Apple’s iOS App Store sales stalled for 8 months. Revenue per download drops 30% in the last 4

Most of the numbers Apple provided during WWDC keynote yesterday, showed a tremendous growth along all the metrics for iOS.

But  there was one number that was well below from what I expected. Payments to iOS developers and – as a proxy – App Store sales. They seem to have stopped growing at about $250 million a month level, for 8 months now.

Tracking the real iOS app sales is a pretty difficult and imprecise thing. But Apple occasionally reveals the total amount it has paid out to developers since the opening of the App Store, which gives us a glimpse into an iOS app economics. It did so on 5 occasions now:

* -estimates

The interesting payment periods in the table above are – Oct. 4th 2011 to Jan 31st 2012, and Jan. 31st to June 11th.

They are roughly the same in length – about 4 months. And the amount of payments to developers during these periods is also the same – $1 billion. Which is not a good thing, if you consider how much the iOS ecosystem grew in the meantime.

Apple shipped about 140 million new iOS devices from October till June, about 50% increase in installed base. The number of apps in App Store went from 500K to 650K. Average downloads during the same period – almost doubled.

Yes, there are a lot of caveats to the table above. The app sales obviously do not jump to the new average level and stay there during the new reported period. They do increase (or used to), every month and then get reported as a lump sum. And the payments to developers that Apple reports, are at least a month behind the actual sales. (In May, developer gets paid for what he earned in March). And yes, there probably are ups and downs from month to month. E.g. – based on the reported numbers, in January Apple most likely paid out about $300 million that developers earned in November.

But that does not change the fact, that Apple’s payments to developers have been stalled at the same average $250 million a month level, for 8 months now. Which – coupled with the app number growth in the Store – means less revenues per paid app for average developer. It also means less app downloads per every new iOS device.

And if you look at the average developer revenue per app download, the numbers start looking even worse. Developer revenue per download went down from about $0.20 in Oct.-Jan. to $0.14 in Feb-Jun. That’s 30% drop in just 4 months.

Is it a short blip, with seasonality in play, after humongous Christmas Season? Maybe.

But it can also be a start of the new trend with huge implications for the future of iOS app economy.

Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • Anonymous

    Possibly many explaining variables, including:
    * How many times do early adopters need to buy a navigation app? Reacquisition is not required upon upgrade to a new iOS device.
    * HTML5 is reaching maturity. Developers are tired of Apple taking all their revenues and/or the hassel of simultaneously developing for multiple OS platforms, so developers are increasingly opting to deploy in HTML5.

  • Anonymous

    It looks to me like it has to do with the date of data collection and the date of data release.

    The developer revenue per app has been as follows:
    period 1: $0.20
    period 2: $0.15
    Period 3: $0.16
    period 4: $0.20
    period 5: $0.16

    The average payment per app over the entire time has been $0.16.

    There are a lot of factors that can effect the rates of sales, particularly in the early years, such as holiday sales of iPods and iPads which often are given as gifts along with an iTunes card.

    Given the relatively short time frames of the last two periods, a week or two of difference in actual duration would make a huge difference to the total numbers.

    I think this is a trend worth following closely, but I wouldn’t read too much into it just yet.

    You should take a look at Asymco.com’s post for today. He’s got a ton of charts on this topic.