Commentary

Apple's App Store Has Paid Out $50B To Developers

iOS developers have been paid $50 billion from Apple’s App Store, according to tweets from Apple CEO Tim Cook. July has been a record month in the App store in terms of monthly billing to advertisers (Pokémon Go has obviously contributed more than its fair share to that, with 100 million downloads and earnings of $10 million a day, as reported yesterday).

The company also hit another milestone last week, announcing that it had sold 1 billion iPhones. Apple products are seen as status symbols in growing markets, especially China, and the growing middle class has been driving a lot of product sales for the company. In Western countries, smartphones have reached near-total saturation and strategies revolve around retaining customers and getting them to upgrade their devices.

Apple says that its integrated services (iTunes, Apple Music, Apple Care, and iCloud) will be the size of a Fortune 100 company by next year. Apple Music has taken some time to get going, but it already packs a wallop when competing with Spotify.

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As Apple repositions itself to have less of an emphasis on hardware, the company is also creating incentives for developers to aim for longer engagement spans with consumers (a move that will combat app fatigue and maintain a robust marketplace in the App Store). Apple takes 30% of revenues from developers, but that number will drop to 15% if developers' apps can maintain consumer subscriptions for more than a year.

If this growth continues, and developers take advantage of more extended relationships with consumers, by this time next year the conversation about the App Store will look very different.

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