Report: App Store Generated $64 Billion in Revenue Last Year

BY Mahit Huilgol

Published 8 Jan 2021

iPhone App Store

As the world reels under pandemic, App Store revenues have shot up. A new CNBC report says App Store revenue has surpassed $64 billion in 2020, and it translates to a whopping 28% growth.

App Store revenues grew by only 3.1% in 2020, whereas the same spiked by a whopping 28% this year. This makes us wonder whether lockdown and pandemic acted as a catalyst. The majority of population is working from home, and thus they have spent a lot of money on apps and mobile games.

App Store and other Apple Services are slowly shaping up as a significant revenue source for the company. The previous fiscal report pegs Apple Service sales at $53.7 billion. Apple doesn’t reveal App Store revenue stats. However, it does mention the total payout to developers. The report is based on developers’ payout, and the actual figures might vary slightly.

Apple has paid developers $200 billion since 2008 and $45 billion in 2020. This is equal to 70% of the sales as the company takes a 30% cut. In other words, App Store revenue is likely to be $72.3 billion. Recently, another analytic firm Sensor Tower pegged App Store revenue at $72.3 billion, which is more than the latest report.

Last year it came to light that Amazon Prime App had a deal with Apple, allowing them to pay only 15% of subscriptions. However, the report assumes the fee to closer to 30%. This is based on the stat that only 16% of the app gets to take 75% of the revenue. A majority of the revenue comes from games. Typically these games monetize with in-app purchases that come under 30% commission.

Our Take

We wonder whether the revenue will drop this year. Especially since Apple is charging a reduced fee of 15% for smaller developers. However, numbers are on Apple’s side since the top 1% app publishers generate 93% revenue across the App Store.

[via CNBC]