Apple's App Store Sales Top $28 Billion
January 05 2017 - 8:59AM
Dow Jones News
By Tripp Mickle
Apple Inc.'s App Store generated record revenue of more than $20
billion for developers in 2016, the company said Thursday, as that
business roughly maintained its growth rate even as iPhone sales
volumes declined.
The figure implies the App Store's total revenue topped $28.5
billion, with Apple collecting about $8.5 billion based on its 30%
share of sales.
A year ago, Apple only said its App Store billings were over $20
billion in 2015, suggesting developers took more than $14 billion
and Apple's revenue topped $6 billion.
That implies growth of roughly 40% in 2016, in line with the
growth Apple was estimated to deliver in 2015. It is hard to say
definitively, because Apple doesn't provide exact figures for
comparison.
App Store revenue has soared over the years on rising sales of
iPhones world-wide, but with iPhone volumes down in the last fiscal
year, growth came from a mix of surging sales in China, new games
and rising subscription billings.
Apple said last year's sales of apps rose 90% in China, where
the App Store has faced pressure from the government. On Wednesday,
Apple confirmed that it had pulled the New York Times from its App
Store in China, following a request from Chinese authorities.
On Thursday, Apple said Nintendo Co.'s new game "Super Mario
Run" generated more than 40 million downloads in its first four
days. Subscription billings for apps such as Netflix and Tinder
increased 74% last year to $2.7 billion.
The company said the App Store generated record sales for a
single day on Jan. 1, 2017, with nearly $240 million in purchases.
That followed more than $3 billion in sales during the December
holiday season.
The App Store represents a fraction of Apple's overall sales,
which totaled $215.64 billion during its fiscal year ended Sept.
24, but most of the revenue from apps flow straight to the bottom
line, making it an important contributor to the company's $45.69
billion in annual profit.
The roughly 2.2 million apps available also boost the appeal of
iPads and iPhones and help create a universe where customers
benefit from owning multiple Apple devices on which apps are
synchronized.
Amid mounting criticism from President-elect Donald Trump for
producing the iPhone and other products in China, Apple has
increasingly pointed to its App Store as an example of the types of
jobs it has created. It said more than 1.4 million U.S. jobs are
attributable to its iOS platform and the App Store, and these jobs
didn't exist before the App Store launched in 2008.
Apple said that since the store's inception developers have
earned more than $60 billion.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
January 05, 2017 08:44 ET (13:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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