Support for this study was provided by Apple.
The conclusions and opinions expressed are exclusively those of the authors.
A Global Perspective on the
Apple App Store Ecosystem
An exploration of small businesses
within the App Store ecosystem
Jonathan Borck, Ph.D.
Juliee Caminade, Ph.D.
Markus von Wartburg, Ph.D.
June 2021
A Global Perspective on the Apple App Store Ecosystem
1
When the App Store launched in 2008, it offered approximately 500 apps for the iPhone
and iPod touch – an impressive number at the time but merely a fraction of what it offers
now. Since then, the App Store has grown to offer millions of apps to one billion App Store
customers worldwide, who have downloaded hundreds of billions of apps over the years.
i
Those apps are at the center of a massive ecosystem. Last year, we estimated that the
App Store ecosystem facilitated more than half a trillion dollars in billings and sales
worldwide in 2019.
ii
The number was even larger in 2020, as the role played by apps grew
during the coronavirus pandemic. As many users reduced their in-person interactions,
they turned to apps to make purchases and to stay connected, entertained, and healthy.
Most businesses, organizations, schools, and universities had to shi at once to digital
technologies, including mobile technologies, which enabled remote work and learning.
As online shopping and food and grocery orders soared, many small businesses had to
start or accelerate their digital transition. This report documents substantial growth in the
App Store ecosystem: We estimate that billings and sales facilitated by the App Store
increased by 24%, from $519 billion in 2019 to $643 billion in 2020. (See Part 1.)
In January 2021, Apple launched the App Store Small Business Program, through which
developers who earned less than $1 million per year on the App Store the prior year qualify
for a reduced commission rate of 15%. Moreover, the App Store ecosystem facilitates the
sales of a broader set of small businesses than those that monetize their apps directly
through the App Store – for example, small developers who sell digital goods and services
that are consumed on apps but purchased outside of the App Store; small developers who
sell in-app advertising; and small businesses (not just developers) that sell physical goods
and services through their own apps or through those of third-party platforms.
In this report, we focus on small businesses and the ways in which the App Store
supports their success. We look at small developers, those with less than $1 million in
earnings and fewer than one million downloads across all their apps in a given year (those
criteria are not the same as those of the Apple Small Business Program). Small developers
represented more than 90% of all developers on the App Store between 2015 and 2020.
Many of them have grown quickly, and some businesses for which iOS apps are central
to their business models have become large enough to become public companies or be
acquired by other companies. In addition, small businesses – even those without their
own apps – have benefied from the App Store ecosystem through digital platforms,
which connect them with consumers around the world through their apps. (See Part 2.)
The App Store aims to facilitate transactions between developers and users, and it
becomes more valuable when developers create new and innovative apps. To encourage
transactions and innovation, the App Store offers developers a global platform to
distribute their apps to one billion App Store customers worldwide, with built-in support
for various local payment methods. In addition, to help developers develop, distribute, and
market their apps, Apple offers a large set of developer tools, resources, and educational
and support programs. Through these tools and the platform it provides, the App Store
opens up meaningful opportunities for small developers. (See Part 3.)
Part 1
How large is the App Store
ecosystem? An update for
2020
Part 2
The success of small
businesses on the App
Store
Part 3
How the App Store
supports the success of
small developers
A Global Perspective on the Apple App Store Ecosystem
2
Part 1: How large is the App Store ecosystem? An update for 2020
Apple reported in 2020 that earnings it paid to developers summed up to about $39
billion worldwide in 2019. Such direct monetization through the App Store occurs through
paid downloads and through in-app purchases of digital content and services, using
Apple’s in-app payment system. However, direct monetization of apps significantly
underestimates the size of the App Store ecosystem. This is because developers can
choose to monetize their apps in different ways, including several that do not involve
transacting directly through the App Store. These other monetization strategies include
selling digital goods and services outside of the App Store that can be used within apps
on Apple devices (employed by, for example, multiplatform apps and reader apps such as
streaming, education, and enterprise apps), selling physical goods and services (employed
by, for example, grocery delivery apps), and offering ad-supported content (employed by,
for example, social networking apps). Therefore, our study focuses on third-party iPhone
and iPad apps, and account for billings generated through direct monetization via the App
Store, and for sales generated through monetization outside of the App Store.
1
We estimate that the App Store ecosystem facilitated $643 billion in billings and sales
worldwide in 2020.
2
$86 billion originated from billings and sales of digital goods and
services (13% of the total), $511 billion from sales of physical goods and services through
apps (80% of the total), and $46 billion from in-app advertising (7% of the total). About
90% of total billings and sales facilitated by the App Store ecosystem in 2020 occurred
outside of the App Store, meaning that Apple collected no commission on those sales.
(See Table 1.)
Table 1: Estimated Billings and Sales Facilitated by the Apple App Store Ecosystem
Worldwide, 2020*
Category
Billings and Sales
($ Billion) Annual Change
Digital Goods and Services** $86 +41%
Physical Goods and Services $511 +24%
In-App Advertising*** $46 +4%
Total $643 +24%
* Totals may not sum due to rounding.
** Estimated billings and sales from digital goods and services are not the same as total App Store billings. Our estimate also
includes the volume of sales from digital goods and services purchased elsewhere but used on apps on Apple devices, and,
conversely, subtracts billings from in-app purchases made via the App Store but used elsewhere. The estimate is based on a
combination of third-party sources and Apple data. See Appendix for methodology.
*** Estimate of all in-app advertising sales for iOS apps.
1 Apps developed by Apple, such as Apple Music, and mobile browser apps, such as Google Chrome, are
excluded from this analysis. Third-party apps featured within Apple TV are included in our analysis of video
streaming.
2 We use the term “billings” to refer specifically to payments generated by paid downloads and in-app purchases,
including subscriptions, that use the Apple in-app payment system, and the term “sales” to refer to money spent
by customers purchasing goods and services in general. We use the term “facilitated” to include the various
ways in which apps contribute to generating billings and sales.
A Global Perspective on the Apple App Store Ecosystem
3
While our analysis captures the major app monetization strategies in 2020, we do not
capture all of the ways in which the App Store ecosystem facilitates sales or all of the
benefits created by apps. A description of our methodology is included in the Appendix.
The App Store ecosystem across app categories and regions
The three largest streams of sales from physical goods and services facilitated by the App
Store ecosystem in 2020 originated from general retail ($383 billion), travel ($38 billion),
and food delivery and pickup ($36 billion), all of which are part of the substantial mobile
commerce (“m-commerce”) category.
Out of total global billings and sales facilitated by the App Store ecosystem in 2020, China
accounted for 47%, the US 27%, and Europe 12%. Compared to 2019, Europe’s fraction of
the global total increased slightly (up from 10%), while those of China and the US stayed
the same. Table 2 provides further country and regional breakdowns by app categories.
Appendix Tables 1 and 2 provide a similar breakdown for select countries in Europe, and
Japan, Korea, and Australia and New Zealand, respectively.
Table 2: Estimated Billings and Sales Facilitated by the Apple App Store Ecosystem by
Region and App Category, 2020*
US China Europe****
Rest of the
World
Total
($ Billion)
Digital Goods and Services** $33 $17 $9 $28 $86
Physical Goods and Services $115 $277 $60 $59 $511
M-Commerce
General Retail $74 $228 $44 $36 $383
Travel $10 $12 $7 $9 $38
Food Delivery and Pickup $10 $17 $4 $5 $36
Ride Hailing $13 $6 $3 $4 $26
Grocery $5 $11 $2 $4 $22
Digital Payment
$3 $3 - - $5
In-App Advertising*** $27 $6 $5 $8 $46
Total $175 $300 $74 $94 $643
* Totals may not sum due to rounding.
** Estimated billings and sales from digital goods and services are not the same as total App Store billings.
*** Estimate of all in-app advertising sales for iOS apps.
**** Europe includes countries in Western, Central, and Eastern Europe (including the UK and the Nordic Region). Russia is included
in the Rest of the World category.
The App Store ecosystem facilitated $643 billion in
billings and sales worldwide in 2020, a 24% increase
compared to 2019.
A Global Perspective on the Apple App Store Ecosystem
4
Comparison with 2019: The impact of the coronavirus pandemic on the App
Store ecosystem
In 2020, billings and sales facilitated by the App Store ecosystem rose by $124 billion, a
24% increase from 2019. However, this aggregate change masks important differences
across categories and geographies. (See Table 3.) The large changes observed this year in
many categories are consistent with our expectations, given the impact of the coronavirus
pandemic.
