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Apple’s New Report Reveals the Massive Economic Impact of the App Store

Apple’s App Store continues to make waves in the tech world, and the company has just released a new report that highlights the economic impact of its iconic marketplace. According to a study conducted by economists at the Analysis Group, the App Store ecosystem generated a staggering $1.1 trillion in total billings and sales in 2022, marking a remarkable 29% increase compared to the previous year’s data.

What sets this study apart is its comprehensive approach. Unlike previous reports that solely focused on purchases made through Apple’s App Store and in-app purchases, this study encompasses the entire App Store economy. It takes into account various app-based transactions, including app-based grocery orders, travel purchases and bookings, revenue from ride-hailing apps like Uber and Lyft, and much more.

The study reveals some intriguing insights into the growth and diversification of the App Store economy. As COVID-19 restrictions eased in many parts of the world, app categories such as travel and ride-hailing experienced a significant rebound in demand. In 2022, travel sales made on iOS apps surged by a remarkable 84%, accompanied by a 45% increase in sales on ride-hailing apps.

Notably, food and grocery sales emerged as some of the fastest-growing categories within the app ecosystem. iOS app-based food delivery and pickup sales more than doubled since 2019, while grocery sales experienced a staggering triple-digit growth rate. Moreover, enterprise apps have gained popularity among companies worldwide in recent years. In 2022, these apps represented one of the fastest-growing categories of digital goods and services, according to the Analysis Group’s estimates. The highest growth rate, however, was observed in the app-based entertainment category, fueled by trends like the creator economy and the rise of apps that support this sector.

Here’s a category breakdown based on the study’s findings:

  • General retail: $621 billion
  • Travel: $102 billion
  • Food delivery and pickup: $77 billion
  • Grocery: $52 billion
  • Ride-hailing: $48 billion
  • Digital payments: $10 billion
  • In-app advertising: $109 billion

To arrive at these figures, the Analysis Group employed three primary app monetization strategies as part of its methodology:

  1. Selling and distributing digital goods and services: This strategy involves selling paid app downloads, in-app purchases, as well as digital content and subscriptions. Gaming, dating, video and music streaming, fitness and health, and news and magazine apps are prime examples of apps utilizing this monetization approach.
  2. Selling physical goods and services through the app: M-commerce apps, including those for ride-hailing, food delivery and pickup, grocery delivery and pickup, general retail, and travel, fall under this category, alongside digital payment apps.
  3. Selling in-app advertising: Social media platforms and short video-sharing apps primarily rely on in-app advertising as their monetization strategy.

Interestingly, the study also considers multiplatform apps like Hulu, taking into account “the proportion of use that occurs on apps in the App Store ecosystem” rather than solely focusing on revenue data. For instance, a subscription purchased through the App Store can be used to access Hulu on other platforms, so attributing the full subscription amount to the App Store ecosystem would be inaccurate. Instead, the Analysis Group factors in the share of hours streamed on various devices and assigns a portion to Apple devices based on their market share.

However, for iOS apps that exclusively sell digital goods and services through the App Store, the study includes total billings, which incorporate Apple’s commission of 15-30%.

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In a press release accompanying the report, Apple’s CEO, Tim Cook, expressed his optimism and admiration for the thriving developer community:

“We’ve never been more hopeful about — or more inspired by — the incredible community of developers around the world,” Cook remarked. “As this report shows, the App Store is a vibrant, innovative marketplace where opportunity thrives, and we’re as committed as ever to investing in developers’ success and the app economy’s future.”

Apple’s App Store continues to serve as a driving force in the digital world, facilitating the growth of diverse app categories and presenting opportunities for developers worldwide. With its latest report, Apple aims to shed light on the impressive economic impact and reaffirm its commitment to supporting the app economy’s sustained success.

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