Apple today trumpeted that gross revenue from its iOS App Store -- which now also includes software for the Apple Watch and Apple TV -- exceeded $20 billion for 2015, implying that sales were up between 40% and 47% year-over-year.
While that growth rate would still be impressive, it would be down from gains in 2014, which a year ago Apple pegged at 50%.
In a now-annual tradition, Apple on Wednesday issued a press release that boasted of select statistics from the App Store, at least partly to continue the drumbeat that the software distribution market it's built is a job-creation machine.
"Our customers ... [spent] over $20 billion on the App Store last year alone," asserted Philip Schiller, Apple's top marketing executive, who was recently given responsibility for the app warehouse.
Apple typically couches its publicly-disclosed numbers with enough wiggle room that it can be difficult to parse its financials. That's the case here, as Jan Dawson, principal analyst at Jackdaw Research, noted today. "We get these occasional milestone announcements at year end and in keynotes, but between those we're left to extrapolate and interpolate based on other sources, including Apple's financial reporting, which has historically provided some direct and indirect guidance on App Store sales," Dawson wrote in a post to his firm's blog.
Dawson's extrapolation and interpolation meant that while ballpark numbers could be generated, their accuracy wasn't guaranteed.
"Six billion dollars is a good estimate for Apple's cut," said Dawson in an email reply to follow-up questions. "[Apple's cut] is 30%, so if you assume $21 billion total gross revenue, that suggests just over $6 billion for Apple in 2015." Assuming $21 billion in revenue, as did Dawson, Apple's piece of the App Store pie would be $6.3 billion.
Dawson used $21 billion because it met Apple's criteria that customers spent "over $20 billion" and because the $6.3 billion of Apple's end indicated developers earned $14.7 billion. (App makers receive 70% of all store revenue.) The $14.7 billion was important in his calculation, since Schiller today also said that total developer pay-outs had "brought in nearly $40 billion for developers since 2008, with over one-third generated in the last year alone."
Last year at this time, Apple said that through the end of 2014 it had handed out checks totaling $25 billion. Dawson's $14.7 billion developer cut, plus the cumulative $25 billion figure from 12 months ago, equaled $39.7 billion, matching Apple's "nearly $40 billion" number.
"Apple's cut is obviously up year-on-year, along with the overall gross revenue and the developer cut of it, and fairly significantly," said Dawson, referring to the bump from 2014's estimate of between $4.3 billion and $4.5 billion in App Store revenue to Apple, and the $14.3 billion to $15 billion in money to developers.
But while 2015's App Store numbers were certainly up -- an increase of at least $1.8 billion for Apple -- over the year prior, the growth rate appeared to have slowed.
In January 2015, Apple flaunted a 50% increase in App Store sales: total billings, not just its cut or developers'. Today, Apple's "over $20 billion," when compared to estimates by Computerworld and Dawson last year of 2014 total revenue between $14.3 billion and $15 billion, put 2015's growth rate at between 40% and 47%.
Apple's $6.3 billion earnings from the App Store may have been real money -- more than its total revenue for all of fiscal 2003 -- but in the context of its current sales, which totaled $183 billion for 2014, it's just a drop in the proverbial bucket at a mere 3.5%.
This story, "Apple's cut of 2015 App Store revenue tops $6B" was originally published by Computerworld.