Compared to 2019, total billings and sales of digital goods and services increased by 41%.
The US and Europe saw the largest increases (+53% and +48%, respectively), followed
by China (+27%). Within digital goods and services, all categories increased globally, with
enterprise, video streaming, education, entertainment, and fitness seeing the largest
increases. Video and music streaming increased more in Europe compared to the US and
China, while education apps increased more in the US and Europe compared to China.
Apps have played a particularly central role during the coronavirus pandemic, as the
virus increased mobile usage.
iii
The pandemic drove an increase in remote work, online
schooling, gym closures, and home-based sources of entertainment such as video
streaming. Each of these, in turn, contributed to the changes observed in the billings
and sales of digital goods and services as most businesses, organizations, schools, and
universities had to shi quickly to digital technologies.
iv
As many people reduced their
in-person interactions with others, they turned to apps to make purchases and to stay
connected, entertained, and healthy.
v
Compared to 2019, the sales of physical goods and services facilitated by the App Store
ecosystem increased by 24%. As expected given the effect of the coronavirus pandemic,
this aggregate figure includes large increases in some categories and large decreases in
others. For example, sales facilitated by the App Store ecosystem in the travel and ride
hailing sectors decreased by more than 30%, as mobility and tourism decreased in most of
the world. Conversely, as online shopping soared and customers turned to online
orders of food and groceries, and as many stores pivoted to a digital format, sales
facilitated by the App Store ecosystem in the general retail, grocery, and food delivery and
pickup categories all increased significantly. Looking at regional trends, general retail
sales within apps increased by nearly 70% in the US and more than 100% in Europe.
Similarly, in-app food delivery and pickup and grocery increased by 30% and nearly 130%
in the US, and by more than 60% and 50% in Europe, respectively. In-app advertising
revenues increased slightly, by 4%.
In 2020, billings and sales of digital goods and
services facilitated by the App Store ecosystem
increased by more than 40%.
A Global Perspective on the Apple App Store Ecosystem
5
Table 3: Changes in Estimated Billings and Sales Facilitated by the Apple App Store
Ecosystem by Region and App Category, 2019 to 2020
US China Europe***
Rest of the
World
Total %
Change
Digital Goods and Services* +53% +27% +48% +37% +41%
Physical Goods and Services +23% +23% +53% +5% +24%
M-Commerce
General Retail +68% +30% +103% +35% +43%
Travel -37% -26% -33% -41% -34%
Food Delivery and Pickup +30% +4% +61% +23% +18%
Ride Hailing -41% -21% -13% -36% -34%
Grocery +128% +54% +53% +16% +56%
Digital Payment
+186% +10% - - +54%
In-App Advertising** +10% -9% -3% +0% +4%
Total % Change +26% +23% +47% +12% +24%
* Estimated billings and sales from digital goods and services are not the same as total App Store billings.
** Estimate of all in-app advertising sales for iOS apps. The source of our estimates for in-app advertising is Omdia. In 2021, Omdia
considerably remodeled their historical estimates and projections based on new data and feedback from industry players. To calculate the
changes in in-app advertising between 2019 and 2020, we rely on Omdia’s revised 2019 figures, rather than the figures that were reported in
our white paper last year.
*** Europe includes countries in Western, Central, and Eastern Europe (including the UK and Nordic Region). Russia is included in the Rest of
the World category.
Throughout 2020, the coronavirus pandemic dramatically affected our daily lives. This
study captures the many ways in which people have had to adjust their everyday activities,
working or studying from home, shopping online, or turning to video streaming and online
fitness during lockdowns, all of which affected the mobile economy and app usage. While
some of these trends may gradually return to pre-pandemic levels, as economies reopen
and in-person social interactions become more prevalent, we expect some of these
changes to persist, as they represent fundamental and possibly permanent shis in the
way individuals, businesses, and organizations use digital tools.
A Global Perspective on the Apple App Store Ecosystem
6
Part 2: The success of small businesses on the App Store
The App Store ecosystem includes businesses of all sizes. Some businesses are large
household names. Others are small, with just a few employees, or one self-employed
individual.
In this section, we focus on small businesses that have achieved substantial success on
the App Store. We consider various measures of success. First, we note that many small
developers (a type of small business) have grown quickly, some to the point that they are
no longer small. Second, we describe how some businesses for which iOS apps are central
to their business models have become large enough to become public companies or to
be acquired by other companies. Third, we discuss how small businesses, even those
without their own apps, have also benefited from digital platforms on the App Store, which
connect those businesses with consumers around the world through their apps.
The growth and success of small developers on the App Store (2015–2020)
The App Store supports hundreds of thousands of small developers. In fact, between 2015
and 2020, more than 90% of all developers on the App Store met our definition of “small.”
(See Definition.) Moreover, the number of small developers has grown, increasing by 40%
between 2015 and 2020.
Small developers have achieved substantial success on the App Store. We show this
through four analyses.
First, the App Store earnings of small developers grew substantially over the time period
we studied. We analyzed the group of developers who were small in 2015.
3
As shown in
Figure 1, the earnings for this group of developers nearly tripled between 2015 and 2020.
3 To limit the effect of a few large-scale successes driving the results, this analysis excludes developers that
earned $10 million or more in any subsequent year.
More than 90% of all developers on the App Store in
2015–2020 were small developers.
Definition
We consider a developer
to be a small developer in
a given year if it had fewer
than 1 million downloads
and less than $1 million in
earnings across all its apps
in that year (those criteria
are not the same as those
of the Apple Small Business
Program). We exclude from
our analyses developers who
never had more than 1,000
annual downloads between
2015 and 2020.
A Global Perspective on the Apple App Store Ecosystem
7
Figure 1: Small Developers in 2015: Growth in App Store Earnings
2015
1.3x
2016 2017
1.5x
2018
1.9x
2019
2.2x
2020
2.8x
Second, many small developers have experienced high download growth. We examined
the set of developers who were small and had at least 1,000 downloads in their first full
year on the App Store.
4
Among this group, more than one in five saw an increase in
downloads of at least 25% annually since their first full year on the App Store. These
developers may monetize their apps in a variety of ways, including several that do not
involve transacting directly through the App Store, or they may have other goals than
monetizing their apps. Download growth is a reasonable proxy for their success.
Third, many small developers who sell digital goods and services on the App Store have
experienced significant growth in App Store earnings. We examined the set of developers
who were small and had earnings of at least $1,000 in their first year on the App Store. We
find that one in four saw an increase in earnings of at least 25% annually since their first
full year on the App Store, and one in eight saw an increase of at least 100%.
Finally, some small developers grew enough to exceed our definition of small. We
identified the set of developers that had more than $1 million in earnings in 2020 and
summed up their App Store earnings in 2015. As shown in Figure 2, only 23% of developers
with at least $1 million in earnings in 2020 already earned more than $1 million in 2015. By
contrast, 42% were active in the App Store but earned less than $1 million in 2015, and 35%
were not active on the App Store in that year.
4 Our analyses of download and earning growth include developers whose apps were first released on the App
Store in 2014 or later.
Makaron (CN, 2018)
Winner of Apple’s 2018
“App of the Year” in the
China App Store, this app
from developer Versa
produces images, videos,
and more. Staff grew 5x
since launching. The
app has accumulated
nearly 8M downloads,
mostly in China, Japan,
and Southeast Asia. In
2 years, the company
valuation nearly tripled,
reaching $150M.
Butterfly iQ (US, 2018)
This app powers a single
whole-bodyultrasound
probe that works with
smartphone and tablet
apps. Within 2 years, the
company doubled its
workforce from 100 to 200.
Loopsie (IT, 2018)
This app transforms
photos into 3D images.
Founded by 3 university
friends, it now has 5
full-time employees. In
3 years, earnings grew
from $16K to $2M+.
Examples of apps that
have experienced
significant growth in
downloads and earnings
A Global Perspective on the Apple App Store Ecosystem
8
Figure 2: Where Were 2020’s Large Developers in 2015? (Earnings)
23% 18% 8% 16% 35%
Above $1M $100K to $1M $10K to $100K Below $10K No App in App Store
While our focus is on the growth of small developers, it is important to remember that
many small developers on the App Store who do not achieve the growth thresholds we
describe above still enjoy substantial and continued success. Apps from developers that
have experienced sustained success include:
Streaks (Australia, 2015) – This to-do list app to form good habits from
Crunchy Bagel won the Apple Design Award in 2016. The team of two built a
business that grew steadily over the past six years.
