As thoroughly explained this morning in Mark Gurman's (Bloomberg's Apple Analyst) Power On newsletter, the App Store started off as a pretty simple idea back in 2008. Developers could create apps, sell them to iPhone users, and keep 70 percent of the money. Apple took care of the tools, the platform, and support. It was a fair deal back then, and it helped kick off the modern app economy.
As time went on, the App Store helped launch some of the biggest tech companies we know today, like Uber, Spotify, and Snap. These companies were able to scale because of their presence on iOS, showing just how powerful Apple’s ecosystem had become. The App Store shifted from a marketplace for indie developers to a critical platform for billion-dollar businesses.
But fast-forward to today, and Gurman explains that the way Apple makes money from the store has changed quite a bit. These days, almost none of the revenue comes from people paying to download apps. Instead, around 99 percent of it comes from what users buy inside the apps themselves.
That includes subscriptions, game content, and digital goods, all of it available with a single tap. For users, it’s easy. They don’t have to type in credit card numbers or deal with other payment services. Everything is handled in one place through Apple’s system, including billing and subscription management.
Developers also benefit in some ways. Apple manages payments, offers support, and promotes apps. It also provides tools like analytics and Family Sharing. But in exchange, Apple takes a cut. It’s 15 percent for smaller developers and 30 percent for the bigger ones. That fee in particular has become a hot topic, with many developers saying it’s too high, especially when other services like Stripe or PayPal charge closer to 3 percent.
Apple brags about the iOS app economy on its developer website. | Image credit — Apple
Apple argues that its commission includes more than just payment processing. It covers fraud prevention, customer service, app promotion, and seamless integration across Apple devices. Still, not everyone feels that justifies the extra cost, especially for companies doing high volumes of in-app purchases.
Recommended Stories
Even with the pushback, the App Store remains a huge part of Apple’s business. And as Gurman points out, it’s not just a store anymore. It’s one of Apple’s most profitable platforms and a key piece of its $3 trillion empire. Whether the model will change under pressure from developers and regulators is still unclear. But for now, it continues to bring in billions every year.
What’s clear to me is that the App Store’s story is far from over. Apple may have to adapt its approach as competition grows and rules shift around the world. But after more than 15 years, the platform remains a core part of how Apple shapes the tech industry, and how developers connect with users everywhere.
Johanna 'Jojo the Techie' is a skilled mobile technology expert with over 15 years of hands-on experience, specializing in the Google ecosystem and Pixel devices. Known for her user-friendly approach, she leverages her vast tech support background to provide accessible and insightful coverage on latest technology trends. As a recognized thought leader and former member of #TeamPixel, Johanna ensures she stays at the forefront of Google services and products, making her a reliable source for all things Pixel and ChromeOS.
A discussion is a place, where people can voice their opinion, no matter if it
is positive, neutral or negative. However, when posting, one must stay true to the topic, and not just share some
random thoughts, which are not directly related to the matter.
Things that are NOT allowed:
Off-topic talk - you must stick to the subject of discussion
Offensive, hate speech - if you want to say something, say it politely
Spam/Advertisements - these posts are deleted
Multiple accounts - one person can have only one account
Impersonations and offensive nicknames - these accounts get banned
Moderation is done by humans. We try to be as objective as possible and moderate with zero bias. If you think a
post should be moderated - please, report it.
Have a question about the rules or why you have been moderated/limited/banned? Please,
contact us.
FCC OKs Cingular\'s purchase of AT&T Wireless
Things that are NOT allowed: