Apple's $10 Billion Success in 2013

Apple's App Store had a very successful 2013, but there's one reason 2014 could be even better.

Jan 7, 2014 at 2:30PM

Apple (NASDAQ:AAPL) just announced today that sales from its App Store hit $10 billion in 2013, with $1 billion of that coming in December alone. That's a massive amount of sales for the company's vast ecosystem -- and the company's advantage over Google's app store is about to get even bigger.

Outpacing the competition
While Apple and Google (NASDAQ:GOOGL) are neck and neck when it comes to the amount of apps in their mobile stores, a report by Distimo last month showed that Apple users make up 63% of all app buying compared to 37% for Google Play users.

Apple App Store 
Source: Distimo

Apple clearly has a large lead over the Android maker, despite Google making some gains in the share of app purchases since June of last year, rising 7% in just five months.

Another interesting aspect of Apple's App Store announcement was that it has now paid out $15 billion to app developers. That's up from $7 billion from the same time a year ago. That's a strong lure for major app developers.

With its share of app purchases, $10 billion sales and a massive $15 billion paid out to app developers it's obvious that Apple's ecosystem is in great shape. But there's one opportunity in 2014 that could push Apple even further ahead of Google: China. 

Apple's new app advantage
Apple and China Mobile recently announced a partnership to release the iPhone on the world's largest carrier in just a few weeks. Analyst projections for how many iPhones sales this could add for Apple vary, but an oft-quoted estimate of 17 million units in 2014 is within reason. Apple's advantage isn't just that it's about to add potentially millions more iPhone users, but that Android users in the region are typically accessing apps from third-party app stores that don't count toward Google Play sales.

Over the past few months Apple has pulled apps from its app store in China because they violated the country's censorship laws, but focusing too much on censorship issues is a bit misguided. The top 10 best-selling apps this year in the App Store were games and in Apple's China App Store 90 % of sales come from games.

In its 2013 year-end report Distimo pointed out that Asian markets are showing the largest growth for apps and that China is one of the top three highest growth markets this past year, spiking by 280% in 2013. China is also the fifth-largest app revenue market in 2013. With Apple about to officially launch on China Mobile, the iPhone maker is poised to see even more success for its App Store in 2014.

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Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, China Mobile, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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