Apple (AAPL) has revealed that its App Store ecosystem generated $519 billion in billings and sales globally in 2019. Independent economists at Analysis Group found that the highest value categories were mobile commerce apps, digital goods and services apps, and in-app advertising.
And as Apple only receives a commission from the billings associated with digital goods and services, more than 85% of the $519 billion goes to third-party developers and businesses. Indeed, the study reveals that the direct payments made to developers from Apple are only a fraction of the vast total when sales from other sources, such as physical goods and services, are calculated.
“In a challenging and unsettled time, the App Store provides enduring opportunities for entrepreneurship, health and well-being, education, and job creation, helping people adapt quickly to a changing world,” said Tim Cook, Apple’s CEO.
Notably, sales from physical goods and services accounted for the largest share of the total at $413 billion. Within this group, retail was the largest money-maker at $268 billion- which includes digital brick-and-mortar stores like Target and Best Buy, and virtual marketplaces such as Etsy.
Travel apps, including Expedia and United, accounted for $57 billion, while ride-hailing apps like Uber and Lyft, comprised $40 billion in sales. Food delivery apps, including DoorDash and Grubhub, made up $31 billion.
Billings and sales from digital goods and services comprised $61 billion, with games the largest money-maker within this category. Notable games of 2019 included “Mario Kart Tour”, and “Sky: Children of the Light” from indie developer thatgamecompany. In-app advertising sales accounted for $45 billion, and of that, 44% was derived from games.
Shares in Apple have surged 17% year-to-date, and analysts have a bullish Strong Buy consensus on the stock’s outlook. This breaks down into 28 recent buy ratings, vs 4 hold ratings and 1 sell rating. However the average analyst price target of $331 indicates 3% downside potential from current levels. (See Apple stock analysis on TipRanks).
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