The App Store grossed upward of $64 billion in 2020, according to a CNBC report.
Provided that number is correct, it’s a big jump from the relatively stable $48.5 billion and $50 billion respectively the App Store grossed in 2018 and 2019. It shows how, in contrast to many other businesses, the digital app economy boomed during the COVID-19 pandemic.
CNBC notes that Apple doesn’t reveal how much revenue the App Store makes. However, Apple does reveal the total it pays to developers. In a press release this week, the company said it paid developers $200 billion since 2008. That’s up $45 billion from a figure announced in January 2020. Since Apple typically takes a 30% cut from developers, this figure is equal to 70% of total App Store gross. That, in turn, works out to $64 billion.
It could be even more, however. The report goes on to state that:
“There are some exceptions to Apple’s 30% cut of digital sales, and Apple’s figures are rough, which means that Apple’s App Store total sales is likely even higher. Sensor Tower, an app analytics firm, estimates that the App Store did $72.3 billion in sales 2020.”
App Store in the spotlight
This year has been a tumultuous one when it comes to the App Store. As noted, App Store business boomed during lockdown. However, Apple also attracted plenty of scrutiny regarding its control of the App Store. Some of this came from developers, as in Apple’s high-profile clash with Fortnite-maker Epic Games. But Apple also faced congressional antitrust scrutiny that focused on App Store practices.
At the end of 2020, Apple seemingly tried to head off some of the criticism by slashing App Store fees for small developers from 30% to 15%. This applies to any developer that generates less than $1 million per year. Will this allay concerns about the App Store? We’ll have to wait and find out in 2021.