App Store Generates $519 Billion Dollars in Commerce in 2019

With global sales surpassing half a trillion dollars in 2019 alone, Apple’s App Store offers a flourishing dynamic and competitive platform for e-commerce for developers and companies worldwide

Market research conducted by independent economists at the Analysis Group in a new study revealed the scale of the App store’s economy and where the highest value categories lie — mobile commerce (m-commerce) apps, digital goods and services apps, and in-app advertising. This encompasses the full range of the entire app ecosystem of the App Store that has spurred innovation in 175 countries, transforming the way that we connect, learn and work.

The App Store launched in 2008. Today, the App Store is home to almost 2 million apps and is visited by half a billion people each week across 175 countries, helping creators and curious people eager to learn and connect.

“The App Store is a place where innovators and dreamers can bring their ideas to life, and users can find safe and trusted tools to make their lives better.”

— Tim Cook, Apple CEO

The Analysis Group study looked at 2019 data to capture an accurate snapshot of the full App Store ecosystem, taking into account all sources of commerce. The study revealed that sales from physical goods and services accounted for the largest share of 2019 sales at $413 billion. In that category, m-commerce apps generated the majority of sales, and retail was the largest within this division at $268 billion. Retail apps included apps of traditional brick-and-mortar stores such as Target and Best Buy, and virtual marketplaces that sell physical goods, such as Etsy. They do not include grocery delivery, which is its own category.

Image by Jean-Marc Giboux | Credit: AP Images for Target — Image by Jean-Marc Giboux | Credit: AP Images for Target

Other m-commerce apps that also generated significant sales from physical goods and services included travel apps such as Expedia and United, that accounted for $57 billion; ride-hailing apps, including Uber and Lyft, comprised $40 billion in sales; and food delivery apps, including DoorDash and Grubhub, making up $31 billion.

Billings and sales from digital goods and services totaled $61 billion. This category included apps for music and video streaming, fitness, education, ebooks and audiobooks, news and magazines, and dating services, among others. Games were the most popular apps within this category. Notable games of 2019 included “Mario Kart Tour,” which was the most downloaded game of 2019, and “Sky: Children of the Light” from indie developer thatgamecompany, which won Apple’s 2019 iPhone Game of the Year.

In-app advertising sales also accounted for $45 billion, and of that, 44 percent was derived from games. Non-gaming apps that generate substantial in-app advertising sales are often free to download and use, such as Twitter and Pinterest, though others also offer in-app purchases to access content, such as The New York Times and MLB.com.

Changes Due to COVID-19

As social distancing protocols have become common worldwide due to COVID-19, individuals have changed the way they live and are using more apps. Social apps help friends and families stay connected, while education and business collaboration apps are helping students and employees adjust to remote working environments. Food and grocery delivery apps have benefited from increased consumer demand at the same time that apps related to businesses that have faced restrictions, or those that require in-person interactions, have seen a sharp drop-off. Many brick-and-mortar businesses have also turned to mobile commerce, including some that may otherwise have been forced to close without access to this alternative and popular digital platform.

Apple Entrepreneur Week Kicks Off, App Earnings Hit New Highs

As Apple’s inaugural entrepreneur camp kicks off with 11 female founded app companies, app developer earnings cross new threshold. App developer earnings reach $120 billion since the 2008 App Store launch, an additional $20 billion in earnings since last summer alone.

On January 28th of this year, Apple opened its doors to attendees of its new entrepreneur camp - an innovative program designed to provide female app creators with the tools needed to thrive in today’s global app economy. A two-week immersive hands-on technology lab, the Entrepreneur Camp helps participants work on their apps with help directly from Apple experts. The program also has sessions on design, technology and App Store marketing. Each student also gets ongoing guidance and support from an Apple Developer Relations representative for a year. The curriculum encourages developers to use the latest Apple technologies such as optimizing for the A12 Bionic chip, integrating Core ML, building ARKit experiences and more. Each participating company will also receive two tickets to WWDC and complementary membership to the Apple Developer Program for one year.

“The App Store is the new digital Main Street, and creative developers are tapping into the vast potential of the global app economy.”

