Business in Tech

China Overtakes The US In iOS App Store Spending

One piece of news that wasn’t much reported when Apple reported its earnings figure is that the Chinese market is now its biggest one with respect to iOS App Store spending. According to mobile analytics and research firm App Annie, spending by Chinese in the last quarter stood at $1.7b which makes it ahead of the United States by 15 percent. Americans spent $1.45b in Apple’s iOS App Store in the quarter in which Apple eventually recorded a drop in revenue for the first time since 2001.

app-store-revenue-chart

 

“While revenue from Games accounts for the majority of revenue generated in China, other prominent categories like Entertainment and Social Networking are making strides and have more than tripled in the past year”

It looks like Chinese consumers are buying mobile games at rates we have never seen before and while the games they seem to be interested in were not listed, one obvious one was. Pokémon Go was a real gaming phenomenon this past summer. It took the entire world by storm by breaking download records and netting about $600m in sales. The augmented reality (AR) based game was first available in US, Australia and New Zealand before spreading to other markets eventually.

Apple services include the App Store, Apple Care, Apple Pay, Apple Music and the Cloud. Services showed an increase in revenue. Back in April, revenue from Apple’s service now stands at $5.99b/ which represents a 20 per cent year on year increase. In this quarter, revenue from Apple services stood at $6.33b versus $6.11b — a 25% year-over-year increase and this is the first time it will be going above the $6b mark.  Tim Cook in an address said Apple’s services business could  become the size of a Fortune 100 company in fiscal 2017.

It now looks like Apple’s bet on China is paying off. Apple has invested a lot in China including in Didi; an Uber rival to which Uber later surrendered last August. Apple reportedly placed a $1b bet on Didi and it looks like that paid off. This comes as western tech companies have found it difficult to break into the Chinese market and this may be why many of them are focusing on the other big Asian giant, India.