We all know that Apple’s App Store makes lots and lots of money, but every now and then it still manages to surprise us. The app repository has shattered previous records, generating the whopping $10 billion in earnings in 2013.
What’s so impressive about this number is that it pretty much doubled 2012′s revenue estimate of $5 billion. December 2013 proved to be the most lucrative for the App Store, with over 3 billion app downloads and $1 billion in sales.
A lot of the sales can be attributed to the iOS 7 upgrade. A significant number of apps incurred update charges for the re-designs necessitated by the software update. The numbers indicate that there were plenty of users who were willing to fork over the cash to continue using their beloved apps on iOS 7, however.
Senior VP of internet software and services for Apple, Eddy Cue, had this to say about 2013′s resounding App Store success, “We’d like to thank our customers for making 2013 the best year ever for the App Store. We look forward to seeing what developers create in 2014.”
To date, developers who sell their wares on Apple’s digital marketplace have made over $15 billion.
Apple’s iPhone 5C may not have been the low-cost phone many had predicted, but the new device casts its own special magic: it has become THE iPhone for Android switchers.
You see, according to Kantar World panel ComTech, almost half of those purchasing an iPhone 5C are switching from other platforms, principally Samsung and LG. In other words, Apple’s iPhone 5C hits the sweet spot for millions of unhappy Android users seeking high-end device features at a reasonable price. As do iPads.
I’d speculate these are people who didn’t pick up iPhones before because they were just a little too expensive. They took a look at the low end Apple iPhones then available to them only to reject them, and chose to dance with an Android, convinced by the heavy and merciless all-channel marketing surrounding products using that OS.
These customers were promised experiences that matched an iPhone, but the sales pitch didn’t match the reality. The price was right, but the experience failed to meet the aspirations of these people. Now they’ve used Android and are ready to upgrade they are happy to choose an iPhone 5C because it’s a completely new phone (a much improved iPhone 5) that’s available at a price that competes with high-end Androids: You can pick up an iPhone 5C free with contract on some carriers.
The cheaper 5C appeals to a broader audience than Apple usually attracts. In the US, the biggest demand for these mid-end models is coming from lower income households. Some 42 percent of iPhone 5C owners earn less than $49,000 compared with just 21 percent for iPhone 5S,” said Dominic Sunnebo, strategic insight director at Kantar. The one thing Sunnebo doesn’t point out is that these lower income households couldn’t afford to waste their previous investments in second-rate user experiences. Android vendors will be hard-pressed to convince such people to sample their products in future.
At retail, as in the courts, Apple has regained momentum in the US, where it hit a marketshare of 52.8 percent in October in contrast to 35.9 percent in the three months to September.
These things haven’t been a magic bullet in all markets: In the UK and Europe cash-strapped consumers continue to feel the pinch, despite the hollow promises of their disconnected political class.
That’s the background that means Android devices — available at deep subsidy from multiple carriers desperate to shore up their bottom line as voice call revenue plummets — account for 70.9 percent of European smartphone sales. Apple took just 15.8 percent in Europe, though its new iPhones did cause an uptick in sales at the expense of Android devices.
Apple is attempting to respond to Europe’s failing economies by making it easy for consumers to purchase its products. This week it announced a zero-financing deal on new hardware products acquired via European online retail stores.
Kantar Worldpanel ComTech is not seeing a trend in which iPhone users are abandoning iPhone for Android, despite Eric Schmidt’s reality distortion.
Android owners continue to dump the platform in favor of iOS. The iPhone 5C is the perfect stalking horse to tempt them into Apple’s ecosystem. That’s important because the superior customer experience iPhone users get makes them extremely platform loyal. Kantar reveals 80 percent of iPhone 5S owners have upgraded from a previous iPhone while 22 percent of Android users plan to switch to iPhone.
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