— Esther Hare, Apple Senior Director

“In the past, starting a small business often meant having to invest in overhead, inventory or retail space. Today, a world of opportunity opens up with some coding skills and an entrepreneurial spirit,” said Esther Hare, Apple’s senior director, Worldwide Developer Marketing and executive sponsor, Women@Apple. “The App Store is the new digital Main Street, and creative developers are tapping into the vast potential of the global app economy. We hope that this program helps to inspire women around the world to learn to code, join the iOS development community and share in the thriving app economy.”

The new camp will be held on a quarterly basis with up to 20 app companies accepted. Admission to the select program requires an app submitted by a female founded company with at least one woman on the product development team. More details are available here: developer.apple.com/entrepreneur-camp.

For this first session, the apps that have been selected include Bites by Warehouse Apps LLC; Camille by Ohhh, Inc.; CUCO: Lembrete de Medicamentos by CUCO Health; Deepr by Mental Mobile, LLC; D’efekt by Tatevik Gasparyan, Nané Toumanian and Vahagn Khachikyan; Hopscotch by Hopscotch Technologies; LactApp by LactApp Women Health; Pureple by Iceclip LLC; Statues of the La Paz Malecón by Estudio Chispa; WeParent by FamTerra Inc.; and Seneca Connect by Seneca Women.

As the App Store Turns 10, We Take A Look Back

The App Store opened July 10, 2008, transforming the way we communicate, work, play and learn.

Over the last ten years, the App Store has revolutionized the world, introducing the concept of apps, democratizing software distribution and igniting innovation. Today there are customers in over 155 countries worldwide and over $100 billion has been paid out to developers.

Apps themselves are a global phenomenon, in use by people of all ages and backgrounds.

Apps have become part of the daily lives of people all over the world, and an essential part of their personal goals, play and productivity. This revolution continues today.

Creating a Safe, Trusted App Marketplace

Prior to the launch of the App Store, the software industry was dominated by a few powerful players. An individual software developer could not put out his or her own software as the cost of distribution was too high to compete with the big players. The App Store changed all of this, allowing anyone whether they were a single developer, a small studio or large company, put out a custom app of their own design and reach customers all over the world. The App Store opened the door for any developer.

The App Store also emphasized consumer privacy and set up guidelines for developers to ensure this and a security process for app submissions. This protected consumers and ensured that the App Store was a safe marketplace for consumers, while providing them with an excellent experience as well. Over the years, the App Store has added categories and different ways to discover and access apps. The App Store has become enormously successful over the years and by June 2018, had paid out $100 billion to developers.

Last year, Apple unveiled its new App Store, with dedicated Games and Apps tabs to help customers find what they were looking for and other features to encourage discovery and access to new apps. The Today tab also spotlights compelling app stories. Customers can now also learn more about the people who created apps they love to use. These stories have been read by over 1 million people and that number continues to grow. The App Store itself sees over 500 million visitors per week who now spend more time exploring and discovering new apps.

Inspiring New Mobile-First Businesses and the App Economy

The App Store and the popularity of the iPhone in 2007 and iPad soon after in 2010, led to the rise of new mobile-first businesses. The App Store inspired new ideas and opened the doors for individual advancement through app companies, solo entrepreneurs and smaller studios. The iPhone ignited business transformation in the ways people communicate, work, learn and play and the App Store laid down the foundation for using 'apps.' A new method of sharing information was born - apps. Apps could serve any industry.

“Over its 10 years so far, the App Store has developed into the richest, most diverse, and most accessible software ecosystem the world has ever seen.”

— Marco Arment, developer of Overcast

The App Store empowered many people all over the world to be successful and creative in ways that had never been achieved before.

How Customers Interact with Business

In the last 10 years, apps have become an important method of customer interaction with businesses. Apps help people in their everyday lives, from personal motivation and fitness to paying bills, shopping, booking hotels, paying for flights or making dinner reservations. In most aspects of a person's life, there's an app for that.

Billion Dollar Startups Influence Existing Businesses To Build Apps

Several startups ranging from Instagram, Uber, Lyft and Instacart used iPhone features such as the built-in camera, Apple Pay, GPS and Location Services to provide their customers with personalized, on-demand experiences. Their businesses began as apps in the App Store. Their success and popularity among customers also led to the development of apps from existing web-based businesses such as Facebook, AirBnB and Amazon.

