App Store Shatters Sales Records in 2014

Apple is having a banner year -- already. The iPhone maker set a new record for App Store billings in the first week of January. On New Year’s Day alone, customers around the world shelled out nearly $500 million, marking the single-biggest day in App Store sales history. And 2014 was also a record-breaking year. Billings rose 50 percent and apps sales generated over $10 billion in revenue for developers. All told, App Store developers have earned $25 billion from app and game sales since the app economy began -- and the potential for more growth is real.
We asked Roger Entner, principal analyst at Recon Analytics, for his thoughts on all the record breaking going on in Cupertino. He told us Apple has figured out how to capture the right app providers, and sales are clearly going gangbusters.
Paid Apps Selling Strong
“These sales are also a reflection that Apple is selling a lot of paid apps rather than mostly ad-supported apps like Google Play. Google offers a lot more ad-supported apps. That’s a big difference when you look at the monetization,” Entner said.
“Ten billion last year is a huge number by anybody’s estimation. The app economy is rapidly growing and the barriers to entry are relatively low. You just need a pretty basic computer and some programming skills and you can develop apps.”
Indeed, developers of all sizes, across the App Store’s 24 categories, are creating apps for iOS. Independent game creators, like the U.K.’s ustwo (maker of the Monument Valley); Australia’s Hipster Whale (creator of Crossy Road); and U.S. developer Sirvo (inventor of Threes!) are seeing plenty of revenue action.
“We could never have dreamed of this level of success, with Crossy Road only being available on the App Store for the last six weeks of the year,” said Matthew Hall, co-founder of Hipster Whale. “In a couple of months we were able to create a simple, fun game that was featured on the App Store and climbed to the top of the App Store charts around the world -- it’s amazing.”
Fueling Development Swiftly
According to Apple, an iOS 8 feature called Swift fueled developer innovation in 2014. Swift is a new programming language that works to make it easier for developers to create apps. iOS 8 also introduced the HealthKit and HomeKit frameworks. HealthKit lets health and fitness developers share data with the Health app. HomeKit is a framework that allows developers to create software that discovers, configures, communicates with and controls devices for home automation. iOS 8 also unleashed Metal, a graphics technology created to maximize the performance of Apple's A7 and A8 chips.
The App Store itself also got some new features for developers in 2014, such as app previews and app bundles; TestFlight for beta testing pre-release apps; an expanded Kids Category to showcase apps specifically made for children under 12; China UnionPay as a payment option for customers in China; and Apple Pay.
Apple reports that Apple Pay is gaining traction with customers, merchants and app developers. Some of the most popular apps including HotelTonight, OpenTable, Target and Ticketmaster use Apple Pay.
“The response we’ve seen from HotelTonight customers since the introduction of Apple Pay has been fantastic,” said Sam Shank, CEO, HotelTonight. “Our current customer  base is enjoying the convenience of Apple Pay and we’re continuing to see a growing number of new customers because of Apple Pay’s easy and secure approach to payments.”