Cone (India, 2017) – Kushagra Agarwal created Cone, his first app, so he
could identify colors in daily life, before releasing it to the public. He later
created a filtering app to help the colorblind and a meditation app.
Aerlight (US, 2017) – This photo editor app began as the joint project
of two brothers. Its earnings have grown steadily and the app is now
supported by a team of six. The app has over 500,000 monthly users.
Notable successes: Going public or being acquired
A number of businesses for which iOS apps are central to their business models have
achieved other milestones of success: an IPO, in which shares of the private company
are offered to the public, oen aer substantial growth and with great fanfare; or an
acquisition, in which businesses are purchased by other companies that saw value in the
acquisition.
More than 75 businesses in the US and Europe for
which iOS apps are central to their business models
went public or were acquired since 2011.
“[The IPO]’s going to
allow us to accelerate
our growth into more
markets and scale our
mission…To realize that
kind of change, you have
to reach a lot of people,
and the App Store has
enabled us to do that.”
– Bumble
A Global Perspective on the Apple App Store Ecosystem
9
This group of publicly offered or acquired businesses includes the creators of a variety of
businesses, including:
˿ Snapchat, the social media app, which went public in 2017 at a $33 billion valuation
˿ Stitcher, the podcasting app, which was acquired in 2020 for $325 million
˿ Unity, the developer of a platform that allows developers to build mobile gaming
apps, which went public in 2020 at a $13.7 billion valuation
˿ Bumble, a dating app, which went public in 2021 at an $8.2 billion valuation
This group also includes companies with a diversity of business models and monetization
strategies, including:
˿ MyFitnessPal, a nutrition and exercise app, which monetizes via in-app advertising
(adding paid subscriptions aer it was acquired)
˿ Rovio, the developer of gaming app Angry Birds, which monetizes via both in-app
purchases and in-app advertising
˿ Deliveroo, a food delivery startup, which collects a commission on transactions for
physical goods and services
Using publicly available information, we identified a set of businesses in the US and
Europe for which iOS apps are central to their business models that have gone public or
been acquired since 2011. (See sidebar.)
IPOs: We identified 40 businesses in the US and Europe for which iOS apps are central
to their business models that went public since 2011. These companies had an aggregate
market valuation of more than $450 billion at the time of their IPOs. As shown in Table 4,
this group includes companies in categories such as gaming, social networks, and food
delivery and pickup.
Table 4: IPOs by Companies for Which iOS Apps Are Central to Their Business Models, US
and Europe
Category Number of IPOs
Aggregate Valuation at IPO
($ Billion)
US Europe Total
Games 3 8 11 $46
Social Network 7 0 7 $175
Food Delivery and Pickup 3 3 6 $66
Other 3 2 5 $38
App Developer Tools 4 1 5 $20
Ride Hailing 2 0 2 $106
Digital Marketplace 1 1 2 $7
Digital Payments 2 0 2 $1
Total 25 15 40 $459
Methodology
We obtained IPO and
acquisition data from
Crunchbase. We examined
IPOs and acquisitions
in relevant categories
between January 2011
and March 2021 for
which the business
headquarters were in the
US or Europe. For IPOs,
we focused on companies
listed on prominent
stock exchanges. For
acquisitions, we focused
on companies that were
acquired for more than
$250 million.
For each company
examined, we assessed
whether iOS apps
were central to its
business model at the
time it went public or
was acquired based
on contemporaneous
business documents and
media coverage. We looked
in particular for sources
that addressed whether
a substantial portion of
the company’s business
was tied to the App Store
at the time of the IPO or
acquisition.
See Appendix Tables 3 and
4 for the full list of the IPOs
and acquisitions included
in our analysis.
A Global Perspective on the Apple App Store Ecosystem
10
Acquisitions: We also identified 39 businesses in the US and Europe for which iOS apps
are central to their business models that were acquired since 2011. As shown in Table 5,
these companies were purchased for a total of more than $45 billion.
Table 5: Acquisitions of Companies for Which iOS Apps Are Central to
Their Business Models, US and Europe
Category Number of Acquisitions
Aggregate Price at Acquisition
($ Billion)
US Europe Total
Games 4 6 10 $8.6
App Developer Tools 6 2 8 $4.5
Other 4 2 6 $4.7
Enterprise 6 0 6 $4.3
Food Delivery and Pickup 3 0 3 $1.0
Social Network 2 0 2 $20.0
Utilities 2 0 2 $1.7
Retail 1 1 2 $1.0
Total 28 11 39 $45.8
Our analyses are conservative because they do not include many companies for which iOS
apps maer for their success but that also derive a substantial portion of their business
from channels and platforms outside of the App Store. For example, our lists do not
include:
˿ Airbnb, which went public in 2020 at a $47 billion valuation, and whose iOS app had
been downloaded 121 million times at the time of its IPO
˿ Trulia, which was acquired in 2014 for $3.5 billion, and whose iOS app had been
downloaded 12 million times at the time of its acquisition
˿ Etsy, which went public in 2015 at a $1.8 billion valuation, and whose iOS app had
been downloaded 20 million times at the time of its IPO
˿ Yelp, which went public in 2012 at an $898 million valuation, and whose iOS app had
been downloaded eight million times at the time of its IPO
vi
While our quantitative review focused on the US and Europe, IPOs and acquisitions of
companies for which iOS apps are central to their business models have taken place
across the world. (See sidebar for examples.)
MyFitnessPal (US)
Fitness
Acquired in 2015
for $475M
In-app advertising
NetMarble (KR)
Mobile games
IPO in 2017 at $11B
valuation
Digital goods and
services, in-app
advertising
MedPhone (BR)
Health care
Acquired in 2020
for $1.2M
Digital goods
and services
Examples of IPOs
and acquisitions of
companies for which
iOS apps are central to
their business models
Peak Games (TR)
Mobile games
Acquired in 2020
for $1.85B
Digital goods and
services, in-app
advertising
Bumble (US)
Online dating
IPO in 2021 at
$8.2B valuation
Digital goods and
services
Deliveroo (UK)
Food delivery
IPO in 2021 at
$10.5B valuation
Physical goods
and services
A Global Perspective on the Apple App Store Ecosystem
11
Digital platforms, apps, and small businesses
Small businesses can benefit from the App Store ecosystem even when they do not have
their own apps. In particular, with the growth of digital platforms worldwide, the apps
of many online marketplaces and other platforms have become central to connecting
millions of small businesses and entrepreneurs throughout the world with tens of millions
of consumers. Through digital platforms and their apps, small businesses can build an
online presence and can access digital tools that would be otherwise unavailable.
These platforms have developed in many different sectors, including:
˿ General retail, with marketplaces such as Taobao, eBay, Etsy, and Mercado Libre
˿ Travel, with Airbnb and VRBO, all of which connect hosts and guests worldwide
˿ Food delivery and pickup, with apps such as DoorDash, Deliveroo, Uber Eats, Grab,
and Meituan Waimai, which have allowed millions of restaurants to offer online
pickup and delivery options
˿ Grocery delivery, with apps such as Instacart and Cornershop
Hundreds of billions of dollars in sales are facilitated by the App Store ecosystem, much of
which happens through large digital platforms.
Table 6: Select List of Large Digital Platforms
Category Digital Platform Origin Country Estimated Number of Businesses*
Monthly Active
Users (Million)**
General Retail
Taobao China 10 million active storefronts 441.8
Amazon US 1.6 million active sellers worldwide 293.3
eBay US 20 million active sellers worldwide 113.9
Mercado Libre Argentina 12 million active sellers 99.9
Etsy US 4.4 million sellers 15.9
Travel
Airbnb US 4 million hosts 38.2
VRBO US 2 million homes 3.0
Food Delivery
and Pickup
Grab Singapore 2 million merchant partners 79.3
UberEats US 600,000+ restaurants 69.8
Meituan Waimai China 6.8 million restaurants 61.4
Doordash US 390,000 merchants in US, CA, and AU 22.3
Grubhub US 265,000 partner restaurants in US 10.2
Deliveroo UK 115,000 restaurants and grocers 7.3
Grocery
Instacart US 300 retailers, 3,000+ independent grocers 6.4
Cornershop Chile/Mexico 1,000+ stores in Latin America 1.6
* Sources: company documents or website, market research.
** Sources: App Annie and iiMedia. Includes all mobile users.
A Global Perspective on the Apple App Store Ecosystem
12
Digital platforms have also emerged in many other industries. Examples abound:
ClassPass in the fitness space, Getaround for car sharing, Rover for dog walking, Care for
child care and other services, Thumbtack for home services, Insight Timer for meditation
classes, and Talk Space for mental health consultations.
