Apple Says Developers Earned 30% More From App Store in 2017

(Bloomberg) -- Apple Inc. developers who make apps for the iPhone and iPad earned 30 percent more in 2017 than a year earlier, though it was still a slowdown from growth in 2016.

Developers who make apps for iOS earned $26.5 billion in 2017, Apple said in a statement Thursday, as users snapped up breakout hits including games like Animal Crossing: Pocket Camp, and Monument Valley 2. In 2016, developers earned $20 billion, a 40 percent increase from the year earlier.

Apple said its App Store had a record-breaking holiday season, culminating with $300 million in purchases made on New Year's Day 2018, up from $240 million in the prior year. Developers typically get 70 percent of that revenue, though the proportion increases to 85 percent after customers have completed a year's subscription to an app. Consumers spent more than $890 million over the seven days starting on Christmas Eve.

App Store sales growth may serve as an indicator of iPhone demand, since new owners are more inclined to spend money in the marketplace in the days after they get a new handset. Investors are playing close attention to any indicators of demand for the iPhone X ahead of Apple earnings on Feb. 1, when the average sales price the company publishes will indicate whether customers are preferring the $999 top-of-the-line handset to cheaper models.

Apple has been prioritizing its services business, which includes the App Store, as global smartphone sales slow. Services usually generate more profitable revenue, and also tie users more closely to their iPhones.

To contact the reporter on this story: Alex Webb in San Francisco at awebb25@bloomberg.net.

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Molly Schuetz, Andrew Pollack

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