With the increase in mobile apps, the mobile application industry is generating billions of revenues. This industry has been running and ruling over the last few decades. The two biggest mobile app stores are the App Store by Apple and Google Play by Google. Both of the stores contain millions of apps for developers and users. If we compare, Google Play is the biggest in the app market, especially in South East American and Asia countries. But it still did not achieve much more revenue than Apple’s App Store. The App Store is available in one of the largest countries, China, where it generates billions of revenue per year compared to Google play because it is banned in China.
There are other 3rd party apps available for people in China, which generate around $8 billion/ year in revenue. However, the number of Android users is more than apple users. Still, apple manages to generate a large amount of revenue from its App Store. Both platforms have much a lot of prominence in the last few years and have added different ways for developers to generate revenues. The main source of revenue generated by the App Store is because of the purchasing system. Most apps in the App Store require a subscription, although some are free, which results in a great increase in the generation of revenues. So in this article, we will look at how much money does Apple make from app store.
How Apple Generate so Much Money From The Services?
Although the main revenue generation is through App Store, other inbuilt features of apple generate millions of revenues per year. So it’s important to see how much money is generated for the other iOS apps and how much money does Apple make from app store.
1. Apple Music
The biggest source of revenue generation is Apple music. Apple Music was first launched in the year 2015. Apple Music is not for free, and people have to purchase a subscription to listen to their favorite tracks. As per the report by financial times, over 56 million customers have bought subscriptions to Apple music.
2.App Store
The Largest contributor to revenue is the App Store. Apple’s App Store is more popular than the Google Play store. It consists of millions of apps. The report shows that over 170 billion apps have been downloaded in the last 10 years. Most apps don’t require paid subscriptions, and Apple still manages to generate billions of revenue. The most downloaded game in App Store includes Candy Crush and Fortnite. At the same time, the apps requiring subscriptions include Tinder, Youtube, and many more. As per the reports, all the top 50 highest-grossing apps category require a subscription. One of the most popular paid apps includes face tune and Minecraft.
3.iCloud
Everyone with an iPhone, Mac, or iPad must be using iCloud. This is because apple provides only 5 GB of internal storage, which is very little, although free. So if you want to add more apps and need more space, buy a premium subscription to iCloud. The main purpose of adding the subscription is to generate revenues from iCloud. The plan for iCloud includes 50 GB storage for 99 cents. As of 2022, apple has generated 56 million from iCloud.
4.Apple Pay
Another way through which apple generates revenue is through its payment app, Apple Pay. Apple pays similarly to other payment apps, including GPay or PayPal. If users want to make any purchase, like a subscription, they can add money to their Apple Pay and make payments using it. You can also make contact list payments if you are paying at a retail store. The facility of money transfer is also available on Apple pay. However, Apple has claimed that it does not make any changes to merchants, developers, or users for using Apple Pay. But as per the reports, Apple still receives some amount from the transaction made using the Apple Pay app. In 2014, when it was first launched, there was a charge of about 0.15% on spending $100.
5.Siri and Maps
IOS has its inbuilt feature of map and Voice Assistant Siri. Most people think that Siri and maps are free. But what happens is that when you purchase the device, which is your smartphone or laptop, or iPad. The cost of the free apps is already included in the device’s price. This is how apple generates revenues from free apps. All these services generated total revenue of $9.13 billion in 2018.
How Much Does Apple Make With The App Store?
Recently Apple Incredibly announced that it had generated over $260 billion from the app store since its launch in 2008. And almost $60 billion in the last year. Apple’s vice president announced in the performance summary all its digital services provided in 2021. It was also mentioned that this year App store generated new record earnings more than twice the last year. As Christmas and New Year’s Eve are coming, the apple store will generate more revenue because of the sale. The largest number of revenues is generated through the games on the app store. Below is the rate of revenue generated by the iOS app.
Annual app & Games revenues in the year 2016 – 2021 in $ Billion
| Year | Revenue ($Billion) |
| 2016 | 43.5 |
| 2017 | 58.1 |
| 2018 | 71.2 |
| 2019 | 89 |
| 2020 | 111 |
| 2021 | 113 |
How are the revenues generated by the App store helping developers?
App store generated $643 billion in sales and billing in 2020,which is almost 24 percent higher than the previous year. As per the studies, the developer selling the services and goods across different categories has grown their business at a large scale. The App store has helped them to reach their customers. App creators help people stay connected, entertained, and healthy.
The app store played an important role in supporting developers to bring innovations that can help many people’s lives. Not only that, Apple is known for supporting even small businesses. Small businesses are the inclusive and thriving engine of different opportunities for the economy. It was recently stated that the rate of small businesses had increased by 40% from 2015. Small businesses makeup around 90 percent of developers of the App store. Many developers have fewer than millions of downloads and earn less than 1 million. However, the apps have generated much revenue for the App store.
What percentage of the amount does Apple take from the app store purchases?
For the one-year subscription or purchase, apple charges around a 30% fee. But after 2016, with their advancement and increased revenue, apple charged only about 15%. At the time of the first year, apple takes about 30% of your revenues, and you get only 70% of the subscription price for each monthly price.
After the completion of one year, the revenues will change and increase up to 85 percent for the subscription price, excluding the applicable taxes. So Apple makes only about 15% of the revenues. All the subscriptions provided or made on the app store generate great revenue for its users. Upgradation, crossfading, or downgrading does not cause any effect on early calculations.
The story of success is different for every single app in Apple’s App Store. Apple’s main objective is to help all its developers behind every single app, regardless of size, with tools to do a thriving business so that the developer can easily deliver the best experience for all Apple users.
Some studies have said that Apple’s App Store allows app businesses to reach their audience across 175 countries regardless of their size. For example, in the case of versa, who is the developer of Makar on, a video and photo editing app? The app is made in Shanghai, China, has almost 8 million downloads on the App store, and users across 173 countries are accessing it. Since its launch, it has earned about $150 Million as of 2020.
Summing Up
In this article, we have seen how much money does Apple make from the App store. So we have seen that apple generates a huge amount of revenue from the App Store. The App Store is used to download different applications, whether a photo editing app or a game. Most people use App Store to download games, resulting in a huge amount of revenue generation. Apart from this, other in-built applications in Apple generate many revenues. This includes iTunes, Apple Music, Apple Pay, and many more.
But the main cause of the generation of huge revenues is the use of the App store. In the year 2020, Apple generated almost $643 billion. That is almost double the revenues which were generated last year. The largest number of revenues is generated through the games on the app store. Since people are much more interested in purchasing apps from the App store, the App store’s growth will be more than 76 percent by 2025. It will make the App store the largest revenue generator for Apple and its users.