In 2016, there were 83,000 app releases per month. While this number has slowed down, the number of app updates has skyrocketed. By November 2017 with the launch of the new iPhone X, there were 477,000 app updates per month so that apps can remain relevant to users. On average, an app is updated 1.4 times per month. Games, business and utility apps are the most popular apps to make among developers.

Gaming

Since its launch, the App Store has been the most popular marketplace for games, from new games such as Angry Birds to favorites such as Pokémon Go, Pac-Man and Super Mario Run, a new experience based on the popular Super Mario game by Nintendo.

“We are very happy that we are able to deliver Super Mario Run, a new Super Mario experience that could be played with just one hand on iPhone, to hundreds of millions of consumers because of the App Store. The App Store allows us to share the joy of Nintendo games with many new audiences, and we will continue striving to provide unique and new game experiences to App Store customers.”

— Shigeru Miyamoto, Nintendo

The App Store also brought gaming mainstream, largely in part due to the ease of use of Multi-Touch technology on both the iPhone and iPad and being able to play on the go.

“We built our entire team around the App Store, and we’ve been able to have millions of people around the world play our games who never would have considered themselves gamers. The App Store refresh has shown players the creators behind the apps they enjoy everyday. Humanizing apps can only be a good thing and showcasing how they’re made will inspire the next generation of creators from every corner of the world.”

— Dan Gray, head of studio, ustwo Games, creators of Monument Valley

Subscriptions

Subscriptions has offered a way for developers and companies to earn income from apps. Customers are able to first try out the apps with a free version and then pay to unlock different levels of functionality. $1 billion was paid out to developers from IAP and paid apps by June 2010.

Streaming Video and Entertainment on the Go

Watching TV shows, movies and video on the go has been growing worldwide and the App Store has been at the forefront of this, as customers love to watch videos using their iPhones and iPads. Today there are many service providers such as HBO, Netflix, Sling TV and Hulu that provide high quality shows for customers anywhere, anytime.

“When we decided to introduce HBO NOW, there was never a question that our exclusive launch partner had to be Apple. Announcing the streaming service with Apple and the arrival of HBO NOW on the App Store is one of the most significant moments in HBO’s storied history.”

— Richard Plepler, chairman and CEO, HBO

Education

Apps have also unlocked new ways to learn, be productive and to create, especially with the launch of the iPad in 2010. Today there are over 1.3 million apps for the iPad. Apple also launched Swift Playgrounds, an iPad app to teach coding concepts for students of all ages to learn Apple's own coding language, Swift. Apple has also supported learning and education through its own free labs and workshops at Apple Stores with Today at Apple, Everyone Can Code initiatives and through the WWDC annual event.

Health and Fitness Apps

The App Store has also helped advance innovation in health and fitness with medical apps and health monitoring capabilities built into the iPhone such as HealthKit and Apple Watch. This has also inspired customers to be more mindful of their health and to be more active. Over 500 doctors and medical researchers have used Apple’s ResearchKit and CareKit software tools for clinical studies on topics varying from autism and Parkinson’s disease to post-surgical at-home rehabilitation and physical therapy.

“Over the last 10 years, the App Store has contributed to the advancement of innovation in patient care by creating a platform for state-of-the-art medical apps like Corrie at Johns Hopkins. Our mobile health research relies on the App Store to deliver life-saving and life-changing apps to our patients.”

— Francoise A. Marvel, MD, Corrie Health Team, John Hopkins University

What Lies Ahead: Augmented Reality

Augmented Reality (AR) became available to users practically overnight with the launch of iOS 11 in 2017, making the App Store the largest AR platform in the world. AR enables creators to bring virtual experiences into the real world. This is transformative and changes the way customers play and work. ARKit continues to grow and evolve with the latest iteration allowing shared experiences with multiple players for a game or project collaboration.

App usage is also growing into other areas, such as automotive displays and televisions. Apps have made a tremendous contribution to the quality of life for people all over the world, while providing a personalized individual experience. Having apps on an iPhone removes the need for an immediate pen and paper, carrying an additional camera or laptop for messaging and quick email. Apps opened the door to portability and new ways of interacting with people and the environment.

We are excited to create, design and engineer apps for our clients for the iOS ecosystem from iPhones and iPads to Macs, Apple Watches, Apple TV and Car Play. Thanks for reading!