Apple’s App Store facilitated $1.3 trillion worth of app sales and billings in 2024, and the company stated it took no commission on 90% of that total. The figure comes from a new Apple-commissioned study, released as the company works to portray its platform as profitable for developers and fair in its fee structure.
Breakdown of App Store-driven revenue
According to the report:
- Sales and billings from digital goods, such as games and photo or video editing apps, generated $131 billion.
- Physical goods and services, including food delivery, brought in over $1 trillion.
- In-app advertising added another $150 billion.
- Total spending across all three categories has doubled since 2019.
“It’s incredible to see so many developers design great apps, build successful businesses, and reach Apple users around the world,” Tim Cook, Apple’s chief executive officer, said in a statement. “This report is a testament to the many ways developers are enriching people’s lives with app and game experiences, while creating opportunity and driving new innovations. We’re proud to support their success.”
Apple has been getting heat over the years regarding the high commission it charges on App Store sales and the barriers it imposes on third-party app stores, which make it difficult for iOS developers to bypass these fees. In-app purchases can recoup some of these losses, but the company has tightly controlled this channel tool.
Because the iPhone is the most popular smartphone in the world, app developers would significantly limit their potential earnings if they did not make their products available on iOS. Therefore, Apple can charge what it likes for the privilege. Regulators have taken note of this and are working to ensure that the revenue share the tech giant takes for distributing and promoting apps through its App Store is proportionate.
Regulators push back on Apple’s App Store commission model
On April 30, a US district judge ruled that Apple must stop taking 27% commissions on in-app purchases made through external links to third-party websites, also known as “link-outs.” This marked a legal victory for “Fortnite” creator Epic Games, which argued the fee discouraged developers from offering alternative payment options outside Apple’s ecosystem.
Apple had argued that allowing app makers to direct users to third-party sites to collect payments could compromise the security of the apps and devices. Funnelling payments through Apple also lets customers complete their transactions faster, but app makers lose more revenue that way.
The EU’s Digital Markets Act aims to ensure fair and competitive digital markets in the region by setting rules for influential tech firms. Apple was formally charged last summer for breaching the DMA by making the requirements regarding the use of link-outs for purchases too restrictive and for charging a commission on them.
SEE: Apple Faces New Penalties as EU Publishes Full Antitrust Decision
Plus, if developers agree to the business terms that allow them to use link-outs, they must also agree to pay the Core Technology Fee for each first app install over a certain threshold, serving as another disincentive.
The Commission argued that the fees relating to link-outs go “beyond the possible remuneration for the initial acquisition of that end user facilitated by Apple.” Apple states that fewer than 1% of app developers meet the threshold required to pay this fee.
