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According to CNBC’s analysis, Apple’s App Store achieved $ 64 billion in revenue in 2020, a 28% increase from the estimated $ 50 billion it made in 2019. This represents good growth for the App Store since the estimated increase between 2018 and 2019 was only 3.1%.
It’s hard to say the exact reason for the growth spike, but it likely has something to do with the COVID-19 pandemic. I can say from personal experience that I bought quite a few more games in 2020 than in the past, as well as fitness and productivity app subscriptions to try and take back control of my life in my 40s.
When Apple reports on its financial results, it combines the money it earns from the App Store with its service revenue, which is by far its fastest growing category. The company takes a 30% cut from most of the money entering the App Store, which, while there are caveats and exceptions, is billions of dollars in revenue. Apple generally monitors its take carefully, despite recent backlash from developers like Hey.com and even legal challenges from Epic.
However, its grip has recently loosened slightly, as Apple now only takes a 15% off developers who make less than $ 1 million a year from the App Store. It probably won’t change revenue estimates that much, as analysts have estimated that the top 2% of App Store developers make 95% of revenue.
Every year Apple reports how much money it has paid developers since 2008. CNBC used that to calculate App Store revenue by subtracting last year’s figure from this year’s figure, and then that represents Apple’s 30% reduction. While the numbers can be a bit rough, Apple isn’t self-describing them, so we can only get close to them. Either way, there are two hard things to argue with: App Store revenue has grown a lot this year, and it’s made a lot of money for the developers and for Apple.
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