iPhone users spend insane amounts of money on mobile apps


iPhone users are spending insane amounts of money on mobile apps. Nearly $40 billion had been paid out to developers over the App Store’s lifetime, Apple (NASDAQ:AAPL) discloses in this year’s holiday season App Store PR.

With Apple getting a 30% cut on App Store transactions, $40billion in payouts would equal $57.1 billion in gross revenue and $17.1 billion in net revenue.

Over $20 billion was spent through the App Store in 2015 ($6 billion + cut for Apple), up from ~$15 billion in 2014. Over $1.1 billion was spent on apps and in-app purchases during the two weeks ending Jan. 3 (a busy period due to Christmas gift unwrapping).

Though Google Play’s download rates have long surpassed the App Store’s, favorable demographics and Apple’s requirement that a credit card  should be supplied to set up an iTunes account have led the App Store to maintain a healthy monetization edge, which in turn leads many developers to still write for iOS first and Android second.

But iPhone sales have slowed down during the holiday season reaching high market inventory levels. Therefore, iPhone production has been reduced again in the past two weeks to 43 million units for the March quarter.  It is expected that March quarter iPhone sales to be around 45-46 million, considering enough inventory in the retailing channels. Normally, iPhone sales resume normal seasonality in the June quarter, but it is that the overall China smartphone market is slowing down to flattish YoY growth in 2016, which will affect iPhone sales growth in China. India is not expected to become a meaningful iPhone market in the short-term.


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