Deep Analysis of Apple Paying Over $260 Billion To App Store Developers In 2021
Apple’s core objective is to innovate; there’s no doubt in that.
From enthralling apps to valuable content to transformative experiences, Apple’s assets have become a hub where users come to enrich their lives globally.
And one integral source of Apple that continues to be the pinnacle of innovation is the App Store.
Let it be timely entertainment, creativity, productivity, or pretty much anything else; with minimal efforts, users are able to find the digital product/application that they’re looking for.
This aspect has been capitalized on many times over the last decade by publishers and developers.
By creating incredible digital experiences, businesses have earned $200 billion+ in the last decade solely from the App Store.
You may already know about App Store, but I’m going to give a quick overview of the platform just to drum up interest right from the start.
App Store is a platform where businesses connect with more than half a billion people from 175 countries weekly, and this aspect alone has enabled businesses to earn more than $260 billion since the App Store was launched in 2008.
The number revealed by Apple this year indicated the viability of the App Store ecosystem and how it continues to create opportunities globally.
Let’s dive deep into the details and analyze the whole scenario of Apple’s $260 billion paying announcements.
Propelling SMBs and Large-Scale Businesses Forward by Paying in Billions
In the 2021 holiday season, App Store customers spent more than ever before between Christmas Eve and New Year’s Eve, almost doubling the revenue that was recorded in the previous year (2020).
Although Apple faced antitrust lawsuits and tighter regulations in different markets this year, it still managed to release new reports recently that indicate the total amount of money that Apple had been paying to the developers since the App Store’s launch back in 2008.
Here are some highlights of the report:
- In the report, the amount paid to developers had risen up from $200 billion, which was recorded by the end of 2020.
- Apple had paid $60 billion more in 2021 as compared to last year.
- By the end of 2019, Apple had paid an estimated amount of $155 billion.
- Since the App Store launched in 2008, developers have earned $120 billion, with more than a quarter of that in the past year alone.
Now, looking at the whole scenario closely, we predict that the total sum of payout to the developers jumped from $35 million in 2018 to 2019 to $45 billion in 2019 to 2020.
However, because the total sum of the amount paid to individual apps varies, the clarity factor has been compromised through which entrepreneurs were able to gauge the feasibility or lucrativeness of the App Store.
The new norm is Apple focusing on the value that it is delivering to the developers and publishers.
Hence, the company has restructured its commission structure – vastly reducing the percentage of revenue that it was earning from developers and publishers.
Furthermore, Apple opened its doors to 11 female-founded app development companies for the inaugural session of Entrepreneur Camp. The program is designed to provide female appreneurs with the tools and technologies needed to thrive in today’s global iOS app economy.
Apple also launched the small business program in November 2020. In this new initiative, the company reduced its commission from 30% to 15%, but this, of course, came intact with a few conditions.
The reduced commission mentioned above was limited to the iOS qualifying apps, and preference was given to the apps that earned up to $1 million annually.
The dropped commission offering was also given to the new app store publishers if they were to participate in apple’s new partner program.
There are no actual figures that Apple gave that addressed how many publishers or developers will be given the aforementioned opportunities, but they did say that a ‘vast majority’ would qualify for the programs launched.
In announcing another record set by App Store, we observed that the company was not promoting its success, but it was more like a self-promotional campaign.
We believe that the idea behind this approach was to avoid getting unnecessary traction to their outsized gains, which were massive, to say the least.
The company noted that consumers had spent more between Christmas and New Year’s Eve in 2021, almost doubling the growth metric from last year – most of which was derived through iOS games.
But unlike the last year, where Apple gave solid numbers about the spending they recorded on Christmas and New Year’s Eve ($1.8 billion), they decided not to document this year’s revenue.
This year marks the point where Apple decided to adapt to a more developer and publisher-friendly approach.
Observing more and more developers stepping back from investing in the app store, which also became a topic for a congressional hearing and prolonged challenges within the entire app review process – Apple did make a very strategic decision.
In addition to that, in the Apple and Epic Games case hearing, Apple was ordered by the court to make changes to the App Store policies and functionality.
The verdict was passed to make the third-party payment options available for the developers, and this was actually the court ruling in favor of Epic Games.
By this time, Apple had lost its grip over different markets globally, i.e., Japan and South Korea.
In these specific regions, Apple was forced to allow links to an external website and bend the commission structure to give developers and published control and transparency over their earnings.
And that’s all the details of the entire Apple paying $260 billion to developers and publishers. Let’s see how Apple plays now that it has opened the gates for third-party payment options providers.
Whatever the results are, you can surely capitalize on the stats mentioned above to unlock growth opportunities for your businesses.
Author : Nabeel
Nabeel has a flair for strategic innovation and tech-driven transformation. He leads the Content Marketing Team at TekRevol. He thrives on exploring and sharing information about the transformative impact of technologies and strategic innovation on SMBs, startups, and enterprise-grade organizations.
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