Apple (AAPL) App Store Revenues Surpass Google Play Again

AppleAAPL App Store has once again surpassed Alphabet's GOOGL Google Play in terms of revenues, per recently released report by Sensor Tower.

Per the report, for the first half of 2018 App Store revenues were $22.6 billion while that of Google Play were $11.8 billion. On a year-over-year basis, App Store recorded 25.8% growth while Google Play grew 29.7%.

However, Android's exposure in developing markets has helped app downloads for Google Play increase 13.1% year over year to 36 billion. App Store, on the other hand, improved 10.6% to 15 billion.

Nonetheless, App Store earned nearly double that of Google Play in spite of its app downloads being 2.4 times lower than that of Google Play.

The absence of Google Play in China is however not the reason for the lower revenues. TechCrunch, which quoted Sensor Tower, stated that even after excluding China, gross revenues for the App Store totaled $15.4 billion, which is nearly 30% higher than that of Google Play.

The report suggests that increase in spending for subscription-based applications such as Netflix NFLX , Tencent Video, Spotify SPOT , and Tinder among others, is a key growth driver.

Apple Inc. Revenue (TTM)

Apple Inc. Revenue (TTM) | Apple Inc. Quote

Apple's App Store Going Strong

The App Store, which just turned 10 years a few days back, has witnessed tremendous growth in these years. It currently has over 2 million apps compared with 500 when it just started.

The platform is also home to over 3,000 augmented reality apps. Besides, with the launch of Apple Watch, download of health and fitness applications have risen 75%.

We note that Apple's Services segment, which includes revenues from Internet Services, App Store, Apple Music, AppleCare, Apple Pay, and licensing and other services, has become the new cash cow for the company.

On the last conference call, management noted that App Store also generated record revenues, which reflect "the importance of our huge active installed base of devices and the loyalty and engagement of our customers."

Moreover, App Store is also benefiting iOS developers immensely as they have earned $100 billion from it as of the end of June 2018. Additionally, Apple's introduction of Everyone Can Code initiative in 2016, which encourages students to learn and write code, is intended to help it expand its developer base, going forward.

Apple currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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