App Store's December may not have been all that great

AppleInsider

Developers have earned $320 billion from the App Store since its beginning, but an analyst believes revenue from the platform was down year-over-year in December.

App Store estimates

Apple published its annual year-end report on Tuesday, sharing how much money developers have made from the App Store and listed other accomplishments around its Services business.

In the report from UBS seen by AppleInsider, analyst David Vogt believes the report suggests that App Store revenue in December 2022 was likely down 7% to 8%, based on a flat take rate year-over-year. UBS also estimates Apple's blended take rate in the App Store is between 22% and 24%.

While Apple expects Services to grow in the December quarter, UBS believes it will continue to be affected by foreign exchange rates, macroeconomic factors such as inflation, and softness in digital advertising and gaming.

Vogt forecasts revenue from Apple's Services business to be approximately $20 billion, in line with the consensus of $20.3 billion and estimates the App Store accounts for almost 25% of Services.

It's not clear what else Vogt is basing his assumptions on, other than a press release outside of investor's channels, which have historically been vague and imprecise. If Apple is rounding down in the letter -- and it likely is, as it has done so in the past -- this may throw off Vogt's calculations.

Despite a possible December decline in App Store earnings, UBS is maintaining its price target for AAPL at $180. It's based on a 25x earnings-per-share multiple of $6.55 for the calendar year 2024.

Read on AppleInsider

mikethemartian

Apple has about 34 million registered developers so about $9,400 on average per developer over about 14 years so about an average of $672 per developer per year. Of course the calculation would be more accurate if figures for each individual year was used.

thadec

Some of this is no doubt due to national and global economic trends. But that is not the whole story ... we've had economic downturns before.
Instead it is two things (which Apple has seen coming and been working to adapt to in various ways for years).

1. Mobile devices have mostly reached a saturation point. No big shock there. The iPhone was introduced in 2007 and the iPad in 2010. There is still some action to be had in the developing markets, but much of that is going to be inexpensive Android devices. 
2. There hasn't been a "killer app" that everyone talks about and rushes to download in years. Where there used to be several a year, TikTok was the last, and before that Fortnite. Again, this reflects market maturity as most of the ideas have been done. 

Of course Apple isn't "doomed" but just like the boom times for Microsoft that existed when people first started getting onto the Internet in large numbers, Microsoft owned 97% of the client computing market share and there was literally no practical alternative to Office and they were so dominant that Bill Gates literally thought that the PlayStation was its biggest threat (to be fair, pre-iPod and iPhone, Sony was much bigger and more influential than they are now ... bigger than Apple even) are never coming back, the "peak iPhone" thing has long passed and is settling into normalcy.

davidw

thadec said:

Some of this is no doubt due to national and global economic trends. But that is not the whole story ... we've had economic downturns before.
Instead it is two things (which Apple has seen coming and been working to adapt to in various ways for years).

1. Mobile devices have mostly reached a saturation point. No big shock there. The iPhone was introduced in 2007 and the iPad in 2010. There is still some action to be had in the developing markets, but much of that is going to be inexpensive Android devices. 
2. There hasn't been a "killer app" that everyone talks about and rushes to download in years. Where there used to be several a year, TikTok was the last, and before that Fortnite. Again, this reflects market maturity as most of the ideas have been done. 

Of course Apple isn't "doomed" but just like the boom times for Microsoft that existed when people first started getting onto the Internet in large numbers, Microsoft owned 97% of the client computing market share and there was literally no practical alternative to Office and they were so dominant that Bill Gates literally thought that the PlayStation was its biggest threat (to be fair, pre-iPod and iPhone, Sony was much bigger and more influential than they are now ... bigger than Apple even) are never coming back, the "peak iPhone" thing has long passed and is settling into normalcy.

3. Let's not forget the affect of the pandemic. These figures are comparing Y to Y and in 2021, the World was still in the middle of the pandemic. So comparing 2022 Apple App Store quarterly results to the same quarter in 2021 will always show a downturn as paid app downloads (specially entertainment apps) surged because of the pandemic lock down and many were stuck at home. 

https://9to5mac.com/2021/04/01/record-spend-on-apps/

davidw

mikethemartian said:

Apple has about 34 million registered developers so about $9,400 on average per developer over about 14 years so about an average of $672 per developer per year. Of course the calculation would be more accurate if figures for each individual year was used.

