We are more willing than ever to buy digital products and this is good for Apple.
On average, Apple generated more than $ 1 billion a week from the more than 500 million people who visited its App Store each week in 2019, according to new data.
That’s $ 54.2 billion a year.
Following the queue (long)
There are many reasons for this, first and foremost a successful push towards subscription-based business models and a growing acceptance by consumers that there really is value in digital products.
This rebirth of digital involvement also generates new opportunities for companies that want to find customers where they are first, with digital experiences.
Subscription revenues increased in 2019, with several developers offering to allow users to test their apps before paying for the full set of features, according to data from SensorTower. The increase in subscription revenue shows that buyers will pay monthly fees for the application.
Promoting this type of perception has been one of the great challenges for the technology industry. In the early years, the success of Napster and file sharing showed what can happen to industries when people do not appreciate the digital product.
The subsequent success of iTunes, Spotify, Netflix, Amazon Prime and services such as iCloud and Dropbox has helped most users recognize digital value.
Now it generates massive money. App Store user spending rose 16 percent from $ 47 billion last year in 2018. Games totaled $ 37 billion, while entertainment apps accounted for $ 3.9 billion in addition.
We also see that sales of physical products are becoming more digital.
«People are more connected today than ever,» said Jason Woosley, vice president of products and business platforms at Adobe.
«We all have a smartphone in our pocket and that is what drives the growth of mobile commerce and e-commerce in general. You can think of something you need and buy it right then.
«This ever-active, ever-connected trend will continue to accelerate, especially as the definition of mobility continues to expand to new devices and ways of accessing the Internet.»
The best store
Apple recently announced that App Store developers have earned more than $ 155 billion in App Store sales in 2008. The company added that «more than a quarter» of those sales took place in the past year and confirmed that customers have spent $ 1.42 billion on the App. Shop between Christmas Eve. and New Year’s Eve 2019 – up to 16%. The App Store generated sales of $ 386 million on New Year’s Day 2020, Apple said, slightly more than the $ 322 million generated on the same day last year.
The trend is not simply visible in the Apple App Store; even Google Play saw an increase in revenue, although the amount generated by iOS was 85% higher than the $ 29.3 billion spent on Google Play.
The digital value chain
This avalanche of statistics shows that the perception of digital value is growing. (This is also evidenced by the news that Pokemon Go generated revenue of nearly $ 1 billion from in-game purchases last year alone.)
This should be important for business professionals trying to identify and deliver new business models and services.
Consumers’ willingness to pay for digital services shows that business models such as «information as a service», the expansion of digital channels and the sponsorship of key digital experiences are more likely to generate revenue, attract customers or improve relationships than ever before.
In an increasingly competitive environment, the provision of such services may be mandatory and there may be a path, given Gartner’s analysis that 84% of consumers who used digital tools and services in 2018 reported experiences. «Disappointing.»
This is what matters.
60% of companies that have been involved in digital transformation projects have also built new business models.
78% of customers use mobile channels to communicate with brands.
80% of millennials are more likely to buy from companies that have a mobile customer service portal.
The economy of attention is not completely stable. A better product or service can appear and quickly steal hard-won hearts and minds. This has always been the case in business, but the speed with which digital solutions can be developed and distributed means that competition is fast and the response needs to be more agile.
It is an intense environment.
«By 2022, 72% of customer interactions will involve emerging technology, such as machine learning, chatbots or mobile messaging, compared to 11% in 2017,» Gartner predicted in 2019.
Interestingly, Calm and Headspace became in December the applications with the highest earnings in the category of health and fitness on Apple and Android platforms.
Maybe all those directors of the «first digital» desperately needed some time to face the challenge of continuous transformation?
Although it is a more serious note, it also reflects the willingness of consumers to invest in a wide variety of technology-based services, even those that we do not often associate with «digital».