It appears the Apple App Store is a cash cow. iPhone and iPad users spent just over $1.4 billion on apps during the last week of 2019, 16 percent more than they spent in 2018. And yes, you read that right … billion.
New Year’s Day was particularly busy. Apple reported that the App Store set a single-day record of $386 million in sales. The store generated $54 billion in 2019 overall, nearly doubling what Google Play brought in. However, both app stores saw significant year-over-year increases – 16.3 percent and 18.1 percent growth, respectively.
The most popular free downloads for iPhone users were social media apps and YouTube. Snapchat, TikTok, Instagram, and Facebook Messenger all led the charge. On the paid app front, a photo editing app (Facetune), employee scheduling app (HotSchedules), and weather forecast app (DarkSky), landed at the top.
Is the Future of Gaming on Mobile?
Many of the most popular apps offered through Apple’s App Store are video games. Smartphones have evolved far beyond two-way communication devices and now enable high-quality gaming experiences.
Much of mobile gaming’s success is due to the rise of “free-to-start” titles, which offer users the opportunity to try games risk-free without spending any money. Many of the top-grossing mobile games of all time only charge for in-app purchases. Developers gain loyalty from players first and then roll out compelling add-ons and limited-time-only specials.
The free-to-start games, “Mario Kart Tour,” “Fortnite,” and “Call of Duty: Mobile,” dominated in 2019. They all offer in-app microtransactions. Eight and a half years later, Minecraft for mobile continues to rake in the dough. In 2018, the game pulled $110 million combined between app sales and in-app purchases.
Beyond the free-to-start model, developers are continually experimenting with new ways to monetize apps. Between marketing ads, subscription plans, a-la-carte items, version updates, and software licensing, there is a myriad of ways for developers to maximize their ROIs. Since the App Store launched in 2008, developers have earned more than $155 billion, of which Apple takes between a 15-30% cut.
Apple Expanding into Services
Apple used 2019 to expand beyond electronics. The company launched Apple Arcade, Apple News+, and an Apple TV+ subscription service, all in the last year. It remains unclear how many people play Apple Arcade games, and Apple TV+ has had a less-than-stellar launch. However, over 100 million people read Apple News on Android and iPhones regularly.
Additionally, Apple entered the banking space with the launch of a branded credit card that enables holders to pay for iPhones with interest-free monthly installments. The financial services play is one that other tech giants, like Uber, are following as well. Venmo is also planning to launch a credit card in 2020 to go along with its debit card.
Apple’s SVP of internet software and services, Eddy Cue, summarized the company’s year well. “2019 was the biggest year for services in Apple’s history. We introduced several exciting new experiences for our customers, all while setting the standard for user privacy and security.”