App Store Sales Top $10 Billion In 2013

Apple on Tuesday announced that its App Store sales last year topped $10 billion, with $1 billion of that total coming in December alone on a record 3 billion downloads. The sales figure includes in-app purchases of things like virtual items in games as well as the upfront cost for any paid apps.

This marks the first time Apple has provided an annual sales number for the App Store. It also said developers, who typically receive 70% of sales, have earned more than $15 billion from the store to date, which is up from $13 billion in October.

The tech giant pointed to hugely popular titles, such as Candy Crush Saga, Puzzles & Dragons, Minecraft and QuizUp for helping driving strong sales in 2013. It also highlighted some surprise hits, including Ellen DeGeneres’ Heads Up, photographer Simon Filip’s Moves, Afterlight and Impossible Road.

“We’d like to thank our customers for making 2013 the best year ever for the App Store,” stated Eddy Cue, senior vice president, Internet software and services at Apple. “The lineup of apps for the holiday season was astonishing, and we look forward to seeing what developers create in 2014.”

The Apple announcement comes as the freemium model for apps, in which games and other apps are free to download, but include features users must pay for, gains increasing traction. The most prominent example of the trend lately has been “Angry Birds” creator Rovio switching from a paid to a free-to-play model for its games.

Among the 10 top-grossing apps in the App Store last year—all games—only Minecraft ($6.99) was a paid app. Angry Birds didn’t make that top 10 list, but is hoping the change in strategy will vault it up the ranks. Either way, the more people spend on apps, the better for Apple, and iOS developers.

However, a recent analysis by app marketing firm Fiksu showed app marketing costs shot up this year, with the cost to acquire a loyal user (one that opens an app three or more times) increasing to $1.62 from $1.30 in 2012. At the same time, the company estimates daily downloads in December reached between 6.6 million and 7.4 million.

The App Store and Google Play alone account for more than 90% of app downloads, and their market dominance isn’t like to change in the near term, according to mobile research firm Yankee Group. It also predicts the number of active mobile app users will grow to 1.6 billion this year from 1.26 billion in 2012, before hitting 2.56 billion in 2017.

Apple said Tuesday it now offers 1 million iPhone/iPod apps in 155 countries, along with 500,000 native iPad apps.

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