Petr Škuta At the end of April, investors will traditionally learn about Apple's financial performance for the last quarter. And one of the reports will also concern the App Store, which is experiencing a decline in numbers for the first time since 2015 downloaded applications. However, the analysis of the results points out that this does not yet mean a decrease in income.
It could be interest you
Amaya Toman The report was prepared by the respected company Morgan Stanley, which was shared on Twitter by CNBC editor Kif Leswing. A very interesting finding concerns the results of the App Store management. In the first quarter of 2019 (Apple's second quarter), it is experiencing a decline after a long time.
"For the first time since the first quarter of 2015 (that's as far back in history as we still have data), App Store download numbers fell 5% year-over-year."
While investors have certainly taken notice, the analysis isn't over yet. Revenue from the App Store is not linked to the number of downloaded applications. More factors come into play, especially in recent years. The number of downloads alone does not say anything about how intensively users use the application.
And this is where other revenue components enter the equation, such as in-app microtransactions including regular subscriptions. The situation looks very good from this point of view, despite the fact that major companies such as Netflix or Spotify have removed the option to subscribe to the service directly from the application.
In addition, services led by subscription will grow. After all, Apple is betting its future on them, and partly this year we will see, for example, Apple TV+, Apple Arcade and Apple News+ already works in the US and Canada.
Games drive App Store revenue up
The quarterly profit from these services is estimated at 11,5 billion dollars. That's a 17% year-over-year increase and a success, despite missing forecasts of $11,6 billion. In addition, the services should contribute to the growth of Apple's income in the long term and continue to grow in 2020.
It is also very interesting that the App Store has dominated the games category for a long time. While on the Mac it was a completely neglected sector, with exceptions (2010 and the Keynote, when Steam for Mac OS X was announced), on iOS Apple has always devoted itself to it.
The power of gaming has been shown mainly in Asian markets, where the Chinese government has relaxed the approval of licenses for new games. Titles such as Fortnite, Call of Duty or PUBG went to the App Store there, which supported growth by more than 9% thanks to their popularity.
Moreover, analysts estimate that the potential of this sector is far from exhausted. In the end, the decline in downloaded applications may not have an impact on revenue from the App Store at all.
Source: AppleInsider
And what am I wondering? 1. Removing the App Store from iTunes was a huge mistake. 2. The App Store becomes more and more cluttered with each new version of iOS.