Every January, Apple issues a press release (conveniently timed for the middle of CES) boasting about revenues developers have made from its App Store. In 2014, it paid out more than $US10 billion to developers — an impressive figure, but one that shouldn’t blind you to the fact that making money from apps remains very challenging.
Here are the key numbers from the announcement:
- In 2014, total revenues for developers from the App Store were more than $10 billion. Apple takes a 30 per cent cut, so that suggest total App Store revenues — covering both apps and in-app purchases — were somewhere around $US14.2 billion. (In 2013, that figure was $US10 billion.)
- In the first week of January 2015, customers spent half-a-billion US dollars on apps and in-app purchases.
- There are now 1.4 million apps on the App Store, including 725,000 that were “made for iPad”.
While those numbers sound impressive, we have to issue our customary warning: the vast majority of apps don’t actually make money. Most apps are given away for free. As well, research suggests that the majority of income from apps on the App Store comes from in-app purchases, not from selling the apps themselves.
Apple didn’t disclose how many free and paid apps were downloaded in 2014, but the figures it does provide still demonstrate how tough it is to actually break through and make money in the app market. If there are 1.4 million apps and a $10 billion pool of money for developers, then the average revenue per app would be around $7142. In reality, the figure will be very different — successful apps will make much more, while most apps won’t make anything.