The App Store has become an extremely important business for Apple, since 26% of the company’s revenue comes from services. A lot of people download apps every day, but interestingly, there seems to be a new trend in the app market. A recent research shows that users are downloading fewer apps from the US App Store. However, this doesn’t mean that developers are making less money from their apps.
US App Store downloads are dropping
A research shared by intelligence firm Appfigures (via TechCrunch) reveals that some developers are seeing the download numbers of their apps decline in the US App Store. Based on the Mobile Market Index, which tracks the downloads and revenue of the top 25 apps in each App Store category, the number of downloads by August 31 was down 9% compared to the same period in 2022.
Exactly a year ago, the Mobile Download Index reached 91.87 points, while this year the Index has dropped to 83.59 points. Appfigures notes that last year’s figure was already below the 2018 figure, but not by much. This time, the difference was more significant.
During the last holiday season, the Index exceeded 95 points, which was no surprise since there are a lot of new people buying Apple products as Christmas gifts around December. However, downloads then plummeted to as low as 64.50 points in April 2023. The number of downloads returned to more regular levels during the summer.
According to the intelligence firm, the drop in App Store downloads is more related to a loss of interest and market saturation in news, games and entertainment apps. Some categories have been doing well despite this, such as productivity apps, which grew by almost 70% over the past year.
App revenue grows
Despite the drop in the App Store downloads, it seems that developers are actually making more money from their apps. Appfigures reports that the Index for revenue has grown from 363.13 points to 458.3 points since 2018. “Revenue growth has far outpaced the slowdown in downloads as more developers are focusing on monetization,” the firm explains.
In other words, although people are downloading fewer apps, they’re also spending more money within the apps they already have.
Apple reported revenue of more than $21 billion from services during the third fiscal quarter of 2023. Although the category also includes Apple’s own services, the vast majority of it comes from the App Store. The company also passed the 1 billion paid subscriber mark last month.
And with new iPhones and the holiday season coming soon, developers will once again have the opportunity to attract new users and boost the downloads of their apps.
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