By
Godfrey Benjamin
April 23rd, 2024
With more than 650 million visitors across 175 regions each week, App Store has generated more than $320 billion since its launch in 2008.
Seems that the App Store, the application base of Apple Inc (NASDAQ: AAPL), is slowing down its steady growth. Yesterday, Apple released its annual report with the revenue generated by App Store in 2022. The document demonstrates the total amount of money received from the App Store developers since 2008.
According to Apple, 2022 has been a ‘groundbreaking’ year for entertainment. With more than 650 million visitors across 175 regions each week, App Store has generated more than $320 billion since its launch in 2008. Compared to 2021, when the revenue totalled $260 billion, the App Store saw a jump of $60 billion. Developers receive between 70% and 85% of gross sales, based on if they qualify for Apple’s reduced rate. Notably, if all developers paid a 30% commission to Apple, Apple’s App Store generated more than $85 billion in 2022. But if the commissions paid were 15%, then App Store’s estimated gross would be lower, around $70 billion. And this is the same amount of sales as Apple suggested with its data point last year when it had paid developers $60 billion in 2021. The company first announced a cut of its commissions in November as part of a new program to cater to the needs of small businesses.
Further, the company spoke separately on its various services. Its services business grew in fiscal 2022 to $78.1 billion, which marks a 14% increase. However, that was a significant slowdown from the 27% growth rate the division posted in fiscal 2021.
Its Apple Arcade catalogue added more than 50 exciting new titles last year, including Warped Kart Racers, Jetpack Joyride 2, Gibbon: Beyond the Trees, Wylde Flowers, and Cooking Mama: Cuisine! The service also released over 300 updates and expansions for many existing hits, including Sneaky Sasquatch, The Oregon Trail, Mini Motorways, LEGO Brawls, and Angry Birds Reloaded. Further, its Apple Music base expanded the choice to over 100 million songs. Speaking of Apple TV+, it premiered some of the most celebrated series of the year and debuted a few broadly acclaimed movies. As a result, the service got Academy Award for Best Picture with CODA.
Apple Fitness+ also expanded its user base, becoming available to iPhone users in 21 countries and growing its library to 3,500 workouts and meditations.
The results shared by Apple look great. However, analysts pointed out that there is a declining trend in App Store performance. According to Morgan Stanley (NYSE: MS) analyst Erik Woodring, App Store saw a decrease in its income for six straight months from June to November.
Woodring said:
“While App Store growth remains near its lowest levels in history, and we acknowledge the global consumer remains challenged, we are encouraged to see growth trajectory continue to improve after bottoming in September.”
In 2023, Woodring predicts that App Store gross sales will be better, with the app seeing an increase in its worth.