Apple has seen a spike in revenue as shoppers spent more than $1.8 billion on digital goods and services in the last week of 2020 and this has seen Apple’s App Store have a record breaking holiday season. Yes! Apple’s App Store customers spent a record $540 million on New Year’s Day alone, marking a 40% increase from last year, the company said Wednesday in its annual services report. Apple said the sales spike, which occurred between Christmas Day and New Year’s Eve, was largely driven by game sales and now 90 million monthly active users for its Apple Books app.
What Apple didn’t fully spell out was to what extent the pandemic played a role in increased app spending over the course of 2020. It did again note that top apps during the year had included those that helped customers stay connected and be entertained, like Zoom and Disney+, as well as games that brought people together, like Roblox and Among Us.
However, the company didn’t detail how much customers spent on apps and games over 2020. That leaves us to look to third-party estimates for those figures. According to Sensor Tower’s year-end report, global consumer spending on the App Store reached $72.3 billion in 2020, up 30.3% year-over-year from $55.5 billion in 2019. App Annie came up with a similar figure in a preliminary estimate ahead of its annual report.
But the report didn’t provide updates on subscribers for its suite of newer subscription products such as Apple TV+, its video streaming service; Apple Music and Apple Fitness+, which is a Peloton competitor. In the fall, Apple began bundling many of its subscription services together as part of its Apple One program. The services category is a key growth area Apple has focused on in recent years as hardware sales growth has fallen.
Apple’s App Store update also comes as tensions continue to rise over Apple’s control over its App Store policies. Several app developers, most notably Facebook and Fortnite maker Epic Games, have publicly criticized Apple for taking a 30% cut of App Store sales from developers and for enforcing a new policy designed to disclose which apps track your data for targeted advertising. Apple recently altered its policies to take a 15% cut from companies that generate less than $1 million in App Store sales, which the company said was a move to help small businesses.
Eddy Cue, Apple’s senior vice president of Internet Software and Services said;
“We’re incredibly optimistic about where we’re headed, and we believe that the opportunities for developers and the creative community are endless, as are the positive and meaningful benefits to our customers.”
Overall, Apple’s services generated revenue of $53.8 billion in the company’s last fiscal year, which ended in September 2021. Apple is expected to report its fiscal first-quarter earnings in a few weeks.
