Apple has been authoritative and determined about its revenue generation over years, that made the firm to be first in the world to touch $3 trillion market capitalization mark, which is still unreachable to most of the US companies. While, major part of revenue comes from iPhone and sales of its other products, Apple does collect a remarkable sum every year from its App store via third party app-developers.
From about 4.567 million apps and games (as of 2021) in App Store, Apple made nearly half a trillion from its App-store alone over 14 years of its service.
Apple had often been cursed for imposing an unfair ratio of settlement with app-developers on App store, as the world is not convinced of the tech amassing a huge cut for the platform.
Apple App-Store Charges
Apple, till 2020 had 30:70 ratio of paying out app developers, where Apple charges 30% commission on all paid apps and in-app purchases, which is why it had been criticized on. However, after 2021, Apple had reduced the commission to half, charging only 15% from app developers.
The policy came effective on Jan 1, 2021 and this applies to only small app makers on app store. Dubbed as ‘App Store Small Business Program’ will enable developers to have a lower 15% commission fee, only if the developers make less than $1 million per year across all their apps. Any developer who had crossed $1 million earnings per year mark, had to pay 30% commission cut to Apple.
Apple also said that the fee vary on basis of app developer’s earnings from apps on a particular year. So, if one had made above $1 million / year, say in 2021, he has to pay 30% fee and say in 2022, if the income falls under $1 million, he will be paying 15% cut. I hope, you understand.
It applies to all in-app purchases on app store including paid and free apps. Also, App developers has to pay an annual fee of $99, regardless of whether or not the app is free or paid for ‘Individual Developer Account’ in App Store.
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And this is how much Apple had earned and paid out to developers over years from its app-store..
Apple App Store Revenue
App store is a home to over 4 million apps and games (as of 2021) and 99.99% of them are third-party apps, Apple revealed.
| Year | App Store Revenue | Paid to Developers | Apple Gets |
|---|---|---|---|
| 2009 | $0.6 – $1 billion | $1 billion | -(Not known) |
| 2010 | $1.4 – $1.5 billion | $1.5 billion | -(Not known) |
| 2011 | $3.1 billion | $2.5 billion | $0.6 billion |
| 2012 | $5.3 billion | $2.5 billion | $2.8 billion |
| 2013 | $11 billion | $7.5 billion | $3.5 billion |
| 2014 | $14 billion | $10 billion | $4 billion |
| 2015 | $21 billion | $15 billion | $6 billion |
| 2016 | $29 billion | $20 billion | $9 billion |
| 2017 | $38.7 billion | $26.5 billion | $12.2 billion |
| 2018 | $46.6 billion | $34 billion | $12.6 billion |
| 2019 | $55.5 billion | $35 billion | $20.5 billion |
| 2020 | $72.3 billion | $45 billion | $27.3 billion |
| 2021 | $86 billion | $60 billion | $26 billion |
| 2022 | $86 – $87 billion | $60 billion | $26 – $27 billion |
| Total (Approx) | $450 – $470 billion | $320.5 billion | $130 – $150 billion |
Note: The data before 2013 are estimates and the numbers may not represent the exact value.
App store to hit $1 trillion
As you can infer from the table above, Apple has been constantly making $20 billion since 2019 from its App store, though 2022 was flat with 2021. Apple’s new policy of pay cut may open space to small app developers (which are now about 90% now) in coming years.
Apple also in plans to increase the app-store revenue by allowing ads into the store, which may distinctly support its revenue. The firm is going to allow sideloading in some countries, that would enable users to download apps from places other than App Store.
At this current pace, Apple is expected to hit a trillion dollars from its App store in about next 7 years, half the time it took to get the first $500 billion.
Apple has been the pioneer in technology and in business too, with major credits to its brand value and marketing strategies, that it has been following over years. And in coming years, the firm will prove its strong endurance with launch of its new lined-up products such as Apple VR Headset, foldable iPhone and more.
Which apple product has impressed you a lot? Drop your comments…
(For more such interesting technology and innovative detailing, keep reading The Inner Detail).