Apple App Store growth slows: $70 billion to $85 billion in revenue in 2022

BABWNEWS

According to reports, every January, Apple will disclose the revenue it has created for App Store developers since 2008. This data can also help analysts and Apple investors get a general idea App Store profitability.

  But the data disclosed this year shows that the growth of Apple’s App Store has entered a plateau.

  On Tuesday, local time, Apple announced that it has paid out $320 billion to developers so far, an increase of $60 billion from $260 billion last year. Apple pays developers 70% to 85% of gross App Store sales, depending on the commission rate.

  If all calculations are based on a 30% commission, the gross revenue of the App Store in 2022 will exceed US$85 billion. If all calculations are based on a 15% commission, the gross revenue of the App Store last year was about 70 billion U.S. dollars.

  This incremental figure is the same as the previous year — Apple said it will pay developers $60 billion in 2021.

  However, this estimate of App Store gross revenue is not precise, because it is impossible to know exactly how many developers pay the 15% commission and how many pay the 30% commission. In addition, Apple’s figures have been rounded.

  In fact, Apple itself stated that the App Store business scale calculated through developer profitability is not accurate. In addition to the difference in commission rates, the vast majority of developers actually receive lower commissions through the App Store Small Business Program–available to developers with less than $1 million in annual sales.

  In its 2022 press release, Apple said the App Store had another “record-breaking” year, with subscribers growing from 745 million in 2021 to 900 million. This figure includes users who subscribe to any service through the App Store, not just Apple TV+ and Apple Music subscribers.

  Tuesday’s data did, however, underscore the weakness of the App Store’s slowing growth over the past year. This is important to investors since the App Store is a big part of Apple’s services business and a big source of profit for the company.

  Revenue from Apple’s services business grew 14% in fiscal 2022 to $78.1 billion. But a sharp slowdown from 27% in fiscal 2021.

  The figures for 2022 are easily dwarfed by the massive growth in app usage and sales in 2020 and 2021 as people bought more games and software during the COVID-19 pandemic. In the face of rising U.S. interest rates and a gloomy U.S. economic outlook, Apple may also face some uncertainty.

  Morgan Stanley analyst Eric Woodring has been watching the slowdown in the App Store. According to his data, App Store’s net income has been declining for six consecutive months, and it did not return to growth until December last year.

  Woodring said in a research report this month that App Store app sales will grow in 2023 because the base in 2022 is relatively low, and the increase in app prices in international markets late last year will also benefit Apple.

  ”While App Store growth remains near record lows and we recognize that global consumers continue to face challenges, we are encouraged to see a continuation of the growth curve after bottoming out in September,” he wrote.


Daniel J. Brown

Daniel J. Brown (Editor-in-Chief) is a recently retired data analyst who gets a kick out of reading and writing the news. He enjoys good music, great food, and sports, with a slant towards Southern college football, basketball and professional baseball.

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