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Why the App Store generated 85% more revenues than Google Play

Puneet Sikka

MacBook Pro and MacBook Air help Apple to gain PC market share (Part 2 of 4)

(Continued from Part 1)

The App Store generated 85% more revenue than Google Play

Apple’s (AAPL) iTunes, Software & Services business includes the  iTunes Store, the App Store, and the iBooks Store for purchasing and playing music, movies, TV shows, podcasts, books, and apps. Apple announced its fiscal Q2 2014 earnings on Wednesday, in which its revenues from this business increased by 11% year-over-year to reach $4.6 billion. During the conference call to announce fiscal Q2 earnings, Apple mentioned, quoting App Annie as the source, that the App Store generated 85% more global revenue than Google (GOOG) Play in the March quarter.

Apple generates more App Store revenue than Android despite comparatively smaller presence in smartphone market

According to IDC, Android share in the global smartphone operating system market, in terms of shipments, increased from 69.0% in 2012 to 78.6% in 2013, while that of Apple’s iOS declined from 18.7% to 15.2%. The other smaller players in this market are Microsoft’s (MSFT) Windows Phone (which acquired Nokia’s (NOK) mobile business) and BlackBerry (BBRY), but Android is way ahead of all. This large disparity in market shares between Android and iOS makes it even more surprising that App Store almost generated double the revenues compared to Google Play.

iTunes and App Store revenues doubled in China

The company’s iTunes stores generated record billings of $5.2 billion in the March quarter, up 24% year-over-year driven by strong growth in App Store sales. These iTunes billings translated to quarterly iTunes revenue of over $2.6 billion, up 9% from the year ago quarter. Software and services revenue was over $1.9 billion, up 14% from a year ago. This growth in iTunes and App Store revenues is stronger in China, where it more than doubled over the last year.

Apple has a staggering 800 million iTunes accounts

According to Apple’s management, “iTunes software and services revenue continue to grow at a double-digit rate, thanks to an incredible ecosystem and our very large, loyal and engaged customer base. With its strong momentum in growing profitability, iTunes is a very important driver of our business not only here in the United States, but around the world. We now have an almost 800 million iTunes accounts, most of these with credit cards. This is a staggering number.”

Continue to Part 3

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