iPhone Shock: Discover the Staggering Amount Apple Made Us Spend on the App Store!

The App Store is responsible for generating hundreds of billions of US dollars in spending each year, presenting a significant opportunity for developers looking to profit from iPhone users. However, what about the commissions Apple collects on transactions?

$406 billion US dollars—that’s the total generated from sales and billing of products and services through the App Store in 2024 alone in the United States, according to a study funded by Apple and conducted by Professor Andrey Fradkin from the Questrom School of Business at Boston University and economist Jessica Burley from Analysis Group.

It’s important to note that this staggering figure does not just include app purchases and in-app transactions. It encompasses all revenue generated within the ecosystem, including Uber Eats orders, ride-sharing bookings, and advertising revenue. As such, the majority of this $406 billion US dollars isn’t subject to Apple’s well-known commission because these activities are exempt. “For over 90% of the billing and sales generated by the App Store, developers did not pay any commission to Apple,” the company points out.

iPhone Owners Spend Generously

Apple collects a commission on the sale of digital goods and services: paid apps, streaming platform subscriptions, and in-app or in-game purchases. This commission is 30% for more popular applications and 15% for smaller ones. This is why publishers seek to bypass the App Store’s payment system. Epic Games, for instance, recently won a significant legal battle over this very issue. However, this commission does not apply to the sale of physical goods and services (like buying a product on Amazon or ordering a meal delivery) or to advertising.

“Over the past five years, the size of the App Store ecosystem has almost tripled, growing from $142 billion in 2019 to $406 billion last year, and revenues for developers based in the United States have more than doubled. Particularly, small developers have seen outstanding results, with their revenues increasing by 76% between 2021 and 2024,” Apple reports, based on the study’s findings.

It’s worth mentioning that the market share of the iPhone in the United States is significantly higher than in the rest of the world. In the US, more than one in every smartphone sold bears the Apple logo. iPhone users also tend to be more affluent and are more likely to spend money on their mobile devices, whether on paid apps, microtransactions in games, or other products and services. This is why iOS and the App Store are often the priority for developers: they know it’s easier to monetize their platform with Apple consumers than with those on Android.

Emerging Consumer Trends

By sharing such impressive performance data, Apple clearly aims to reinforce that there is no better ecosystem than its own for earning money for application developers. The company also emphasizes its ongoing efforts to ease the distribution and visibility of apps and teases new features to customize product pages.

Out of the $406 billion US dollars generated on the App Store last year, $277 billion came from the billing and sales of physical goods and services, $75 billion from integrated advertising, and $53 billion from digital goods and services. “Key drivers include the growth in meal and grocery delivery, entertainment, and enterprise applications,” the report notes.

“Since 2019, spending on physical goods and services has more than tripled, while spending on digital goods and services and advertising integrated into apps has more than doubled,” we learn. Spending on travel and meal orders for delivery or pickup has surpassed that of ride-sharing services. Productivity, education, and business-related apps have also seen significant growth. However, the gaming category still records the highest revenues over the period.