Apple Inc and thousands of mobile software developers are feasting on people’s ravenous appetite for apps.
Users of iPhones, iPads and iPod Touches spent nearly US$500 million on applications and in-app services during the first week of the year, according to figures released on Thursday. That is the highest weekly volume recorded by Apple since the Cupertino, California, company opened its App Store seven years ago and revolutionized the way people connect with online services and play games.
If sales continue at the same opening-week pace, Apple and the makers of the apps would split up about US$25 billion in revenue. Apple’s revenue-sharing formula calls for 70 percent of app sales to be paid to the developers, with the rest kept by the company.
This year’s fast start came after Apple’s app billings last year surged by 50 percent, according to Thursday’s breakdown. The increase produced more than US$10 billion for app developers. That implies Apple reaped somewhere between US$4 billion and US$5 billion in revenue from its App Store last year, based on the company’s 30 percent commission. Apple did not disclose how much it made from the App Store last year.
Most analysts expect the App Store will contribute a bigger piece of Apple’s future profits as people become more dependent on their mobile devices, encouraging developers to create even more services tailored for the gadgets. The latest version of Apple’s mobile software, iOS 8, is already fueling demand with new categories for home and health management, as well as the opportunity to install alternatives to Apple’s built-in keyboard for the first time.
What is more, Apple plans to release a line of smartwatches this spring that is likely to unleash another wave of app purchases.
As popular as it is, Apple’s App Store lags behind Google Inc’s Play Store for Android devices in terms of total downloads, according to analytical firm AppAnnie. That is largely because about 2 billion devices running on Google’s free Android software have been shipped so far. Apple has sold more than 828 million mobile devices since the 2007 release of the iPhone.
However, the smaller number of people using Apple’s devices spends far more money on apps than Android’s larger audience, according to AppAnnie and other analysts. That is because Apple’s products are higher priced and tend to attract more affluent buyers than the Android product line does. With less income to spend, Android users are more apt to focus on the wide range of free apps available for smartphones and tablets.
Google has not released last year’s billing statistics for its Play store. In late June, the company said the Play store had distributed about US$5 billion to developers since opening its own app market in June.
Apple says its app developers have made US$25 billion since 2008.
The company’s store offers more than 1.4 million mobile apps in 155 countries.
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