App Usage Slows Down as 'Jipkok' Ends... Apple App Store Profitability Declines

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Ji-eun] The growth of the Apple App Store, which recorded record-breaking revenue during the COVID-19 pandemic two years ago, slowed down last year. It is analyzed that the increase in application (app) sales payments, which rose as people spent more time indoors due to COVID-19, has decreased again as outdoor activities increased.

According to the U.S. financial media CNBC on the 10th (local time), Apple announced that since operating the App Store in 2008, developers have earned a cumulative $320 billion (approximately 399 trillion KRW) through the sale of digital goods and services up to last year. This is an increase of $60 billion (approximately 74.8 trillion KRW) compared to the previous year's cumulative revenue of $260 billion.

However, considering that Apple paid developers $60 billion in App Store revenue in 2021 as well, last year's performance is virtually no different from that of 2021. CNBC explained, "Because it is unclear what proportion of developers are subject to the lower 15% commission rate, the developers' income is only an approximate estimate," adding, "If Apple charges a minimum 15% commission, last year's revenue would be similar in scale to the $60 billion in 2021."

The reason the App Store revenue, which recorded record sales in 2021, slowed down last year is that users' software usage decreased. CNBC stated, "With consumers increasing spending on games and software, the service business sector's revenue grew significantly by 27% compared to the previous year in 2021," but "in 2022, the service sector earned $78.1 billion, a 14% increase from the previous year, showing a slowdown in growth."

The App Store is a major revenue source for Apple's service business and is used as an important indicator by investors. Therefore, some view last year's App Store performance as indicating a slowdown in Apple's growth engine. CNBC expressed concern, saying, "With rising interest rates and economic recession reducing consumers' spending power, the App Store's revenue faces increasing uncertainty."

On the other hand, some optimistic forecasts suggest that app sales will increase in 2023 as app prices have been raised in some global markets. Morgan Stanley analyst Eric Woodring said, "The App Store's growth remains at a historic low, indicating that global consumers are facing difficulties," but added, "Due to the increase in app prices in global markets, App Store revenue has bottomed out last September and is recovering its growth momentum."

This content was produced with the assistance of AI translation services.