IPhone users boost in-app spending
Games help Apple increase revenue as phone sales lag
With its iPhone sales declining, Apple is banking on phone-based subscriptions and services to be the company’s next big driver of growth. And the results of a report on spending within iPhone apps should give the tech titan evidence that its latest growth strategy is paying off.
In the report from San Francisco-based research firm Sensor Tower, the average iPhone user in the United States spent $79 on purchases within apps during 2018. That figure was 36 percent higher than the $58 the average iPhone owner spent on in-app purchases a year earlier.
The growth of in-app spending was more visible when compared with the figures between 2016 and 2017, when such purchases rose 23 percent.
“The clear message here is that in-app subscriptions, which appear in all of these categories’ top-grossing apps, are driving substantial per device increases in the amount spent by U.S. consumers on iPhone,” said Sensor Tower about the results of its research on in-app purchases.
The leading source of in-app spending came from games, which are known for offering their users the ability to purchase items to improve
their game playing and increase the amount of time they can spend playing games. Sensor Tower said that gaming made up 56 percent of iPhone inapp purchases, or $44 per average iPhone user.
But while gaming remained the biggest source of in-app revenue, the types of spending on such purchases continued
to branch out into other categories that are seeing even greater growth rates among iPhone consumers.
Spending within apps defined as “entertainment” surged by 80 percent, to $8 per iPhone user, while music spending climbed 22 percent, to $5. Social networking spending also increased by 22 percent, to $4.40 per user, and lifestyle inapp purchases surged by 86 percent, to $3.90.
Apple typically splits
revenue from app purchases and in-app spending with app developers. When Apple reported its fiscal first-quarter results Jan. 29, the company said revenue from services, which includes sales from subscriptions and in-app purchases, climbed by 19 percent from the prior year, to $10.9 billion. During the same period, Apple reported a 15 percent decline in iPhone sales.