Apple's App Store growth is slowing down, latest figure shows

Every January, Apple releases the full magnitude of wealth that App Store developers person earned since 2008, a information constituent that allows analysts and Apple investors to get an thought of however overmuch wealth the App Store makes.

This year's disclosure suggests that Apple's App Store maturation has plateaued.

On Tuesday, Apple said it has paid $320 cardinal to developers, up from $260 billion arsenic of past year, a leap of $60 billion. Developers person betwixt 70% and 85% of gross sales, depending connected if they suffice for Apple's reduced rate.

If each developers paid a 30% chopped to Apple, Apple's App Store grossed much than $85 cardinal successful 2022, based connected a CNBC analysis. If Apple's commissions were each 15%, the App Store's estimated gross would travel successful lower, astir $70 billion.

It's the aforesaid magnitude of income arsenic Apple suggested with its data constituent past year, erstwhile the institution said it had paid developers $60 cardinal successful 2021.

This is simply a unsmooth estimation that could alteration due to the fact that it's unclear however galore developers pay the little 15% cut, versus the 30% cut, and due to the fact that the stats Apple shares are rounded.

Attempts to extrapolate the size of the App Store concern from developer net are inaccurate, Apple said, due to the fact that the committee ranges from 15% to 30%, and the immense bulk of developers wage the little committee nether the App Store Small Business Program that gives a little chopped to app makers who gross nether $1 cardinal per year.

Apple said successful its merchandise that 2022 was a "record" twelvemonth for the App Store, and revealed 900 cardinal subscriptions, up from 745 cardinal subscriptions past year. Apple's stat includes anyone who subscribes to a work done Apple's App store, not conscionable its ain first-party services similar Apple TV+ and Music.

But Tuesday's information constituent underscores that App Store maturation slowed past year, which is important for investors due to the fact that the App Store is simply a large portion of Apple's services business, and is simply a nett motor for the company.

Apple's services concern grew 14% successful fiscal 2022 to $78.1 billion, a 14% increase. But that was a important slowdown from the 27% maturation complaint the part posted successful fiscal 2021.

Apple is dealing with pugnacious comparisons to elevated 2021 and 2020 app usage and income arsenic radical bought games and bundle portion riding retired the Covid pandemic. Apple is besides facing user uncertainty astir the satellite arsenic involvement rates emergence and economists interest astir a imaginable recession.

Morgan Stanley expert Erik Woodring has been pursuing slowing App Store growth. App Store nett gross decreased for six consecutive months from June to November, according to his data, earlier increasing again successful December.

Woodring wrote successful a enactment this period that app income volition turn successful 2023 due to the fact that the year-over-year comparisons volition beryllium easier and arsenic immoderate app terms increases successful planetary markets precocious past twelvemonth volition commencement to payment Apple.

"While App Store maturation remains adjacent its lowest levels successful history, and we admit the planetary user remains challenged, we are encouraged to spot maturation trajectory proceed to amended aft bottoming successful September," Woodring wrote.