Digital platforms can also connect specialized audiences, such as the Danish app Too
Good to Go for reducing the food waste of restaurants and grocery stores, the French
app Ollca for online orders at local shops, and the US-based EatOkra and Oya for locating
Black-owned restaurants and women-owned businesses, respectively.
As the coronavirus pandemic swept through the world in early 2020, businesses and
entrepreneurs had to adjust quickly. Many were able to offer alternative ways to reach
customers through platform apps. For example, many restaurants and small shops in
Europe turned to platforms such as Deliveroo, Ollca, and Cajoo, allowing them to pivot to
mobile distribution strategies in a short amount of time.
Platforms have been central to connecting millions
of small businesses worldwide with tens of millions
of consumers through their apps.
A Global Perspective on the Apple App Store Ecosystem
13
Part 3: How the App Store supports the growth
of small developers
The App Store connects hundreds of thousands of small developers with one billion
App Store customers who are interested in their apps throughout the world. Like other
two-sided platforms, the App Store aims to facilitate transactions between developers and
users. The ecosystem becomes more valuable when developers create new, diverse, and
innovative apps, even when those apps are not directly monetized on the App Store. To
encourage transactions between users and developers, the App Store offers developers a
global platform to distribute their apps to one billion customers worldwide, with support
for various local payment methods. Additionally, to help developers develop and market
new apps, regardless of their business models, Apple offers a large set of tools and
resources, as well as educational programs and support.
Access to local storefronts around the world
The App Store is a global marketplace visited by more than half a billion people each
week through local storefronts in 175 countries, including 20 new storefronts in Europe,
Asia, Africa, and Oceania that opened in 2020.
vii
This global distribution platform allows
developers – including small developers with limited resources – to offer and seamlessly
distribute their apps (and app updates) to customers around the world. In addition, the
App Store assists developers in monetizing their apps globally, including with:
˿ Localized price tiers that are adjusted to each market or region and updated for
changes in taxes and foreign exchange rates
˿ Payment processing, to make it easy for users around the world to pay for apps and
make in-app purchases with local payment methods, including backup payment
methods and a billing grace period for digital subscriptions to prevent payment and
service interruptions and to help developers avoid losing customers
˿ Tax administration, to make it easier for developers to comply with local laws
The App Store’s curated local storefronts support many languages, almost 200 local
payment methods, and 45 local currencies, and help customers search and discover
relevant apps.
The App Store’s global distribution platform can offer small developers unique
opportunities to grow and expand their businesses; indeed, the large majority of small
developers take advantage and transact globally. In 2020, about 40% of all downloads of
Tangerine (EE/PT, 2020)
Created by 2 part-time
developers, this self-care
app was “App of the
Day” in 100+ countries.
The app has almost 6K
daily active users and is
expected to double its
earnings in 2021.
KidloLand (IN, 2012)
This award-winning
learning app with 6M+
downloads worldwide
provides learning
resources for young
children. Having started
with 5 employees and 3
songs, it now employs
40 people and offers 3K+
songs, games, and stories.
Examples of apps with
global reach
Chani (US, 2020)
This app combines
astrology, meditation,
and mindfulness. In
only 5 months, its
team grew from 4 to 15
employees, and had over
520K+ downloads in the
US, Canada, Europe,
Australia, and another
40+ countries.
About 40% of all downloads of apps from small
developers came from users outside of the
developers’ home countries.
A Global Perspective on the Apple App Store Ecosystem
14
apps from small developers came from users outside of the developers’ home countries.
Nearly 80% of small developers are active in multiple storefronts, and, on average,
developers that monetize their apps on the App Store on multiple storefronts have
earnings from users in more than 40 storefronts. There is a positive relationship between
the size of a small developer and the number of storefronts in which it is active, indicating
that for many small developers, global expansion provides an opportunity to grow their
businesses.
While some small developers take advantage of the App Store’s global distribution, others
choose to offer apps with a local or regional focus, and are primarily distributed in a few
countries. (See sidebars on pp. 13-14 for examples of both types.)
Access to payment methods
The App Store offers users the ability to pay for apps and make in-app purchases using
most credit and debit cards, and in certain countries or regions, Apple Pay and store
credit (from redeeming gi cards or adding funds to their Apple IDs). Apple also supports
other third-party payment methods (alternative payment methods) in 69 storefronts, and
continues to add support for new payment methods globally. Since 2015, 54 storefronts
have added such alternative payment methods. Of those storefronts, 48 added carrier
billing, whereby users can charge App Store purchases to their mobile phone carrier bills.
In total, the App Store now offers carrier billing for more than 100 mobile carriers around
the world.
The wide range of supported payment methods – coupled with the App Store’s assistance
with tax administration and remiance, local currency conversions, and monitoring of
fraudulent transactions – benefit developers who aim to monetize their apps globally but
may lack the resources and infrastructure to do so. Without the App Store’s integration
of these alternative payment methods, it would have been particularly difficult (or
prohibitive) for small developers to contract with numerous mobile carriers around the
world, or arrange for users to pay using popular alternative payment methods and digital
wallets such as TrueMoney in Thailand, KakaoPay in South Korea, and Alipay in China.
App Store billings from alternative payment methods are substantial and important for
developers seeking to reach a growing mass of global users. A share of these billings is
incremental, that is, they come from users who have not purchased anything from the
App Store in the past 12 months (“new-to-paid” or “reactivated”). In the last six years,
YAMAP (JP, 2013)
This Japanese app
for outdoor activities
provides information
about routes and trails
in Japan, especially for
mountain hikers. The app
is available in Japanese
and English, and 99% of
users are from Japan.
Example of local app
In the last six years, new payment methods (other
than credit and debit cards) have brought more than
60 million new-to-paid or reactivated customers in
their first year alone.
Developer quotes
“The App Store makes it
easy to launch the app
in different locations and
in different currencies
[…] It’s been a big help to
not have to worry about
different currencies
or different payment
methods.” – flowkey
"As a small company, we
didn’t have the resources
to go international by
ourselves, but Apple gave
us the tools we needed
for expansion. For
example, we would have
never guessed we would
be in Turkey, but the App
Store analytics gave us
a really clear sign that
we needed to go there —
and now people love us
there." – Makaron
A Global Perspective on the Apple App Store Ecosystem
15
new payment methods (other than credit and debit cards) have brought more than 60
million new-to-paid or reactivated customers in their first year of launch alone. This
improved ability for developers to monetize their apps globally benefits small developers
in particular because it would have been prohibitive for them to negotiate payment
agreements around the world in the absence of the App Store’s built-in payment support.
The addition of new customers and the improved monetization increase the value of the
App Store ecosystem to the benefit of users and developers.
Apple provides tools and technologies to help developers create and manage
apps and games
Apple continuously invests in ways to make it easier for developers to create and manage
new and innovative apps. For instance, Apple provides tools that are either free or
included in the Apple Developer Program membership for all developers so that they can
create, develop, test, publish, and upgrade apps.
˿ Apple provides an Integrated Development Platform – Xcode – for developers to
design, code, test, and debug apps. Apple continuously updates the platform.
˿ In 2014, Apple introduced Swi, a programming language designed to make it easier
for developers to create apps.
˿ Xcode includes all the technologies necessary for developers to add different
functionalities to their apps. These building blocks for apps (called soware
development kits, or SDKs, and application programming interfaces, or APIs) let
developers add new functionalities to their apps, oen with a simple click and drag.
Apple offers over 250,000 APIs, and, as Figure 6 illustrates, it has released new SDKs
every year since 2008, adding up to more than 40.
˿ Apple provides tools to easily test, debug, and publish apps. For example, since
2014, TestFlight allows developers to invite users to test initial versions of their apps.
˿ Apple also provides design guidelines and resources, including templates for
all necessary in-app components, to make it easier and less time-intensive for
developers to design apps.
These tools and technologies make it easier to create apps and games, and they make it
possible for anyone to try developing apps.
Apple’s tools and technologies make it easier to
create apps and games, and make it possible for
anyone to try developing them.
A Global Perspective on the Apple App Store Ecosystem
16
Apple also supports developers aer their app launch, with tools such as crash reporting,
performance metrics, phased rollouts, and ratings and reviews, allowing developers to
measure the performance of their apps.
