Apple's App Store downloads top $10bn: Battle for developers' hearts and minds heats up

iOS device owners downloaded nearly three billion apps in December, while developers earned $8bn across the year. But the competition is closing in, fast.

Apple customers spent over $10bn in its App Store in 2013 — including over $1bn in December, the company has revealed.

The company said App Store users downloaded almost three billion apps in December making it the most successful month for the app repository. As a result, it said, Apple developers have now earned $15bn from apps in the Apple App Store; this time last year that figure stood at somewhere around $7bn.

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The app store continues to be a central element in the success of the Apple tablet and smartphone ecosystem. The number of apps available for iOS devices continues to grow: Apple said its app store — available in 155 countries — now includes more than one million apps for the iPhone, iPad and iPod and, and 500,000 native iPad apps.

Back in January last year Apple said it had more than 775,000 apps in the App Store with 300,000 native iPad apps available, and that developers had made "over $7bn on the App Store". In March 2012 the app store contained 550,000 apps, including 170,000 native iPad apps.

But while these numbers look impressive, Apple is facing increasing competition in the app store space as Google's Android and Amazon's own version of Android generate increasing levels of app store revenue.

During 2013, the revenue from Google's Play app store grew at Apple's expense, according to research by apps analytics company Distimo. However, in November last year, the Apple App Store was still leading its rival with 63 percent of app revenue compared to 37 percent for Google Play.

"For some apps, the download volumes from the Amazon Appstore started to compete with download volumes in established app stores like the Apple App Store and Google Play," the company said.

It calculated that on a typical day in November last year, the global revenues for the top 200 grossing apps in the Apple App Store stood at over $18m. For Google Play, its estimate was about $12m. But Android apps revenues are catching up — in November 2012, these estimates were at $15m for the Apple App Store and only at $3.5m for Google Play.

Free apps with additional options for in-app purchases are by far the most common types of apps.

Promoting the scale and lucrative nature of its app store is vital to the success of the broader Apple ecosystem. As analyst Benedict Evans pointed out on his site last year: "A key selling point for the iPhone (though not the only one) is that the best apps are on iPhone and are on iPhone first. If that does change then the virtuous circle of 'best apps therefore best users therefore best apps' will start to unwind and the wide array of Android devices at every price point will be much more likely to erode the iPhone base."

If Google's Play revenues continue to rise then developers might be tempted to defect to Android – especially as the installed base of Android continues to grow at a rapid pace. That's part of the reason why Apple is so keen to trumpet the success of its app store as much as possible.

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