There are now, only about 2.5M apps in the Apple App Store and about 95% of them (2.4M) are free. But it would be no where near accurate to say that it takes an "average" of 13.5 registered iOS developers, to develop an app. Including the free ones. Or (because of the free apps) that each app generated an "average" of $128K for the developer(s) over the 14 years of the App Store.

https://www.zippia.com/answers/what-percentage-of-apps-make-money/

What your "average" income per developer calculation (using the 34M number) fail to account for is that companies like Facebook might have thousands of registered iOS developers and their iOS apps are free. But their registered iOS developers are probably being paid 6 figure salaries. And even though the Fortnite app developer is Epic Games, they have way more than 1 registered iOS developer working on it. So even though Epic Games and Facebook are considered just 2 developers for the Apple App Store, Epic Games and Facebook accounts for way more than 2 of the 34M registered iOS developers. And none of their iOS developers are being paid directly from app sales or from IAP.  Which accounts for Apple App Store revenue. 

About the top 1% of the iOS developers that makes money, account for over 94% of Apple App Store revenue in 2016. This haven't changed much over the years.

https://sensortower.com/blog/app-store-one-percent

https://techcrunch.com/2019/11/21/the-top-1-of-app-store-publishers-drive-80-of-new-downloads/

The bottom line is that the vast majority of the 34M registered iOS developers either earn a decent salary developing iOS apps for a company or it's just a hobby. They are not generating any revenue for the Apple App Store by developing and selling their own apps or with IAP. Otherwise, with 34M registered iOS developers, there would be way more than just 2.5M apps in the Apple App Store. For your calculation to be more accurate, these registered iOS developers that are being paid a salary to develop for a company or doing it as a hobby, should not be included in your "average" iOS developer income calculation, using Apple App Store revenue numbers.

https://www.businessofapps.com/app-developers/research/ios-android-developer-salary/

danox

davidw said:

mikethemartian said:

Apple has about 34 million registered developers so about $9,400 on average per developer over about 14 years so about an average of $672 per developer per year. Of course the calculation would be more accurate if figures for each individual year was used.

There are now, only about 2.5M apps in the Apple App Store and about 95% of them (2.4M) are free. But it would be no where near accurate to say that it takes an "average" of 13.5 registered iOS developers, to develop an app. Including the free ones. Or (because of the free apps) that each app generated an "average" of $128K for the developer(s) over the 14 years of the App Store.

https://www.zippia.com/answers/what-percentage-of-apps-make-money/

What your "average" income per developer calculation (using the 34M number) fail to account for is that companies like Facebook might have thousands of registered iOS developers and their iOS apps are free. But their registered iOS developers are probably being paid 6 figure salaries. And even though the Fortnite app developer is Epic Games, they have way more than 1 registered iOS developer working on it. So even though Epic Games and Facebook are considered just 2 developers for the Apple App Store, Epic Games and Facebook accounts for way more than 2 of the 34M registered iOS developers. And none of their iOS developers are being paid directly from app sales or from IAP.  Which accounts for Apple App Store revenue. 

About the top 1% of the iOS developers that makes money, account for over 94% of Apple App Store revenue in 2016. This haven't changed much over the years.

https://sensortower.com/blog/app-store-one-percent

https://techcrunch.com/2019/11/21/the-top-1-of-app-store-publishers-drive-80-of-new-downloads/

The bottom line is that the vast majority of the 34M registered iOS developers either earn a decent salary developing iOS apps for a company or it's just a hobby. They are not generating any revenue for the Apple App Store by developing and selling their own apps or with IAP. Otherwise, with 34M registered iOS developers, there would be way more than just 2.5M apps in the Apple App Store. For your calculation to be more accurate, these registered iOS developers that are being paid a salary to develop for a company or doing it as a hobby, should not be included in your "average" iOS developer income calculation, using Apple App Store revenue numbers.

https://www.businessofapps.com/app-developers/research/ios-android-developer-salary/

You can say the same thing about the real unemployment rate, or the average salary of an American…..

davidw

danox said:

davidw said:

mikethemartian said:

Apple has about 34 million registered developers so about $9,400 on average per developer over about 14 years so about an average of $672 per developer per year. Of course the calculation would be more accurate if figures for each individual year was used.

