Apple has paid App Store devs over $70 billion

Can its winning streak continue?

Apple, iOS, iPhone, App Store, developers
Credit: Apple

Apple is shameless. It can’t help but to share landmark statistics, such as today’s news that developers on its platforms have earned over $70 billion since the App Store launched in 2008.

And still growing

We know other mobile platforms are growing too, but surely Apple’s fading iOS empire has reached its zenith? Not so, Apple states, confirming that App Store downloads have “grown over 70 percent”.

[Also read: WWDC 2017: 10+ predictions for enterprise IT]

The range of apps driving good business for Apple’s developer community continues to expand. Games and entertainment remain the top-grossing apps categories, but education, training, and a range of other apps are growing in importance. The company revealed a few interesting stats to reflect this:

Lifestyle apps, as well as Health and Fitness, have experienced over 70 percent growth in the past year.

The Photo and Video category is also among the fastest growing at nearly 90 percent growth.

"People everywhere love apps and our customers are downloading them in record numbers," said Philip Schiller, Apple’s senior vice president of Worldwide Marketing. “Seventy billion dollars earned by developers is simply mind-blowing.”

Only last week we learned its platforms are creating developer millionaires.

Expanding the business

Apple is working to expand the opportunity it provides developers.

In 2016, the company introduced APIs that let developers introduce payments via Apple Pay (as seen in Starbucks gift cards), and its Messages apps platform continues to drive a range of other opportunities.

Developers in 25 app categories can also provide apps sold on a subscription basis. This appears to be shaping up as quite a good way for developers to make money, as well as making a good recurring income for Apple. “App Store’s active paid subscriptions are up 58 percent year over year,” the company said.

Apps offering subscription sales come in a slew of forms, from conventional media apps such as Netflix and Hulu all the way through to cooking network, Tastemade and a range of image editors, including Over and Enlight.

Next-generation experiences

In future, the company plans to extend virtual and augmented reality tools developers can use to create next-generation VR/AR experiences.

These engaging experiences will make a lot of money in the games space, but have big implications in training, healthcare, and enterprise productivity.

Apple’s plans will also put it among peers like Unity and Steam in offering tools to develop these experiences. And that’s money for developers and opportunity for enterprise investors.

Think about how the extremely addictive nature of VR and AR titles may capitalize on current trends for subscription-based and in-app purchase supported games.

Decluttr.com claims Pokemon Go generates $1,113 per minute across all platforms; Clash of Clans pulls in $1,191 per minute across all platforms. Apple gets a nice chunk of the money raised from players on its platforms. Based on those figures, even a highly conservative estimate suggests it could be raising at least $125,000 each day from Pokemon Go alone.

Can growth continue?

How can Apple’s growth continue? After all, we know competition in the smartphone industry is intensifying at the premium end of the market it dominates. We also know smartphones are saturated in developed markets – Kleiner Perkins Mary Meeker’s Internet Trends report notes that the rate of growth of global smartphone shipments slipped to 3 percent from 10 percent year on year. What we do not know is how much this reflects pent up demand for Apple’s much-anticipated iPhone 8.

Apple hopes to maintain its growth by increasing its business in rapidly developing economies. China has already become its second most profitable market, even as the company seeks to build bridges into India.

These are shrewd moves.

Meeker notes that India’s economy is the fastest large growth market on the planet, up 6.8 percent year-on-year. Despite the cost of connectivity, India remains the world’s most active market in terms of time spent using mobile devices outside China, Kleiner Perkins said. Apple's decision to make iPhones in India should widen its reach in that market. (Meanwhile in the background the company continues to invest in that other emerging huge hit sector, cars).

Digital health - another growth driver

Apple has been working in the digital health sector for a long time. This work is about to pay off, as the sector hits what Meeker believes is an “inflection point”.

The company is alleged to have developed a non-invasive diabetes sensor, and has made big investments in medical research, patient health records and a range of supporting technologies that should underpin enterprises with feet in the medical space.

The rate of medical advances is increasing incredibly fast as digital data proliferates. Use of health apps is up 15 percent globally, year-on-year; while the number of years it takes to double medical knowledge is also declining.

That there are now diagnostic tests available for 5,007 genetic disorders is quite remarkable when you consider that there were under 3,000 of these in 2012, and just 114 in 1993.

Long-term view

Apple’s decision to tout the business case it offers developers on its platform is hardly surprising in the week before its big WWDC conference next week.

Its efforts to expand into key markets, new technologies and to create foundational technologies to support rapidly proliferating sectors such as digital health mean the opportunity its platforms offer developers will only expand.

This should give developers and enterprise users the confidence they need to invest in Apple's platforms within their medium and long term digital strategies.

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