When Apple created the iPhone, I don’t think it expected to create an entire industry worth billions of dollars that had nothing to do with its phone hardware.
No, it took an entire year for the App Store to launch after the original iPhone. And in the six years since, Apple has paid out some $25 billion to its developer partners, with $10 billion of that just in 2014.
According to a press release, Apple saw App Store billings rise 50% from 2013 to 2014. Following a Christmas where iTunes and App Store Gift Cards rivaled Starbucks — which sold nearly 46 million gift cards over the holidays — as the gift card of choice, Apple broke some of its own records.
New Year’s Day 2015 was the App Store’s best day ever, with customers spending close to half a billion dollars on apps and in-app purchases alone. The trend continued, because the first week of January was the best week ever for the App Store.
This is pretty nice for Apple. The company takes 30% from every app sold and all in-app purchases, with 70% going to the developer. Apple’s cut ostensibly covers servers, the cost of developing iOS API’s, WWDC, and more. But in 2014, Apple cleared some $4 billion in App Store revenue. That’s nothing to sneeze at, and the division is surely profitable, if not quite at the margin of the iPhone itself.
There are more than 1.4 million iOS apps on the App Store, with half of those made for the iPad. Apple claims the iOS ecosystem, as a whole, has “helped create 627,000 jobs in the US alone.” It’s a truly impressive number, and one that’s sure to rise as more and customers buy iPhones and spend money on the App Store.
In fiscal 2014, the iTunes Store (which includes Apple’s digital music, movie, and app stores) generated more than $18 billion in total revenue. While Apple came in at number five on the Fortune 500 for 2014, the iTunes Store alone would rank 159th, just ahead of cereal giant General Mills and Southwest Airlines in revenue.
Though the vast majority of Apple’s revenue comes from the iPhone, at 56% of total dollar revenue — the next largest category is the Mac at a mere 16% — those other divisions are still larger than all but the biggest 100 or 200 companies on the Fortune 500.
Apple is just that big. However, if the first week in January is any indication, Tim Cook and company are just getting started.
Did you give or get an iTunes or App Store gift card for the holidays? Let us know in the comments below.