Apple promotes the App Store while iPhone sales are leveling off - here why

Showcases a sprawling economy

A month ago, we heard about dipping iPhone sales. Not Apple has released a study that highlights the worth of the App Store as a potent window for the retail of physical goods, ride-hailing, and advertising. During 2019 the shop spurred business worth $458 billion (roughly Rs.34.8 lakh crore) in sales from which the tech giant made no commission.

The study, shared by Apple from its Newsroom, claims that the App Store has had a good broader impact on the business, generating $519 billion (Rs.39.4 lakh crore approximately) in billings and sales during 2019. Conducted by the economic research company Analysis Group, the study says roughly $413 billion came from physical goods and services like music and video subscriptions also as in-app purchases for games.

Who's making money from App Store?

"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, like physical goods and services, are calculated. Because Apple only receives a commission from billings related to digital goods and services, quite 85% of the $519 billion total accrues solely to third-party developers and businesses of all sizes," the study says.

The study backed by Apple also highlights that the very best value categories were mobile commerce apps, digital goods and services apps, and in-app advertising. The results cause the complete impact of the company's app-based economy which spreads across 175 countries.

It also notes that only $61 billion constitutes digital items from which Apple receives a commission of 30% or 15% just in case of longer subscriptions. Of this, mobile games and in-app purchases make up the most important chunk of roughly $45 billion. From the remainder of the apps, be it ride-hailing or food delivery to retailing of mobile phones or simple eCommerce, Apple charges no cut from the business that generated $413 billion in 2019 alone.

What's prompting this study?

While these figures are generally in sync with what we all know on a quarterly basis from the App Store, this is often the primary time that the corporate has deemed it necessary to supply a breakdown of the numbers. Maybe because Apple wants not just the developers but also the regulators to think about the App Store as a stand-alone economy beyond that of device sales.

It is no secret that the iPhone maker is among large tech companies under a regulatory scanner by the US Administration under the anti-competition laws. The Department of Justice and therefore the Federal Trade Commission have initiated closer scrutiny to determine whether Apple, Amazon, Facebook, Google, and Microsoft wield an excessive amount of power over their ecosystems.

Among the above-named companies, Apple has faced the flak over the 30% cut from apps on its ecosystem, with rivals like Spotify and a few developers who claim that the corporate-run the App Store during a monopolistic fashion. the ECU Union is already probing an antitrust complaint from Spotify against Apple, which is perhaps what prompted some friendly measures like getting Siri to support the music streaming application of the Swedish company.

Apple CEO Tim Cook claims during a prepared statement contained within the report that the App Store was an area for innovators to bring their ideas to life and users to require these trusted tools to reinforce their own experience. He went on to suggest that in an "unsettled time" the App Store provides opportunities for entrepreneurs to foster innovation, create jobs, and propel economic processes.

Just so we remember, the App Store was launched in 2008 and currently holds quite two million apps with over 500 million visits hebdomadally from across 175 countries.

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