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Apple's iOS App Store broke records this holiday season (AAPL)
BI Intelligence
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Apple’s App Store started off 2018 by breaking app purchasing records on New Year's Day, the company announced in a press release.
Consumers spent $300 million in app purchases on January 1, 2018, marking the highest sales day for the App Store since its launch in 2008.
This outstrips last year’s record-breaking figure of $240 million in purchases on January 1, 2017. The strong New Year's Day performance culminated a successful holiday season, during which customers spent $890 million on apps from December 24-31. Insights into app spending during the holiday season are indicative of the strength of the iOS platform for the year to come, as many consumers receive smartphone devices and purchase new apps, games, and subscriptions over the holiday period.
While the news is a boon to Apple, iOS developers are also reaping the benefits. Apple paid out $26.5 billion to developers during 2017, a 30% year-over-year increase from 2016. Apple has paid iOS app developers over $86 billion since the App Store's launch. This means that 2017 alone accounted for over 30% of total developer payouts in the nearly 10 years the App Store has existed.
The strong performance of the App Store over the holiday period combined with new discoverability features Apple rolled out in 2017 could serve to further establish iOS as a preferable development platform. Apple’s App Store received a major overhaul as part of the launch of the new iOS 11 operating system in September. It features several changes aimed at enhancing app discovery across the store, which is one of the biggest challenges app developers face. One new feature, dubbed "App of the Day," highlights a new app and game every day to help increase downloads and awareness. Already, the feature is having a significant impact on app download performance of lesser-known apps and games — it can boost some app downloads in a day by up to 2,172%, according to research from app analytics platform Apptopia.
Apple’s App Store revenue is integral to the future prosperity of the company. Apple’s Services revenue, which includes money derived from the App Store, has become an increasingly larger share of Apple’s total revenue over the past few years as revenue growth from iPhones has decelerated. And while iPhones will remain a lucrative revenue generator for some time, Apple will continue to diversify by focusing on developing new revenue streams, such as ARKit and Apple Watch, to drive revenue in the App Store.
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