Figure 3: Availability of Select Apple SDKs
2021 2020201920182017201620152014201320122010 201120092008
1. UIKit
2. Reachability
3. CoreLocation
4. GameKit
5. MapKit
6. StoreKit
7. EventKit
8. GLKit
9. PassKit
10. iMessage
11. SceneKit
12. iBeacon
13. SpriteKit
14. TextKit
15. PhotoKit
16. CloudKit
17. HealthKit
18. Apple Pay
19. HomeKit
20. CarPlay
21. WebKit
22. WatchKit
23. ResearchKit
24. ClockKit
25. MetalKit
26. CareKit
27. CallKit
28. Apple Speech
29. SiriKit
30. PushKit
31. ReplayKit
32. Core ML
33. ARKit
34. PDFKit
35. ClassKit
36. CreateML
37. PencilKit
38. RealityKit
39. MetricKit
40. VisionKit
41. WidgetKit
Apple SDKs offer certain advantages to developers over creating their own tools, or using
alternative third-party solutions:
˿ As opposed to coding functionalities themselves, using SDKs allows developers to
cut costs and reduce the technical skills needed to release an app. For example,
the developers of the Japanese hiking app YamaReco explained that they used
“SpriteKit on watchOS to draw trail maps” so they did not have to create a
“completely new library from scratch.”
˿ Compared to alternative third-party solutions, Apple SDKs automatically benefit
from system updates and bug fixes. This prevents developers from having to
deal with performance issues related to outdated third-party SDKs, such as apps
crashing or storing data improperly.
xii
Additionally, because these SDKs have been
developed by Apple, developers can trust that they are safe and free of malware, and
will protect users’ privacy.
Developers are indeed choosing to use these tools. For example, within the set of SDKs
tracked by App Annie, more than 75% of installed location and payment SDKs were
developed by Apple.
Some of Apple’s SDKs, such as MapKit, SiriKit, and CoreML, are used by a large number
of developers to add functionalities that can improve their apps. Many of them can be
integrated into an app in a single package. This allows developers to build apps in a flexible
Did you know?
Developing apps has
become significantly
cheaper over the last
decade.
viii
The limited number
of Apple devices and
operating systems
minimizes fragmentation,
making it easier and
less costly to develop
apps, since they need to
be designed for a small
number of devices and
operating system versions.
ix
Apple makes it easy for
developers to port their
iPhone and iPad apps
to other Apple devices,
such as Macs, Apple TVs,
and Apple Watches. For
instance, Xcode allows
developers to convert
iOS apps into Mac apps,
sometimes simply by
clicking a checkbox.
Some developers have
found that developing apps
on iOS takes approximately
30% less time than in
other platforms, such as
Android.
x
Studies have shown that
some third-party SDKs
are unsafe and exhibit
poor privacy practices,
such as exploiting the
app’s permissions, leaking
private information, and
tracking users.
xi
A Global Perspective on the Apple App Store Ecosystem
17
way, providing certain functionalities from the start while leing them add more services,
such as support for Siri, later on.
Other SDKs developed by Apple have allowed developers to build and create new apps
in entirely new product spaces. For example, HealthKit, released in 2014, allows more
than 6,000 approved apps to securely collect and manage health and fitness data,
while ensuring user data privacy. HealthKit allows developers to not have to build their
own health tracking system, which, as the developers of the exercise app Wakeout!
stated “would have been just another weight on our shoulders.” Since 2018, ClassKit
has allowed educators to manage student data, assign problems in different apps, and
track students’ progress. Developers have installed ClassKit more than 71,000 times. The
release of ARKit in 2016 has allowed developers to create new apps or improve existing
ones by adding augmented reality-based functionalities. This tool has become crucial for
many developers, such as those of the home design app Primer: AR Home Design, who
explained that “our app and our business would not exist without it. We don’t just use
ARKit … ARKit is the entire app.”
Many widely successful apps rely on the environment and tools that Apple provides.
Some of these rely on an extensive set of Apple SDKs, while others use particular tools to
provide key new functionalities for their apps.
Examples of successful apps relying on Apple SDKs
YamaReco (Japan, 2016) – Launched with two employees and two part-time
workers, this app helps hikers and mountain climbers check their route and
location, even without phone signal. It has nearly 300,000 downloads.
Wakeout! (Guatemala, 2017) – This app uses HealthKit to provide brief
workouts to users. It started with 80 exercises in 2017 and now offers 1,500.
In 2020, its users accomplished more than 1.6 million exercises.
Learn Math Facts (US, 2019) – This app, which has over 100,000 downloads
and is available in 10 languages, uses ClassKit, CoreML, and PencilKit to
help children learn math through quizzes.
Primer: AR Home Design (US, 2020) – This app uses ARKit to let users
visualize how different paints, wallpapers, and tiles would look in their
own spaces. In the first year, the team grew from three to eight, and over
500,000 users visualized a virtual swatch from over 5,000 AR products.
A Global Perspective on the Apple App Store Ecosystem
18
Initiatives to strengthen and grow the iOS community
Another way Apple invests in making it easier for developers to create and manage new
and innovative apps is by providing different educational and mentorship programs
around the world. Through those initiatives, Apple provides support for small developers,
entrepreneurs, and others interested in learning more about developing iOS apps, in
order to strengthen and grow the iOS developer community. We group Apple’s education
support into three broad categories, depending on when these initiatives impact the life
cycle of a developer: early support, education support, and entrepreneur support.
˿ Early support initiatives target those new to coding, and can function as an entry
point to iOS, and eventually the App Store, by connecting novice developers to the
broader iOS space.
- Coding education programs such as Everyone Can Code, Develop in Swi,
and the app Swi Playgrounds provide learners of all ages and levels, as well as
educators, with tools to learn to code in Swi.
- The WWDC Scholarship provides an opportunity for students in STEM programs
to aend the Apple Worldwide Developers Conference.
- The Student Mobile App Contest seeks to introduce college students in China
to the tools needed to launch new apps.
˿ Education support initiatives offer a comprehensive array of training modules on
topics such as coding, marketing and presenting, and navigating the app economy.
- The Developer Academy is one of Apple’s largest education initiatives to date.
Launched in 2013, the program is now active in Brazil, Indonesia, Italy, and
France, and will soon be in Korea.
5
As part of its new Racial Equity and Justice
Initiative, Apple selected Detroit for the first US academy, starting in 2021.
Students can enroll in either a 30-day program or a 10 to 12-month course.
- Apple-supported certifications, such as the App Development with Swi
certification, recognize advanced proficiency in Swi, Xcode, and other
important tools for iOS developers.
xiii
˿ Entrepreneur support initiatives include camps, labs, and workshops, to help
startups and developers in the App Store ecosystem launch or scale apps, learn
about new tools, and take advantage of expert mentorship.
- Apple Entrepreneur Camp targets underrepresented entrepreneurs with new
or existing apps. Currently focused on women-owned businesses and Black
founders and developers.
5 Brazil has 10 academies and three foundation programs; Indonesia has three academies and three foundation
programs; Italy has one academy and seven foundation programs; and France has four foundation programs.
Coding education
programs in numbers
1.9M students and
educators reached in 2020
9K institutions using Apple
curriculum
27 countries
15 languages
Thousands of WWDC
scholarships
1K teams from over 300
universities across China
registered for the Mobile
App Contest initiative in
2020
Apple Entrepreneur
Camp in numbers
2019: 100 participants,
13 countries, 42 women
companies
2021: first cohort of 13 Black
founders and developers
and their teams
Developer Academy in
numbers
Over 10K graduates
51 nationalities
6x more women in 7 years
431 WWDC Scholars
Over 1.5K apps
Over 160 startups
1K students/year to enroll
in the US
A Global Perspective on the Apple App Store Ecosystem
19
- App Accelerators in China (Shanghai) and India (Bengaluru) introduce
developers to the tools needed to launch apps across multiple Apple platforms
through labs and mentorships from Apple experts.
- Developer Workshops support entrepreneurs, small businesses, and developers
in general, with group and one-on-one sessions with Apple experts on specific
topics to help them improve their apps. Participants can learn about new
technologies, such as CoreML, App Clips, Widgets, and watchOS, as well
as business features, such as subscriptions and family sharing for in-app
purchases. Apple organizes these workshops around the world. For example, the
company joined France’s new Station F campus with a “mentorship office” for
entrepreneurs, where participants can readily access expert advice.
xiv
Another
example is in Japan, where Apple has multiple workshops, including one-on-one
sessions, to introduce developers to the subscription business model.
Many alumni from these initiatives have taken advantage of Apple’s support and used
Apple’s developer tools to successfully launch apps on the App Store, to create startups
that have expanded beyond the small business threshold, and to develop apps that have
been downloaded globally.
