As Usual, Apple's App Store Revenue Leads Google Play in Third Quarter

Over a decade after Apple (AAPL -0.35%) launched the App Store, the growth days still aren't over. Overall mobile consumer spending in the third quarter jumped 23% to hit $17.9 billion, according to new estimates released this week from mobile-analytics specialist Sensor Tower. That spending includes revenue from upfront purchases, in-app purchases, and subscriptions.

Expectedly, Apple again beat out Google Play in terms of monetization, even as the Alphabet (GOOG 9.96%) (GOOGL 10.22%) subsidiary enjoyed far greater smartphone market share.

Image source: Apple.

More revenue on fewer downloads

The App Store brought in gross revenue of $14.2 billion in the third quarter, up from $11.6 billion a year ago. In comparison, Google Play revenue grew 24% to $7.7 billion. In other words, Apple represented roughly 65% of all spending on mobile platforms, with Google representing the other 35%, despite the fact that it powers over 75% of all mobile devices globally, according  to StatCounter.

Furthermore, Google Play enjoyed almost three times as many first-time app installs in the third quarter compared to Apple, again underscoring how much weaker monetization is on Android. The search-giant's platform is more popular in emerging markets where consumers have less discretionary income.

Data source: Sensor Tower.

Note that Sensor Tower's estimates represent gross revenue, while Apple and Google only recognize the net revenue they receive as commission in their financial accounting. Both companies take a 30% cut of digital sales including in-app purchases, while that cut drops to 15% for long-term subscriptions. Apple includes App Store results in its services business, while Google Play is aggregated within Google's other revenues. Neither company has reported third-quarter results yet.

Games are the bulk of spending 

Mobile gaming continues to be incredibly important to the industry, accounting for an overwhelming 74% of spending. That's down modestly from the 76% share of mobile spending that games represented a year ago.

Apple users opened their wallets more for mobile gaming than their Android counterparts, with the App Store generating $9.8 billion in revenue from that category. Google Play brought in $6.5 billion from games, according to Sensor Tower's data. Google Play saw roughly 8.7 billion mobile-game downloads, towering over the App Store's 2.4 billion mobile-game downloads.

Data source: Sensor Tower.

Apple has always enjoyed a significant advantage over Google in terms of app monetization, which the Mac maker likes to frequently point out to developers. The company has paid out a cumulative $120 billion to developers since the App Store launched in 2008.