Apple's Great App Store Sales May Not Signify Much
Jan 6, 2017 5:00 AM PT
Apple's App Store racked up an all-time high of US$240 million in sales on the first day of this year.
On the whole, 2016 was a very good year for Apple devs, who earned more than $20 billion for their apps -- up 40 percent over 2015.
"Apple has always had the most profitable ecosystem and app market in terms of revenue per user and price per app," said Holger Mueller, a principal analyst at Constellation Research.
Super Mario Run was the most downloaded app worldwide on Christmas Day and New Year's Day. It made history, with more than 40 million downloads within four days after its Dec. 15 release exclusively on iOS.
Games -- including such titles as Monster Strike, Fantasy Westward, Cash Royale and Pokemon Go were among the top-grossing apps, Apple said.
The Apple App Store now lists 2.2 million apps, which is 20 percent more than it offered last year.
For consumers, this means "more choice, more competition -- all good things," Constellation's Mueller told the E-Commerce Times.
Indies Get Their Share
Independent Apple devs didn't miss out on the earnings bonanza, despite the surge in the number of apps in the store.
Prisma, Reigns, Procreate, Lumino City, Sweat With Kayla and djay Pro, all from indie Apple devs, were among the most successful apps for the iPhone, iPad, Apple TV, Apple Watch and Mac, Apple said.
"Generally, it's hard to get noticed, but good apps are carried by great reviews in and outside the app stores," noted Al Hilwa, a research program director at IDC.
An increase in the number of apps available "isn't going to materially change the formula for success," he told the E-Commerce Times.
Devs may find it easier to monetize their apps, thanks to the launch on Thursday of Appy Jump, a performance ad network from cloud-based DIY app creation platform Appy Pie.
Appy Jump lets devs incorporate ads and in-app purchasing into their apps easily, because Appy Pie's SDK is built into all its apps, said CEO Abs Girdhar.
"iOS app devs can incorporate ads from third-party networks like Admob and Airpush, but this involves incorporating their SDKs, and to do this you need to be an advanced developer," he told the E-Commerce Times.
The Impact of SiriKit
With the introduction of SiriKit in iOS 10, users can book rides, make payments, and return calls, among other things.
"Voice is the new interface -- but Apple has to do its homework, as Siri can't really compete with Cortana, Alexa and Google's voice assistant at the moment," Mueller remarked. "Jokes about Siri's not working are rife in the ecosystem."
Devs "need to be aware of the evolving landscape, from dedicated applications to chatbots integrated into conversational or messaging platforms," Constellation Research Principal Analyst Alan Lepofsky told the E-Commerce Times.
Head to Head With Google
Android smartphones dominate the market, and Google Play offers better beta testing, slicing and advertising than the Apple App Store, Constellation's Mueller noted. Also, Play "has more global reach and more users."
However, Apple devs will continue to rake in the money, because "Apple users tend to have more disposable income than Android users," Salto Partners Managing Partner Andreas Scherer told the E-Commerce Times.
In any case, "most major apps are multiplatform, especially those intended for marketing or customer engagement, and aren't about generating app revenues or advertising," IDC's Hilwa pointed out.
App Store Red Flags
Apple last fall posted its first annual sales decline, largely due to flagging iPhone demand.
That poor showing constituted a "red flag for developers," said Mueller, "and 2017 will have to show if the platform -- iPhones -- can be maintained."
Apple is likely to cut iPhone production by 10 percent in Q1, noted Mueller, which "cancels out the good news on increased store revenue."