Apple (AAPL) on Wednesday continued its full-throated defense of its App Store with the release of a new study focusing on small developers that have found success through the online marketplace.
Titled “A Global Perspective on the Apple App Store Ecosystem,” the study, which was conducted by the Analysis Group and funded by Apple, found that total billings and sales in the App Store grew by 24% year-over-year to $643 billion in 2020.
The new study also found that 90% of developers in the App Store could be classified as small developers, those that make less than $1 million a year or have fewer than 1 million downloads.
The study comes a little more than a week after Apple wrapped up its defense in its courtroom showdown with “Fortnite” maker Epic Games, which alleged the iPhone maker abuses its monopoly power of the App Store to the detriment of developers and customers.
Epic says it’s unfair that Apple requires developers to use its proprietary payment system when making sales through the App Store. Apple also requires developers that make more than $1 million a year to pay a 30% commission on app sales. Those that make less than $1 million pay 15%.
If Apple loses the case, it could be forced to change its fee structure, or allow third-party app stores on the iPhone, something the tech giant says could compromise user security.
A major part of Apple’s defense is that developers have a lot to gain from being on the App Store. Despite the App Store’s $643 billion in sales in 2020, the study says measuring the App Store’s impact by the sales it has facilitated undervalues the storefront significantly, because developers can monetize their apps in ways that don’t involve transacting through the store.
“These other monetization strategies include selling digital goods and services outside of the App Store that can be used within apps on Apple devices (employed by, for example, multiplatform apps and reader apps such as streaming, education, and enterprise apps), selling physical goods and services (employed by, for example, grocery delivery apps), and offering ad-supported content (employed by, for example, social networking apps),” the study reads.
The study also points to the success of companies that have created apps for iOS in the U.S. and in Europe, saying that 75 of those businesses have gone public or were acquired since 2011.
Apple has made defending its App Store policies a major priority, going so far as to put CEO Tim Cook on the witness stand during the Epic trial.
During his testimony, Cook called the App Store an “economic miracle” and said that opening up its iOS platform to third-party app stores would invite malware and lead to security complications for Apple’s customer base.
Apple doesn’t break out revenue from App Store commissions, instead lumping it together with its Services segment. Still, that business, which includes Apple TV+, Apple Music+, and iCloud subscriptions, pulled in $53.7 billion in 2020, or roughly 20% of Apple’s $274 billion in total revenue for the year.
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