Apple's App Store set to eclipse global box office revenues

Asymco predicts people will spend $137 million a day on the App Store. Photo / 123RF

Apple's revenue from its app Store is set to overtake global box office revenues this year, it has been predicted.

The prediction, from Asymco, says people will spend US$100 million ($137m) a day on apps by the end of 2018.

And the "app economy" is still growing - with growth rates suggesting the iOS economy will achieve the half trillion revenue rate in 2019, according to the Daily Mail.

Apple said earlier this year customers around the world spent US$300m in purchases on New Year's Day 2018.

During the week starting on Christmas Eve, a record number of customers made purchases or downloaded apps from the App Store, spending more than US$890m in that seven-day period.

"We are thrilled with the reaction to the new App Store and to see so many customers discovering and enjoying new apps and games," said Phil Schiller, Apple's senior vice president of Worldwide Marketing.

"We want to thank all of the creative app developers who have made these great apps and helped to change people's lives.

"In 2017 alone, iOS developers earned US$26.5b — more than a 30 per cent increase over 2016."

The latest research, by Asymco's Horace Dediu, suggests the figures are only the tip of the iceberg for Apple.

"I've made comparisons before with the app business being bigger than the film industry, and much bigger than the music industry, he wrote.

"This was considering Android revenues and iOS combined as 'app revenues'.

"As of this year the App Store alone will overtake Global Box Office revenues."

"The App Store, and Apple services overall, is becoming one of the largest enterprises in the world."

Asymco also said that the economic impact of the app store goes far beyond app revenue.

"There are not only free apps but also many apps which are front-ends to complex services which are monetised in various indirect ways," Dediu wrote.

"Facebook, Twitter, Linkedin, Tencent, YouTube, Pandora, Netflix, Google, Baidu, Instagram, Amazon, eBay, JD.com, Alibaba, Expedia, Tripadvisor, Salesforce, Uber, AirBnB and hundreds of others are all 'free' apps enabling hundreds of billions of dollars of interaction none of which are captured in the App Store revenue data.

"By weight of users and their propensity to engage, iOS enables about 50% to 60% of mobile economic activity."

Based on assumptions of revenue rates for mobile services and iOS share of engagement, Deidu said his estimate of the economic activity on iOS for 2017 was about US$180b, and including hardware sales, the iOS economy cleared about US$380b in revenues over the year.