App Store Revenues Up 50 per cent, But The Payout Is Smaller Than You Think

For all the attention mobile apps receive in the press, their actual payout appears relatively modest. 

Apple announced last week that it has made cumulative payments of $7 billion since introducing the App Store in mid-2008. Parsing former payment information releases, we can surmise that Apple App Store revenues were approximately $4.3 billion last year, a 50 per cent increase from 2011.

That’s not pocket change, but it includes the 30 per cent cut that Apple takes on each transaction. With 775,000 apps now in the App Store, and the app long-tail taking an increasing share of revenue, it doesn’t necessarily translate to large payouts for individual companies either.

Given that developers earn four times as much on iOS as they do on Android, we can guess that the overall mobile app economy isn’t much bigger than Apple’s share. If we assume, conservatively, that Apple accounts for 75 per cent of total global app revenues across all mobile platforms, that translates to roughly $5.7 billion in total cumulative revenues. 

There is money to be made in mobile apps, clearly, but expectations need to be tempered. Two years ago, for example, Gartner forecasted that non-advertising mobile app revenues would top $20 billion in 2012. 

Apple app store revenues

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.