After 15 years of the App Store’s existence, Apple’s software ecosystem continues to be a significant money maker for developers. A new report has found that a staggering US$1.1 trillion in sales stemmed from the App Store in 2022, mainly from retail, travel and food delivery apps, with the figures reflecting more than purchased apps and in-app purchases.
Announced by Apple overnight, the study from economists at US-based firm Analysis Group found that more money is being made than ever from the App Store economy. Of the US$1.1 trillion figure, Australian and New Zealand app developers accounted for US$14 billion (roughly AU$21.6 billion).
There are a couple of important things to note about this study. It uses very deliberate wording including “facilitated” in addition to “billings and sales”, which means it measures figures outside of what Apple takes a commission from. Here’s how Analysis Group defines these terms:
‘Billings’ refers to app purchaches and in-app purchases, including subscriptions, which use Apple’s in-app payment. ‘Sales’ refers to money spent by customers purchasing goods and services in general. We use the term ‘facilitated’ to include the various ways in which apps contribute to generating billings and sales.
Analysis Group
In other words, the overall impact measured is more than just purchased apps. It also encompasses goods and services bought using apps, reflecting how much money changes hands via the App Store, directly and indirectly.
What do the 2022 App Store sales figures mean?
One of the big messages Apple focuses on in the wake of the study is that more than 90% of the cited billings and sales went directly to developers, with no Apple commission taken. It’s well known that 30% is the standard App Store commission. Each time someone buys an app or an in-app purchase, Apple takes its cut. For smaller developers whose annual revenue falls below $1 million, the adjusted commission is 15%.
Retail is a major reason why Apple took a relatively minuscule amount of commissions according to the cited data. The company doesn’t take a cut on any physical goods and services purchased through apps. Whenever you order something from the Amazon app, book a ride with Uber, or get your groceries using the Woolies app, every cent goes directly to the business in question. These types of purchases represent the overwhelming majority of the money made through the App Store, more than actual App Store sales.
To get a clearer idea of how the App Store facilitates spending, here’s the US$1.1 trillion broken down by category according to Analysis Group:
- Digital Goods and Services: US$104 billion
- In-App Advertising: US$109 billion
- Physical Goods and Services: US$910
Overall, the App Store ecosystem as measured in the report grew by 29% between 2021 and 2022. Since the onset of the COVID-19 pandemic, spending via apps grew substantially and has remained steady since.
The timing of the report makes for interesting speculation, too. With WWDC next week, it’s expected that Apple will enable sideloading of apps with the launch of iOS 17. Going forward, to comply with European regulations, the App Store won’t be the only place to download apps from, hence the greater focus on the overall ecosystem. Apple also recently rolled out Tap to Pay in Australia, allowing for more payment options on the go.
Stay tuned for our upcoming comprehensive WWDC coverage. If industry speculation is accurate, the event will likely further contextualise today’s data.
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