Alumni Highlights
flowkey (Germany, 2015) – Available in 12 languages, this app from an Apple
developer workshop participant helps users of all levels to learn and prac-
tice piano. Created by three friends, it now employs over 50 people. The app
has three million users and over 100,000 paying subscribers.
Rogervoice (France, 2015) – This app from a Station F participant provides
real-time transcription for phone conversations. Since launching, 50,000
users have called 290,000 contacts and spent four million minutes in calls.
The number of employees has increased from 10 to 50.
Lake (Slovenia, 2017) – This coloring app, downloaded eight million times,
features designs from artists worldwide, who participate in a revenue-
sharing model. Lake was part of the 2019 Entrepreneur Camp and WWDC
since launching. Employees almost doubled in the last three years.
Vectornator (Germany, 2017) – This graphic design app, created by a WWDC
Swi Student Challenge winner, now employs a team of 40, including four
WWDC Scholarship winners. In three years, it reached 30,000 ratings, about
400,000 monthly active users, and over four million downloads.
Noted. (UK, 2018) – This app from an Apple developer workshop participant
is a recording and note-taking tool. Each month, over 70,000 active users, of
whom about 1,000 are visually impaired, record 60,000 Apple Watch notes,
and take more than 35,000 notes. In two years, the app earned over $500,000.
Developer quotes
“Apple Entrepreneur
Camp was tremendous
– it reshaped the app,
the product and the
business and gave us
quite a substantial
push.” – Lake
“So I basically kicked off
then and went on as a
hobby project to...WWDC,
and from there we
founded the company.
I brought over some
people I met at WWDC,
which was pretty cool,
and took it from there. It
got some traction and
the company grew.”
– Vectornator
A Global Perspective on the Apple App Store Ecosystem
A1
Appendix
Appendix Table 1: Estimated Billings and Sales Facilitated by the Apple App Store
Ecosystem for Select European Countries and by App Categories, 2020*
UK Germany France Italy Spain
Digital Goods and Services** $2.6 $1.5 $1.1 $0.5 $0.3
Physical Goods and Services $26.4 $9.3 $6.3 $2.0 $2.1
M-Commerce
General Retail $20.2 $6.8 $4.7 $1.4 $1.5
Travel $2.0 $1.6 $0.7 $0.4 $0.4
Food Delivery and Pickup $1.9 $0.5 $0.4 $0.1 $0.1
Ride Hailing $1.3 $0.2 $0.3 $0.0 $0.1
Grocery $1.0 $0.2 $0.2 $0.0 $0.1
In-App Advertising*** $2.4 $0.4 $0.6 $0.4 $0.3
Total $31.4 $11.2 $7.9 $2.9 $2.7
* Totals may not sum due to rounding.
** Estimated billings and sales from digital goods and services are not the same as total App Store billings.
*** Estimate of all in-app advertising sales for iOS apps.
Appendix Table 2: Estimated Billings and Sales Facilitated by the Apple App Store
Ecosystem for Select Countries and Regions and by App Categories, 2020*
Japan**** Korea
Australia and
New Zealand
Digital Goods and Services** $14.4 $1.5 $1.5
Physical Goods and Services $16.4 $13.1 $5.4
M-Commerce
General Retail $10.6 $10.6 $2.4
Travel $2.3 $1.0 $1.0
Food Delivery and Pickup $1.2 $0.4 $0.8
Ride Hailing $0.5 $0.3 $0.7
Grocery $1.8 $0.8 $0.5
In-App Advertising*** $3.8 $0.4 $0.8
Total $34.6 $14.9 $7.7
* Totals may not sum due to rounding.
** Estimated billings and sales from digital goods and services are not the same as total App Store billings.
*** Estimate of all in-app advertising sales for iOS apps.
**** In estimating the portion of mobile sales that occurred in apps compared to mobile web browsers, we rely on estimates from
J.P. Morgan’s E-commerce Payments Trends Report. J.P. Morgan’s estimate for the share of in-app sales in Japan decreased
markedly between 2019 and 2020, reflecting changes in consumer m-commerce habits as Japan’s m-commerce grows and
matures. During this transition, a certain level of fluctuation in estimates are to be expected.
A Global Perspective on the Apple App Store Ecosystem
A2
Appendix Table 3: IPOs by Companies for Which iOS Apps Are Central to Their Business
Models, US and Europe
Games Social Network Food Delivery and Pickup
G5 Entertainment (2014) Facebook (2012) Deliveroo (2021)
GAN (2020) HearMeOut (2016) Delivery Hero (2017)
Hugo Games A/S (2015) Life360 (2019) DoorDash (2020)
IsCool Entertainment (2012) Pinterest (2019) Grubhub (2014)
Kahoot! (2019) Snap (2017) Just Eat (2014)
King.com (2014) The Meet Group, Inc. (2011) Olo (2021)
Nitro Games (2017) Twier (2013)
Roblox (2021)
Rovio Entertainment (2017)
Rush Street Interactive (2020)
Zynga (2011)
App Developer Tools Other Digital Marketplace
Agora.io (2020) Bumble (2021) ACV (2021)
Millennial Media (2012) DropCar (2018) Scout24 (2015)
Nektan USA (2014) Spotify (2018)
Square (2015) Sprout Social (2019)
Unity Technologies (2020) Storytel (2015)
Digital Payments Ride Hailing
Pushpay (2014) Ly (2019)
Shi4 Payments (2020) Uber (2019)
Appendix Table 4: Acquisitions of Companies for Which iOS Apps Are Central to Their
Business Models, US and Europe
Games App Developer Tools Enterprise
Big Fish (2014) AdColony (2021) AirWatch (2014)
Easybrain (2021) Adjust (2021) Epocrates (2013)
Glu Mobile (2021) Fyber (2021) Fiberlink (2013)
Goodgame Studios (2017) Kony (2019) MobileIron (2020)
Hutch (2020) MoPub (2013) PlanGrid (2018)
Machine Zone (2020) Paydiant (2015) Zenprise (2012)
Outfit7 (2017) Teads US (2017)
Peak Games (2020) Vungle (2019)
Small Giant Games (2018)
Storm8 (2020)
Other Food Delivery and Pickup Utilities
Grindr (2020) Bite Squad (2018) Check (2014)
iZele (2018) LevelUp (2018) Waze (2013)
MyFitnessPal (2015) Waitr (2018)
Nearpod (2021)
Shazam Entertainment (2017)
Stitcher (2020)
Retail Social Network
Dosh (2021) Instagram (2012)
Trendyol Group (2018) WhatsApp (2014)
A Global Perspective on the Apple App Store Ecosystem
A3
Methodological approach
To arrive at our results, we distinguish among three primary app monetization strategies
that developers use:
˿ The first monetization strategy is to sell and distribute digital goods and services.
Sales and distribution of digital goods and services can occur through the App
Store in the form of paid app downloads and in-app purchases, or through the sale
of digital content and subscriptions from multi-platform apps that allow for the
use and consumption of the app both in the App Store ecosystem and elsewhere.
Examples of apps using this monetization strategy include those for gaming, dating,
video and music streaming, fitness and health, and news and magazines.
˿ The second monetization strategy is to sell physical goods and services through
the app. Apps using this monetization strategy are m-commerce apps generally,
including apps for ride hailing, food delivery and pickup, grocery delivery and pickup,
general retail, and travel, as well as digital payment apps.
˿ The third monetization strategy is to sell in-app advertising. Examples of apps
using in-app advertising as their primary monetization strategy are social network
and short video sharing apps.
We employ different methodologies to estimate billings and sales facilitated by the App
Store ecosystem for each of these monetization strategies. In so doing, we rely on a variety
of data sources, including data from Apple, app analytics companies, market research
firms, and individual companies. To ensure the reliability and robustness of our estimates,
we validate and compare key inputs from different data sources.
6
Sales and distribution of digital goods and services
Apps used to sell and distribute digital goods and services fall into two subcategories:
˿ Certain app developers choose to monetize their iOS apps only through the App
Store, and those apps can only be used on the iOS platform.
7
Most billings from
these apps come from games, which involve a one-time payment or, more oen,
in-app payments that allow app users to remove ads, unlock bonus levels, or access
premium features.
8
This category also includes most photo-editing apps and dating
apps, as well as apps for short video and weather, among others.
