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Apple AAPL benefited from strong momentum in App Store sales, boosted by social distancing standards induced by coronaviruses. This is reflected in the stock’s 77% rebound over the past year, which outperformed the S&P 500’s 17.7% rise.
The strong growth of the App Store can be attributed to the momentum in China. The iPhone maker generates more revenue in China than in any other country, the majority of it coming from games.
As a result, Apple is working hard to comply with the requirements of Chinese content regulators. Apple removed a record 46,000 apps, including 39,000 games, from its App Store in China on December 31, 2020 as part of the crackdown on unlicensed games on the platform, according to a Reuters report.
The deadline for game publishers to submit a government-issued license number was initially set by Apple for June 30. However, the company subsequently extended the deadline to December 31.
IOS games have long been required to obtain a Chinese gaming license to operate in the country. The government-issued licenses would allow users to make in-app purchases through the App Store in China, considered the largest market for mobile games.
According to a Qimai report, some of the apps that were affected by the scan include Take-Two InteractiveTTWO’s NBA2K20 and Assassin’s Creed Identity by Ubisoft UBSFY. There are reports that only 74 of the 1,500 top paid games remained after the removals.
Additionally, the company froze updates to nearly 30,000 apps in August 2020, which was not in line with its licensing policies. These applications were then removed.
Performance over one year
Apple’s rigorous efforts to help developers around the world
The App Store accounted for 68.4% of total sales, which totaled $ 276.6 million, up 35.2% year-over-year on Christmas Day 2020, compared to Alphabet GOOGL Google Play Store sales of $ 129 million, up 33% year-over-year and accounting for 32% of the total, according to a report from Sensor Tower.
Not counting third-party Chinese app stores, iOS and Android users in 2020 downloaded 130 billion apps and spent a record $ 112 billion, according to App Annie’s year-end forecast. .
Apple’s App Store has faced backlash from third-party developers over the past year for requiring them to pay a 30% commission and only use the in-app purchase system of the company.
This Zacks Rank # 3 (Hold) company has made an effort to fill in the gaps that developers find in order to bypass some of the in-game purchases that must be made through the App Store. You can see The full list of current Zacks # 1 Rank (Strong Buy) stocks here.
Apple has reduced its App Store commission fees from 30% to 15% on paid apps and in-app purchases for small developers who earn less than $ 1 million in annual sales from their apps and those who are. new in the store as of January 1, 2021..
As part of Apple’s new Small Business App Store program, the new commission structure aims to help small and home developers adjust to a virtual world during the coronavirus pandemic.
The App Store continues to garner the attention of prominent developers around the world, helping the company deliver exciting new apps that drive traffic to the App Store. The new program is expected to attract more niche app makers, game developers, and other members of the iOS ecosystem.
As noted in a court record, cited by a report from The Verge, Apple’s App Store currently has 27 million developers worldwide, reaching out to users of more than 1.5 billion Apple devices in the world. worldwide in 175 countries and over 40 languages, with over 180 local payment methods and 45 currencies accepted. The store hosts over 1.8 million apps.
Last week, Apple removed an iOS app called Vybe Together from the App Store, which encouraged users to host underground secret parties despite social distancing measures and pandemic restrictions.
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