According to CNBC’s analysis, Apple’s App Store made $64 billion in revenue in 2020, which is a 28 percent increase from the estimated $50 billion it made in 2019. This represents a good amount of growth for the App Store since the estimated increase between 2018 and 2019 was only 3.1 percent.
It’s hard to tell the exact reason for the spike in growth, but it likely had something to do with the COVID-19 pandemic. I can say from personal experience that I bought quite a few more games in 2020 than I have in years past, as well as subscriptions to fitness and productivity apps to try to regain some control of my life during quarantine.
When Apple reports on its financials, it lumps the money it makes from the App Store in with its services revenue, which is by far its fastest-growing category. The company takes a 30 percent cut of most of the money coming in to the App Store, which, while there are caveats and exceptions, represents billions of dollars of revenue. Apple typically guards its take carefully, despite recent pushback from developers like Hey.com and even legal challenges from Epic.
Its grip has recently loosened just a little, though, as Apple now only takes a 15 percent cut from developers who make under $1 million a year from the App Store. That isn’t likely to have a huge change on the revenue estimates, as analysts have approximated that the top 2 percent of App Store developers generate 95 percent of the revenue.
Every year, Apple reports how much money it has paid out to developers since 2008. CNBC used that to calculate the App Store revenue number by subtracting last year’s number from this year’s, then it accounts for Apple’s 30 percent cut. While the numbers may be a little rough, Apple doesn’t self-report them, so all we can do is get close. Regardless, there are two things that are hard to argue: the App Store’s revenue grew by quite a bit this year, and it brought in a lot of money for both developers and for Apple.