Apple breaking new records with App Store sales

Apple App Store continues fast-paced growth

Apple’s (AAPL) revenues from its App Store business increased by 36% year-over-year in fiscal 4Q14. But it appears the App Store is set to grow at an even faster rate once Apple announces its fiscal 1Q15 earnings.

A few weeks ago, Apple released a press release announcing a record-breaking 2014. App Store billings rose by 50% and apps generated over $10 billion in revenues for developers.

Apple breaking new records with App Store sales

It’s a well-known fact that Apple takes a 30% cut from developers selling via the App Store. This means Apple would have earned about $4.3 billion from the App Store business in 2014. But Apple doesn’t report App Store revenues separately. Instead,  iTunes, App Store, and Software revenues are reported together.

The chart above shows that this segment’s revenue growth has slowed in the last few quarters. With the stellar growth from the App Store in the December quarter, however, the overall segment could increase in fiscal 1Q15.

Apple benefited from its partnerships with IBM and Microsoft

It’s surprising to discover that Apple beats Google (GOOG)(GOOGL) when it comes to revenues earned from the companies’ respective app stores. That’s because Google simply dominates the smartphone operating system market with more than an 80% share.

Yet, according to a report from App Annie Intelligence, Apple’s app store revenues were 60% greater than Google’s app store revenues in the third quarter of 2014. Meanwhile, the number of downloads from Google’s store was 60% higher than the downloads from Apple’s store.

Apple is also benefitting from its partnerships with IBM (IBM) and Microsoft (MSFT). For example, a few months after forging a partnership, Apple and IBM released a set of ten apps specifically designed for enterprises. Apple also agreed to launch the Microsoft Office app on iPad, a decision that Apple itself admitted would help grow its App Store business.