Every January, Apple releases the total amount of money that App Store developers have earned since 2008, a data point that allows analysts and Apple investors to get an idea of how much money the App Store makes.
This year’s disclosure suggests that Apple’s App Store growth has plateaued.
On Tuesday, Apple said it has paid $320 billion to developers, up from $260 billion as of last year, a jump of $60 billion. Developers receive between 70% and 85% of gross sales, depending on if they qualify for Apple’s reduced rate.
If all developers paid a 30% cut to Apple, Apple’s App Store grossed more than $85 billion in 2022, based on a CNBC analysis. If Apple’s commissions were all 15%, the App Store’s estimated gross would come in lower, around $70 billion.
It’s the same amount of sales as Apple suggested with its data point last year, when the company said it had paid developers $60 billion in 2021.
This is a rough estimation that could vary because it’s unclear how many developers pay the lower 15% cut, versus the 30% cut, and because the stats Apple shares are rounded.
Attempts to extrapolate the size of the App Store business from developer earnings are inaccurate, Apple said, because the commission ranges from 15% to 30%, and the vast majority of developers pay the lower commission under the App Store Small Business Program that gives a lower cut to app makers who gross under $1 million per year.
Apple said in its release that 2022 was a “record” year for the App Store, and revealed 900 million subscriptions, up from 745 million subscriptions in 2021. Apple’s stat includes anyone who subscribes to a service through Apple’s App store, not just its own first-party services like Apple TV+ and Music.
But Tuesday’s data point underscores that App Store growth slowed last year, which is important for investors because the App Store is a major part of Apple’s services business, and is a profit engine for the company.
Apple’s services business grew in fiscal 2022 to $78.1 billion, a 14% increase. But that was a significant slowdown from the 27% growth rate the division posted in fiscal 2021.
Apple is dealing with tough comparisons to elevated 2021 and 2020 app use and sales as people bought games and software while riding out the Covid pandemic. Apple is also facing consumer uncertainty around the world as interest rates rise and economists worry about a possible recession.
Morgan Stanley analyst Erik Woodring has been following slowing App Store growth. App Store net revenue decreased for six straight months from June to November, according to his data, before growing again in December.
Woodring wrote in a note this month that app sales will grow in 2023 because the year-over-year comparisons will be easier and as some app price increases in international markets late last year will start to benefit Apple.
“While App Store growth remains near its lowest levels in history, and we acknowledge the global consumer remains challenged, we are encouraged to see growth trajectory continue to improve after bottoming in September,” Woodring wrote.
Correction: Apple said in its release that 2022 was a “record” year for the App Store, and revealed 900 million subscriptions, up from 745 million subscriptions in 2021. An earlier version misstated a year.
Meta’s Mark Zuckerberg plans to visit South Korea, scheduling key meetings during the trip, according to a statement by Meta on Wednesday, which did not provide further details. Reportedly, Zuckerberg is anticipated to meet with Samsung Electronics chairman Jay Y. Lee later this month to discuss AI chip supply and other generative AI issues, as per the South Korean newspaper Seoul Economic Daily, citing unnamed sources familiar with the matter.
Alex Wong | Getty Images News | Getty Images
Meta extended its ban on new political ads on Facebook and Instagram past Election Day in the U.S.
The social media giant announced the political ads policy update on Monday, extending its ban on new political ads past Tuesday, the original end date for the restriction period.
Meta did not specify the day it will lift the restriction, saying only that the ad blocking will continue “until later this week.” The company did not say why it extended the political advertising restriction period.
The company announced in August that any political ads that ran at least once before Oct. 29 would still be allowed to run on Meta’s services in the final week before Election Day. Other political ads will not be allowed to run.
Organization with eligible ads will have “limited editing capabilities” while the restriction is still in place, Meta said. Those advertisers will be allowed to make scheduling, budgeting and bidding-related changes to their political ads, Meta said.
Meta enacted the same policy in 2020. The company said the policy is in place because “we recognize there may not be enough time to contest new claims made in ads.”
Google-parent Alphabet announced a similar ad policy update last month, saying it would pause ads relating to U.S. elections from running in the U.S. after the last polls close on Tuesday. Alphabet said it would notify advertisers when it lifts the pause.
Nearly $1 billion has been spent on political ads over the last week, with the bulk of the money spent on down-ballot races throughout the U.S., according to data from advertising analytics firm AdImpact.
Sam Altman, CEO of OpenAI, attends the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, January 18, 2024 (L), and Amazon CEO Jeff Bezos speaks during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021.
Reuters
Physical Intelligence, a robot startup based in San Francisco, has raised $400 million at a $2.4 billion post-money valuation, the company confirmed Monday to CNBC.
Investors included Amazon founder Jeff Bezos, OpenAI, Thrive Capital and Lux Capital, a Physical Intelligence spokesperson said. Khosla Ventures and Sequoia Capital are also listed as investors on the company’s website.
Physical Intelligence’s new valuation is about six times that of its March seed round, which reportedly came in at $70 million with a $400 million valuation. Its current roster of employees includes alumni of Tesla, Google DeepMind and X.
The startup focuses on “bringing general-purpose AI into the physical world,” per its website, and it aims to do this by developing large-scale artificial intelligence models and algorithms to power robots. The startup spent the past eight months developing a “general-purpose” AI model for robots, the company wrote in a blog post. Physical Intelligence hopes that model will be the first step toward its ultimate goal of developing artificial general intelligence. AGI is a term used to describe AI technology that equals or surpasses human intellect on a wide range of tasks.
Physical Intelligence’s vision is that one day users can “simply ask robots to perform any task they want, just like they can ask large language models (LLMs) and chatbot assistants,” the startup wrote in the blog post. In case studies, Physical Intelligence details how its tech could allow a robot to do laundry, bus tables or assemble a box.
To Barry Diller, a friend of Amazon founder Jeff Bezos, the decision for The Washington Post not to endorse a candidate in tomorrow’s presidential election was “absolutely principled” — and poorly timed, he said Monday on CNBC’s Squawk Box.
“They made a blunder — it should’ve happened months before, and it didn’t, and that’s the issue with it,” Diller said.
Diller is chairperson of both online travel company Expedia and IAC, which owns media platforms and websites like Dotdash Meredith and Care.com. He and Bezos appear to have been close friends for years, with Diller and his wife, fashion designer Diane von Furstenberg, hosting Bezos’s engagement party to fiancee Lauren Sanchez.
The decision not to endorse a presidential candidate in the 2024 race or for future presidential races came directly from Bezos, the paper’s owner, according to an article published by two of the Post’s own reporters.
The move prompted public condemnation from several staff writers, a flood of at least 250,000 digital subscription cancellations and the resignations of at least three editorial board members.
Bezos defended his position in his own op-ed late last month, calling the move a “meaningful step in the right direction” to restore low public trust in media and journalism.
“Presidential endorsements do nothing to tip the scales of an election,” Bezos wrote, emphasizing that the decision to not endorse a candidate was made “entirely internally” and without consulting either campaign. “I wish we had made the change earlier than we did, in a moment further from the election and the emotions around it.”
Diller said he spoke to Bezos following the decision.
“I think it was absolutely principled,” Diller said. “The mistake they made — and it was a mistake admitted by him — was timing.”