By David Z. Morris
January 6, 2018

In the past couple of years, it has occasionally been said that smartphone apps are dead, peaking, or not worth creating at all. But if you’ve been holding on to that amazing app idea, all is not lost – according to a new report, app revenues on Apple’s App Store and Google Play surged by a staggering 35% from 2016 to 2017, and new installs are up 13.5%.

The data insights firm Sensor Tower claims that worldwide mobile app revenue, including both Android and iPhone apps, totaled $58.6 billion in 2017. That total includes both paid downloads and in-app purchases, but not mobile commerce purchases such as GrubHub orders or Uber rides. In 2016, the same number, according to Sensor Tower, was $43.5 billion.

Those numbers square with what we already know about 2016 App Store revenue, which were estimated at $28 billion by McQuarrie, based on Apple statements about developer earnings. Both Apple and Google keep 30% of most earnings through their app stores.

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Revenue grew roughly evenly for Android and iPhone. But app downloads grew much faster for Android – 16.7% – than for iPhone, at just 6.7%. According to Sensor Tower, that’s because of Android’s dominance in developing economies.

The steady growth in App Store revenue is great news for Apple, which increasingly relies on digital and service sales. iPhone sales plateaued for a time in early 2016, presaging market saturation for the devices that have made Apple a goliath.

The launch of the iPhone 8 this year has generally been regarded as a success, but some reports claim it undersold its predecessor, the iPhone 7, early on. That picture was complicated by the possibility that some buyers were waiting for the release of the ultra-premium iPhone X, but it nonetheless seems clear that, if it’s going to keep shareholders happy, Apple needs all the Candy Crush dividends it can get.


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