˿ Other apps allow for the consumption of digital goods and services, both within the
App Store ecosystem and elsewhere. These so-called multi-platform apps allow
consumers to pay through either the App Store or another platform or device. In
6 This methodological approach is consistent with the one used in our 2019 Apple App Store ecosystem study.
7 Developers may also offer the same digital goods and services through apps on other platforms, such as
Android.
8 Our analysis does not include billings generated from the Apple Arcade gaming service. Apple Arcade provides
participating developers with an additional business model – distinct from the App Store – in which Apple
supports the development costs of Apple Arcade games. Many small and independent developers with games
in Apple Arcade also monetize with other free-to-play or paid games on the App Store.
A Global Perspective on the Apple App Store Ecosystem
A4
other words, consumers use non-device-specific subscriptions or purchases to
enjoy the digital goods and services provided. Multi-platform apps can be further
divided into consumer apps and enterprise apps.
- Consumer apps typically offer paid digital content – such as movies, music,
audiobooks, news, meditation courses, and fitness classes – that can be
consumed within the app. Moreover, they may offer paid digital services obtained
on the app, such as educational services, password management, job search,
and access to job platforms.
- Enterprise apps allow businesses and organizations to provide tools and
capabilities through smartphones and tablets. Those include communication
and collaboration apps, mobility management solutions, cloud-based business
apps, and file hosting services. These apps usually make money by selling
subscriptions to corporations and institutions outside of the App Store.
To distinguish between these two subcategories of apps, we manually review the
most popular apps in each App Store category, focusing on their business models and
monetization strategies. We use this information to ascertain (1) whether the app can be
used on mobile or computer browsers or on a different app platform; and (2) whether an
app on an Apple device can be used through a subscription or purchase made outside of
the App Store.
Methodology for iOS apps that sell only through the App Store
For iOS apps that sell digital goods and services only through the App Store, we count
total billings, which include Apple’s commission.
9
We use billings because they represent
the total amount customers pay.
Methodology for multi-platform apps
Background. For multi-platform apps, estimating the volume of sales facilitated by the
App Store is complex because subscriptions and purchases associated with them are not
device-specific. The lack of device specificity creates a dual challenge:
˿ First, consumers can pay to access multi-platform digital goods and services in
different ways, regardless of where they consume those goods and services. In
some cases, consumers pay through the App Store, but sometimes they do not.
˿ Second, multi-platform apps allow users to access content and services across
different devices, including non-Apple devices. For example, consumers can
stream videos through smart TVs, connected TV devices, video game consoles,
smartphones, tablets, web browsers, and across different platforms (Apple, Android,
etc.).
9 In 2020, Apple’s commission rate was 30% for the sale of digital goods and services; for subscriptions, it was
30% for the first year and 15% for any subsequent years.
A Global Perspective on the Apple App Store Ecosystem
A5
Because of these two characteristics of multi-platform apps, billings that flow through the
App Store are not necessarily a reliable indication of Apple users’ engagement with multi-
platform apps. Consequently, we must be deliberate about aributing the appropriate
share of billings and sales to the App Store ecosystem.
Example. To illustrate these challenges, consider the video streaming service Hulu. The
Hulu app is free to download, but a subscription is necessary to watch content on the
iPhone, iPad, and Apple TV apps. A Hulu subscription can be purchased in one of two
ways:
˿ Through the Hulu app on an Apple device, in which case the purchase happens
through the App Store. But a subscription purchased through the App Store can
also be used to watch Hulu on other platforms. Consequently, it would be incorrect
to aribute all of the App Store billings (the full subscription amount) to the App
Store ecosystem, because it would overstate the value of the Hulu product enjoyed
on Apple devices specifically.
˿ Outside of the app (on a Mac or PC via web browser, for example), in which case
the purchase does not happen through the App Store, and there are no App Store
billings. However, the subscription can be used to watch content on Hulu using
apps on Apple devices. Consequently, it would be incorrect to use the App Store
billings (which are zero) as an input to our App Store ecosystem results, because
it would understate the value of the Hulu product enjoyed through apps on Apple
devices.
Methodology. To address these challenges, we generally do not rely on App Store billings
for multi-platform apps. Instead, we rely on the proportion of use that occurs on apps in
the App Store ecosystem to estimate how much of the total sales of multi-platform apps
(App Store plus non-App Store) is facilitated by the App Store ecosystem.
Consider, for example, not just Hulu but the entire video streaming industry, a market
with more than $26 billion in total annual sales in the US in 2020.
xv
Users consume video
streaming content over a mix of smartphone apps, tablet apps, desktop browsers, smart
TVs, connected TV devices, and video game consoles. To estimate the volume of sales
facilitated by the App Store ecosystem, we first take the portion of hours streamed on
smartphone apps, tablet apps, and smart TVs of all types. We then apportion this share to
Apple devices specifically using the Apple market share for each device category.
Using this framework and approach, we estimate the volume of sales facilitated by the
Apple App Store ecosystem for several categories of apps offering similar types of goods
and services. The app categories for which we estimate sales facilitated by the App
Store are video and music streaming, e-books and audiobooks, news and magazines,
and enterprise. We use third-party research to account for the variation in users’ app
consumption habits across categories and countries. For example, consumers oen listen
to music and audiobooks through apps on mobile devices, while they are more likely
to stream videos on smart TVs. Those consumption habits may also vary by geography.
A Global Perspective on the Apple App Store Ecosystem
A6
Additionally, when the data is available, we take into account any variation in the
consumption paerns of iOS (and non-iOS) users by app type and geography.
For each app category, we estimate total sales by geography, relying on inputs from third-
party sources, typically market research firms.
xvi
We then apportion those sales using the
share of content consumed on apps on any platform by geography, based on information
collected from marketing surveys, company reports, or data on usage paerns.
xvii
Finally,
we apportion usage to Apple devices specifically using the Apple market share for each
device category in each geography.
xviii
We use a more tailored approach for enterprise apps for a number of reasons. First, usage
paerns are more heterogeneous for enterprise apps. Second, app-based usage and
desktop-based usage of enterprise products tend to be more integrated. Third, the pricing
of enterprise products is less transparent and more complex than for consumer apps.
With these complexities in mind, we individually estimate sales from 10 major apps or
families of apps – Microso Office 365, Google Workspace (i.e., enterprise versions of
Google productivity tools such as Gmail and Google Docs), Adobe (Acrobat), WPS Office,
Dropbox, Box, Baidu Drive, Webex, Zoom, and Slack. We also include an aggregate market-
level estimate for mobility management apps, which allow employees to securely access
business content.
Finally, for some categories of apps, we use billings from the App Store as a proxy for
sales facilitated by the App Store ecosystem. We do this for categories of apps, such as
meditation or fitness apps, for which consumers typically consume the content within
the app, but may purchase it outside of the App Store. This methodology likely results
in a conservative (or lower) estimate compared with an estimate relying on usage-based
apportionment.
Additional dimensions not included in our estimates
In addition to providing an outlet for users to consume digital goods and services, the App
Store has also made it generally easier for consumers to sign up for subscriptions through
what App Annie described as “the App Store’s simple, frictionless and secure payment
channel,” in particular for smaller apps.
xvix
Making it easier and more secure to sign up for
new subscriptions or make purchases may lead to incremental sales for app developers –
regardless of the platform chosen by users to consume the digital goods and services.
Sales of physical goods and services through the app
Many developers monetize their apps by selling physical products through their apps.
These include:
˿ Apps that let customers purchase physical goods and services. We broadly refer to
these as m-commerce apps. The group includes apps for general retail, ride hailing,
food delivery and pickup, grocery delivery and pickup, and travel.
A Global Perspective on the Apple App Store Ecosystem
A7
˿ Apps that enable digital payments or transfers, such as mobile point-of-sale apps
that rely on QR codes and peer-to-peer transfer apps.
M-commerce
Globally, mobile apps are an increasingly important e-commerce channel due to
their convenience. This growth has been most pronounced in China, the leader in
m-commerce.
10
Apps of retailers such as Amazon and Target allow consumers to browse
and purchase physical goods directly in the app, and offer in-store pickup or delivery. In
addition, mobile apps – including those for ride hailing, food delivery and pickup, grocery
delivery and pickup, and mobile pickup ordering – have been central to the creation or
expansion of certain business models.
Sales on m-commerce apps do not flow through the App Store.
11
We therefore use
third-party data to estimate the volume of sales of physical goods and services from
transactions on mobile apps.
12
We provide results for several categories of apps: general
retail, food delivery and pickup, travel, ride hailing, and grocery.
