sweep of the dynamic, competitive, and flourishing app economy, which has unleashed a torrent of innovation across 175 countries and revolutionized the way the world learns, works, and connects," the company said in a Newsroom post.

Apple App Store ecosystem commerce in 2019 chart
Credit: Apple

Quoted in the post, Tim Cook said that:

"The App Store is a place where innovators and dreamers can bring their ideas to life, and users can find safe and trusted tools to make their lives better.

"In a challenging and unsettled time, the App Store provides enduring opportunities for entrepreneurship, health and well-being, education, and job creation, helping people adapt quickly to a changing world. We’re committed to doing even more to support and nurture the global App Store community — from one-developer shops in nearly every country to businesses that employ thousands of workers — as it continues to foster innovation, create jobs, and propel economic growth for the future."

The study from Analysis Group and the announcement came a week before Apple's annual developer's conference, WWDC.

At the event, Apple is expected to reveal the latest versions of its operating systems, and persuades software makers to adopt the newest features and continue to support Apple platforms.

And this study suggests that there's indeed a lot of money to be made from making iPhone and iPad apps.

The App Store was launched in 2008, as a digital distribution platform for mobile apps on its iOS operating system.

The store allows users to browse and download apps developed with Apple's iOS software development kit. Apps can be downloaded on the iPhone smartphone, the iPod Touch handheld computer, or the iPad tablet computer, and some can be transferred to the Apple Watch smartwatch or 4th-generation or newer Apple TVs as extensions of iPhone apps.

When it was first launched, ut had only 500 apps available.

As of 2020, the store has around 2 million apps, visited by half a billion people each week across 175 countries. Collectively, those people have download apps hundreds of billions of times to their devices.

"It helps creators, dreamers, and learners of all ages and backgrounds connect with the tools and information they need to build a brighter future and a better world," said Apple.

While things are looking good for Apple, developers have alleged that Apple's App Store platform is unfair to smaller companies and lawmakers for years. This is because Apple has the mandatory 30% cut, meaning that the ecosystem is somehow only friendlier to those developers who have deeper pockers.

What's more, Apple is just one of the many large tech companies under increasing regulatory scrutiny due to their immense power in the market.

The U.S. government for example, wields it in anti-competitive ways.