Apple’s (AAPL) App Store facilitated almost $1.3 trillion in sales and billings in 2024, the company announced Thursday.
The findings, part of a report commissioned by Apple and performed by Analysis Group’s Jessica Burley and Boston University professor Andrey Fradkin, show that App Store sales across both physical and digital goods have exploded over the past five years, climbing from $514 billion in 2019 to $1.29 trillion last year.
Some 78% of sales, $1.01 trillion worth, came from physical goods and services, which include categories like general retail, travel, food delivery, and ride-hailing. Another 10% came from digital goods and services such as in-app purchases for games. The final 12% came from in-app advertising revenue.
The US accounted for the majority of sales and billings related to both in-app purchases and in-app advertising, coming in at $53 billion and $75 billion, respectively. China accounted for the largest market for physical goods and services by far, hitting $484 billion compared to the US’s $277 billion.
“It’s incredible to see so many developers design great apps, build successful businesses, and reach Apple users around the world,” Apple CEO Tim Cook said in a statement.
The study notes that ~10% of the $1.3 trillion was subject to commissions. Apple collects a 30% commission on the sale of digital goods and services purchased through the App Store. Developers that generate up to $1 million in the previous year pay a reduced 15% commission as part of Apple’s Small Business Program.
For subscriptions, the company collects an initial 30% commission, which then drops to 15% for each subsequent year.
Governments worldwide are scrutinizing Apple’s App Store practices. South Korea requires Apple and rival Google to offer alternative in-app payment methods in the country. The European Union and Japan require the companies to give users the ability to access third-party app stores.
In the US, Apple is facing off against “Fortnite” developer Epic Games as part of the duo’s ongoing antitrust suit. At the heart of the matter is whether Epic should be able to circumvent Apple’s in-app payment system, thereby avoiding Apple’s App Store commissions.
Epic initially accused Apple of violating antitrust laws by requiring developers to use the company’s in-app payment systems. Ultimately, US District Judge Yvonne Gonzalez Rogers found that Apple didn’t hold a monopoly over the market for “digital mobile gaming transactions” but did violate California’s antitrust laws via anti-steering provisions in its App Store rules.
As part of the ruling, Apple was supposed to allow developers to offer payment options outside of the App Store. Apple did, however, also collect a 27% commission on those payments.
Last month, Gonzalez Rogers hit back at Apple, saying Cook “chose poorly” in the move, and ordered the company to remove the 27% commission.
The healthy increase in App Store sales over the past five years could help ease some investors’ concerns around Apple’s services business.
Apple currently collects roughly $20 billion per year in fees from Google as part of an agreement that requires Apple to make Google the default search engine for its Safari web browser. But that deal could be on the chopping block as part of Google’s antitrust battle with the Justice Department.
Correction: Apple noted ~10% of the $1.3 trillion in sales was subject to commission. An earlier version of this article incorrectly stated Apple collected 10% of the $1.3 trillion in commissions.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.
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