There are now, only about 2.5M apps in the Apple App Store and about 95% of them (2.4M) are free. But it would be no where near accurate to say that it takes an "average" of 13.5 registered iOS developers, to develop an app. Including the free ones. Or (because of the free apps) that each app generated an "average" of $128K for the developer(s) over the 14 years of the App Store.

https://www.zippia.com/answers/what-percentage-of-apps-make-money/

What your "average" income per developer calculation (using the 34M number) fail to account for is that companies like Facebook might have thousands of registered iOS developers and their iOS apps are free. But their registered iOS developers are probably being paid 6 figure salaries. And even though the Fortnite app developer is Epic Games, they have way more than 1 registered iOS developer working on it. So even though Epic Games and Facebook are considered just 2 developers for the Apple App Store, Epic Games and Facebook accounts for way more than 2 of the 34M registered iOS developers. And none of their iOS developers are being paid directly from app sales or from IAP.  Which accounts for Apple App Store revenue. 

About the top 1% of the iOS developers that makes money, account for over 94% of Apple App Store revenue in 2016. This haven't changed much over the years.

https://sensortower.com/blog/app-store-one-percent

https://techcrunch.com/2019/11/21/the-top-1-of-app-store-publishers-drive-80-of-new-downloads/

The bottom line is that the vast majority of the 34M registered iOS developers either earn a decent salary developing iOS apps for a company or it's just a hobby. They are not generating any revenue for the Apple App Store by developing and selling their own apps or with IAP. Otherwise, with 34M registered iOS developers, there would be way more than just 2.5M apps in the Apple App Store. For your calculation to be more accurate, these registered iOS developers that are being paid a salary to develop for a company or doing it as a hobby, should not be included in your "average" iOS developer income calculation, using Apple App Store revenue numbers.

https://www.businessofapps.com/app-developers/research/ios-android-developer-salary/

You can say the same thing about the real unemployment rate, or the average salary of an American…..

As for the unemployment rate, there is an effort to exclude retired people, students, the disabled, people staying home to take care of children, people not activity seeking work, etc., to make that number more accurate. The unemployment rate in the US do not use every American of working age, in its calculation. The unemployment  number that is cited every quarter might not be "real" but is way more accurate than just using the whole US population and counting how many of them are unemployed, to arrive at the unemployment rate. What makes the unemployment numbers unreal is things like counting the people that are collecting unemployment benefits as unemployed but no longer counts them when they stop collecting. Even if the reason they stopped collecting is because their weeks of collecting unemployment benefits ran out.

The same with "average salary". When calculating the "average salary" of an American, they exclude Americans that are self-employed, retired, unemployed, too young to work and any Americans that do not earn a "salary". Salary is not income. Salary is the wages one earns from working for some one other than yourself. So there too, is an effort to make the numbers more accurate by excluding Americans that do not earn a salary, when calculating Americans average salary. Plus not counting any income that is not considered "salary".

American average income on the other hand, would include a lot more people and involve a lot more money. Pension and SS checks are income. Renting and selling property for a profit, are income. Dividends, interest and capital gains are income. Money made running your own business is income. Lottery winning is income. Along with wages and salary. But the result would be heavily skewed by the  top 1% so to make the number almost useless. To reach a more useful and accurate number, one should exclude the top 1%, so the number applies to the "average" American. (It's why the median income of $69K is more accurate, than the average income of $96K.) When Bezo was CEO of Amazon, he reported tens of millions of dollars as income every year but only reported about $100K as "salary". $100K is about what he was paid in wages by Amazon. He earned no other form of salary compensation. The rest of his tens of millions of dollars of annual income are from long term capital gains, from selling the shares of AMZN he received when Amazon IPOed.

If one wants to calculate the average income of an iOS developer, one need to include more than just what the Apple App Store paid out in revenue to developers. If one wants to calculate the average amount of revenue developers made from Apple App Store revenue numbers, one should only include the iOS developers that are earning (or are trying to earn) income with an app in the Apple App Store.