In brief
Apple earned US$4.9 billion through the App Store in the first half of 2017, 40% more than its US$3.5 billion net income in 2007. The article attributes App Store growth to app sales in China, new games and subscriptions, and anticipates a substantial contribution to Apple's goal of doubling services revenue by the end of 2020.
Data provided by a research firm shows that Apple earned US$4.9 billion in revenue through the App Store in the first half of 2017. Ten years earlier, the whole of Applehad net income of US$3.5 billion, meaning that Apple's App Store revenue in the first half of this year was 40% higher than the income from all its businesses in 2007.
As the iPhone sold strongly across most regions worldwide, App Store revenue also began to surge.
In early January this year, Apple disclosed that App Store revenue reached US$28.5 billion in 2016. Under Apple's customary 30% commission, the company received US$8.5 billion and developers received US$20 billion. App Store revenue exceeded US$20 billion in 2015, meaning that Apple earned approximately US$6 billion, while developers received more than US$14 billion.
On June 2, Apple also announced that, since the App Store launched in 2008, it had paid developersmore than US$70 billion in revenue shares. Meanwhile, Apple's App Store downloads grew by more than 70% over the preceding 12 months.
In terms of its share of revenue, the App Store accounted for only 1% of Apple's revenue in 2013. By 2016, that figure had tripled, reaching 3.4%. This means that services were accounting for an increasing share of Apple's total revenue. Financial results for Q2 this year showed that Apple's servicesrevenue was US$6.325 billion.
Although App Store revenue continued to rise year after year, iPhone sales began to decline. Analysts believed that App Store revenue growth came mainly from increased app sales in China, new gamesand the development of subscription models. From this perspective, despite the sharp fall in iPhone sales in China, the App Store was earning that money back. With Apple also set to take a 30% share of tips given to original content creators, App Store revenue in China was expected to remain substantial this year.
When it comes to making money, although Google Play far surpassed the App Store in downloads, the latter was much more profitable. In the future, however, the combined revenue of all Android app stores was expected to exceed that of the App Store. By 2021, Apple's App Store was projected to generate approximately US$60 billion annually, Google Play itself around US$42 billion, and other Android app stores US$36 billion.
At the time, the App Store already had more than 2 million apps. To provide users with a better experience and better services, Apple was preparing to launch iOS 11 in September this year and give the App Store a major upgrade. According to reports, the upgraded App Store would somewhat resemble the new versions of Apple Music and Apple News. The new interface would be divided into five key areas: the “Search” and “Updates” tabs would remain, with three new navigation buttons: “Apps,” “Games,” and “Today.”
When announcing this year's Q1 financial results, Apple CEO Tim Cook emphasized that the company's goal was to double revenue from its services business by the end of 2020. The App Store could be expected to make a substantial contribution.
In terms of net profit at the time, Apple still far outperformed many companies. In 2016, Apple's net profit was US$45 billion, compared with US$24 billion for Berkshire Hathaway, US$24 billion for JPMorgan Chase, US$19 billion for Google's parent company Alphabet, and US$19 billion for Samsung, among others.
Reposted from: https://technews.tw/2017/06/29/apple-app-store-half-2017-income-more-than-2007-income-40-percent/