For each app category, we estimate the total volume of e-commerce or m-commerce
sales by geography, relying on estimates of third-party sources, typically market research
firms.
xx
We then apportion the volume of sales, if necessary, to purchases that occur via
smartphone and tablet apps. For example, for online food delivery and pickup, customers
may place orders via an app, a mobile browser, or a desktop browser. We estimate the
share of each app category’s sales that occurs via mobile apps, within each geography,
using information collected from marketing surveys or data on usage paerns.
xxi
Finally, we
apportion usage to Apple platforms based on the overall iOS market share.
13,xxii
Digital payments
Digital payment apps have become increasingly popular worldwide, although the
landscape differs substantially across countries. In China, currently the largest market for
digital payments, two QR code-based payment apps, Alipay and WeChat Pay, dominate
both online and brick-and-mortar points of sales. These apps charge merchants a fee on
purchases paid for with their apps. In the US, app-based payment systems are a relatively
nascent market,
xxiii
while peer-to-peer transfer apps such as Venmo and Cash App are
already popular and have grown significantly in recent years.
xxiv
10 In China, more than 80% of online retail is mobile. Additionally, most mobile commerce occurs through apps,
and to a lesser – but increasing – extent through “mini-programs” on platforms such as WeChat, Baidu, and
Alipay. See eMarketer; QuestMobile, “China Mobile Internet 2019 Half Year Report”; Aladdin, “2019 Mini-Programs
White Papers,” January 2, 2020..
11 Since the launch of the App Store, Apple’s policy has been not to charge a commission on sales of physical
goods and services or advertising.
12 The sales associated with purchases made on mobile browser apps are excluded.
13 Apportioning by iOS market share almost certainly results in a conservative estimate because owners of iOS
devices tend to spend relatively more than owners of Android devices. (See, e.g., Comscore.)
A Global Perspective on the Apple App Store Ecosystem
A8
We estimate the transaction fees collected by developers from customers or merchants
for payments and transfers occurring through apps on the iOS platform.
14
For QR code-
based payment apps in China, we start with an estimate of total payment volume
(TPV) from a third-party research firm.
xxv
We then estimate WeChat Pay and Alipay total
transaction fees using their published fee rates and deductible policies. For peer-to-peer
transfer apps in the US, we use the ratio of total transaction fees to TPV from Venmo and
Cash App to estimate the transaction fees collected by the apps. Finally, we apportion
usage to Apple platforms based on data on the overall iOS share in each region.
xxvi
In-app advertising
In-app advertising is a frequently used and effective method of monetizing apps whereby
developers publish advertisements within their apps. Prominent examples of apps that
primarily make money through in-app advertising are Facebook, Instagram, Twier,
YouTube, Pinterest, and TikTok. Examples of games are Rolly Vortex and Helix Jump.
These apps tend to be free to download and use, but in-app advertising can also be a
complementary monetization strategy for paid apps or apps with in-app purchases.
Users have been spending more and more time on their mobile devices, particularly using
apps, which has led to an increased share of digital marketing expenditures going toward
in-app advertising. Given that apps are used frequently throughout the day – for example,
during commutes or moments of downtime – in-app advertising allows advertisers to
reach users in ways that other marketing channels cannot. Compared with mobile web,
the app environment is a more effective way for advertisers to reach their audiences, with
in-app advertisements allowing for personalized and contextually relevant ad messages.
Technology research firm Omdia estimated that in-app ad sales for iOS apps
15
were $46
billion in 2020, with almost $19 billion (41%) tied to gaming apps.
xxvii
Omdia derived this
estimate based on ad sales reported by large digital advertising firms, and then used
data analytics from mobile ad platforms to apportion the iOS share, limited to in-app
advertising only (i.e., by removing mobile web advertising), and to adjust for ad price
differences between the iOS and Android app platforms. We use Omdia’s research in this
study. In 2020, Omdia considerably remodeled their historical estimates and projections
based on new data and feedback from industry players.
14 Our study excludes digital payment apps and services based on near-field communication, such as Apple
Pay. Mobile commerce transactions that occur within an app and are paid with Apple Pay are included in
m-commerce sales.
15 This estimate includes revenue generated from the publishing of advertisements within apps only, and excludes
advertising on mobile web (including mobile browser apps), search advertising, and Apple Search Ads.
A Global Perspective on the Apple App Store Ecosystem
A9
Sources
i Business of Apps, “App Data Report."
ii Borck, Jonathan, Juliette Caminade, and Markus von Wartburg, “How Large is the Apple App Store Ecosystem, A
Global Perspective for 2019,” June 15, 2020.
iii App Annie, “How COVID-19 has Changed Consumer Behavior on Mobile Forever,” August 17, 2020.
iv McKinsey & Company, “How COVID-19 has pushed companies over the technology tipping point – and transformed
business forever,” October 5, 2020.
v McKinsey & Company, “Consumer sentiment and behavior continue to reflect the uncertainty of the COVID-19
crisis,” October 26, 2020.
vi App Annie.
vii Apple, “Apple Services now available in more countries around the world,” April 21, 2020.
viii Excellent Webworld, “How Much Does it Cost to Make an App? (In 2021),” October 25, 2019.
ix Medium, “How the Fragmentation of iOS and Android Platforms Affects App Development,” June 23, 2020.
x Infinum, “Android Development Is 30% More Expensive Than iOS. And We Have the Numbers to Prove It!” October
27, 2015; EGO, “5 Major Differences Between iOS and Android App Development,” March 30, 2021.
xi Backes, Michael, Sven Bugiel, and Erik Derr, “Reliable third-party library detection in android and its security
applications,” Proceedings of the 2016 ACM SIGSAC Conference on Computer and Communications Security, 2016.
xii Embrace, “How Many Mobile SDKs Is Too Many?” April 29, 2021.
xiii Certiport, “App Development with Swift certification.”
xiv Station F, “Services.”
xv Statista, “Digital Market Outlook.”
xvi Statista, “Digital Market Outlook” and “Mobility Market Outlook”; data from eMarketer and iResearch; other market
research.
xvii J.P. Morgan, “2020 E-Commerce Payments Trends Report”; eMarketer, Comscore, Conviva, company reports (e.g.,
Securities and Exchange Commission Form 10-K reports), GlobalWebIndex, and other marketing surveys.
xviii StatCounter, Comscore, Parks Associates, and Strategy Analytics.
xix App Annie, “The State of Mobile 2019.”
xx Statista, “Digital Market Outlook” and “Mobility Market Outlook”; data from eMarketer and iResearch; other market
research.
xxi J.P. Morgan, “2020 E-Commerce Payments Trends Report”; eMarketer, Comscore, Conviva, GlobalWebIndex, and
other marketing surveys.
xxii StatCounter, Comscore, Parks Associates, and Strategy Analytics.
xxiii Forbes, “Why the U.S. Still Lags Behind China In Mobile Wallet Adoption,” June 25, 2019.
xxiv Marketwatch, “Venmo and Square’s Cash App were going gangbusters before the pandemic – now they’re doing
even better,” June 20, 2020.
xxv iResearch.
xxvi StatCounter.
xxvii Omdia, “App Ecosystems Forecast – 2020–2025,” February 11, 2021.
A Global Perspective on the Apple App Store Ecosystem
About the Authors
Jonathan Borck, Ph.D., is a vice president at Analysis Group. Dr. Borck specializes in the
application of statistics and economics in the areas of finance, health care, antitrust, and
the environment. He is also an adjunct lecturer in public policy at the Harvard Kennedy
School, where he teaches probability and statistics to master’s degree students.
Juliee Caminade, Ph.D., is a vice president at Analysis Group. Dr. Caminade specializes
in the economic analysis of various antitrust issues and complex business disputes in
multiple industries, including health care, pharmaceuticals, and consumer and industrial
goods. Dr. Caminade’s articles have appeared in publications such as the Journal of
Competition Law & Economics and The Antitrust Source. Dr. Caminade has taught an
undergraduate course on competition economics in the economics department of
Dartmouth College.
Markus von Wartburg, Ph.D., is a vice president at Analysis Group. Dr. von Wartburg
specializes in the application of econometric methods and microeconomic theory
to complex problems in antitrust and competition, commercial litigation, media and
telecommunications, finance, and intellectual property.
Analysis Group is one of the largest international economics consulting firms, with
more than 1,000 professionals across 14 offices in North America, Europe, and Asia.
Since 1981, Analysis Group has provided expertise in economics, finance, health care
analytics, and strategy to top law firms, Fortune Global 500 companies, and government
agencies worldwide.
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