It has become increasingly challenging to estimate the revenue generated by Apple’s App Store business, as it is often lumped in with other services on Apple’s balance sheet. Moreover, Apple has adjusted its commission structure, making it difficult to work backward from publicly available figures to narrow down its numbers. However, a recent report suggests that overall, the prices consumers are paying to engage with apps listed on the App Store have grown significantly – indicating that Apple’s own cut has likely increased as well.

Report Highlights:

A new report by app intelligence firm Apptopia indicates that the average price of in-app purchases (IAP) on the App Store has climbed 40% since last year, while Google Play IAP prices only saw a 9% increase during the same time frame. The firm analyzed pricing across both app marketplaces between July 2021 to July 2022 to reach its conclusions.

Impact of ATT Changes:

Apptopia suspects that Apple’s App Tracking Transparency (ATT) changes introduced in 2021 are behind the rising prices for in-app purchases. The increases kick in before inflation began to hit the economy hard in 2022, suggesting that app publishers were adjusting their rates in reaction to the increased effective cost per install (eCPI) resulting from ATT.

Data Supports ATT’s Impact:

To support this conclusion, the report cites data from measurement company Adjust, which shows how the growth in eCPI directly correlates with the IAP price increases. If the growing prices were more of a reaction to inflation than ATT, then it would be expected that similar trends would be seen across Google Play – but that’s not the case.

Google Play Comparison:

While it’s true that Google Play historically pulls in less overall revenue than the App Store through paid downloads, in-app purchases, and subscriptions, it still hosts a number of apps reliant on in-app purchases to monetize. However, Google Play’s average in-app purchase price increase was only in the single digits, compared with Apple’s 40%.

Impact on Different Types of In-App Purchases:

Apptopia’s new report also broke down how different types of in-app purchases were impacted by the price changes. It found that:

• The average pricing of iOS single-purchase in-app purchases grew 36% year over year.
• Other in-app purchases, including monthly and annual subscription options, grew only 19%.
• Navigation, Travel, Photo & Video, Sports, and Books were among the top iOS categories seeing the largest in-app purchase price increases.

Industry Implications:

This news follows another recent report that found ATT had helped boost Apple’s advertising business as well, allowing it to earn a spot amid the Facebook-Google duopoly. The findings suggest that app publishers are adjusting their rates in response to the increased effective cost per install resulting from ATT changes.

Conclusion:

The data indicates that Apple’s App Store business is experiencing significant price increases, linked to ATT changes rather than inflation or broader macroeconomic factors. As the tech industry continues to evolve, it will be essential for app publishers and developers to adapt their strategies in response to these changes.

Related Stories:

• Meta execs obsessed over beating OpenAI’s GPT-4 internally, court filings reveal
• TikTok users’ attempted migration to Chinese app RedNote isn’t going too well
• ChatGPT now lets you schedule reminders and recurring tasks
• DOJ confirms FBI operation that mass-deleted Chinese malware from thousands of US computers

Recommended Reading:

• Apple’s App Store Business Sees Significant Price Increases, Linked to ATT Changes
• The Impact of ATT on Apple’s App Store Business
• Adapting Strategies in Response to Changing Market Conditions