Tim Cook on stage at Apple’s September 10, 2019 event.
Source: Apple
Apple said Wednesday that its App Store facilitated an estimated $643 billion in billings and sales during 2020, according to a new study commissioned by the company.
The figure marks a 24% increase from last year, as the Covid-19 pandemic pushed many consumers toward their phones and tablets.
The latest figures come as Apple faces increased scrutiny over how it profits from in-app purchases. Apple takes a cut of between 15% and 30% from purchases of software or digital goods from apps distributed through the App Store.
Developers have alleged that Apple’s App Store platform is unfair to smaller companies. Most recently, Epic Games sued Apple and argued in court that the company’s App Store is anti-competitive.
Apple has denied the allegations and has said it “does not have a dominant market share in any category where we do business” and recently cut its App Store commissions to 15% for smaller companies. In response to the suit, Apple is arguing that it built the App Store and gets to set the rules, which are designed to ensure that apps are high quality and secure.
The study from the Analysis Group includes both transactions that Apple handles, including paid apps and in-app purchases, as well as purchases and other economic activity that happened through apps where Apple wasn’t directly involved, such as sales of ads in apps. The report said that about 90% of total billings and sales facilitated by the App Store ecosystem in 2020 occurred outside of the App Store, meaning that Apple collected no commission on those sales.
The report also comes ahead of Apple’s annual developers conference, WWDC, and highlights the company’s work with small businesses. Wednesday’s announcement suggests there’s a lot of money to make from apps, and is likely an effort to continue to attract people to build new services around Apple products.
According to the study, the $643 billion generated through iPhone and iPad apps in 2020 is made up of:
- $511 billion from sales of physical goods and services through apps, including $383 billion from retail apps, $38 billion through travel apps, and $36 billion from food delivery and pickup
- $86 billion from digital goods and services
- $46 billion from in-app advertising
— CNBC’s Kif Leswing contributed to this report.
