A new study by independent economists at Analysis Group has found that the Apple App Store ecosystem supported $519-billion in billings and sales globally in 2019.
The study, released this week by Apple, found that the highest value categories were mobile commerce apps, digital goods and services apps, and in-app advertising. The results encapsulate the full sweep of the flourishing app economy, which has unleashed a torrent of innovation across 175 countries.
The study reveals that the direct payments made to developers from Apple are only a fraction of the vast total when sales from other sources, such as physical goods and services, are calculated. Because Apple only receives a commission from the billings associated with digital goods and services, more than 85 percent of the $519 billion total accrues solely to third-party developers and businesses of all sizes.
“The App Store is a place where innovators and dreamers can bring their
ideas to life, and users can find safe and trusted tools to make their
lives better,” said Tim Cook, Apple’s CEO. “In a challenging and
unsettled time, the App Store provides enduring opportunities for
entrepreneurship, health and well-being, education, and job creation,
helping people adapt quickly to a changing world. We’re committed to
doing even more to support and nurture the global App Store community —
from one-developer shops in nearly every country to businesses that
employ thousands of workers — as it continues to foster innovation,
create jobs, and propel economic growth for the future.”
Of the $519 billion the App Store ecosystem supported in 2019, the study
found that sales from physical goods and services accounted for the
largest share, at $413 billion. Within that category, m-commerce apps
generated the vast majority of sales, and of those, retail was the
largest, at $268 billion. Retail apps include those that digitally
represent brick-and-mortar stores such as Target and Best Buy, as well
as virtual marketplaces that sell physical goods, such as Etsy, but do
not include grocery delivery, which is its own category.
Other types of m-commerce apps were among the largest sources of sales
from physical goods and services. Travel apps, including Expedia and
United, accounted for $57 billion. Ride-hailing apps, including Uber and
Lyft, comprised $40 billion in sales, and food delivery apps, including
DoorDash and Grubhub, made up $31 billion.
Billings and sales from digital goods and services comprised $61
billion, and this category included apps for music and video streaming,
fitness, education, ebooks and audiobooks, news and magazines, and
dating services, among others. Games, the type of app most downloaded in
2019, was the largest generator of billings and sales within this
category. Notable games of 2019 included “Mario Kart Tour,” which was
the most downloaded game of 2019, and “Sky: Children of the Light” from
indie developer thatgamecompany, which won Apple’s 2019 iPhone® Game of
the Year.
In-app advertising sales accounted for $45 billion, and of that, 44
percent was derived from games. Non-gaming apps that generate
substantial in-app advertising sales are often free to download and use,
such as Twitter and Pinterest, though others also offer in-app
purchases to access content, such as The New York Times and MLB.com.
The study looked at 2019 data to capture an accurate snapshot of the
full App Store ecosystem, taking into account all sources of commerce.
As a result of social distancing protocols associated with COVID-19,
individuals have changed the way they live their lives and are spending
more time on their mobile devices. Social apps are helping friends and
families stay connected, and education and business collaboration apps
are helping students and employees adjust to remote working
environments. Food and grocery delivery apps have benefited from
increased consumer demand at the same time as apps related to businesses
that have faced restrictions, or those that require in-person
interactions, have seen a sharp drop-off. Many brick-and-mortar
businesses have turned to mobile commerce, including some that may
otherwise have been forced to close without this alternative digital
platform.
