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Apple's App Developer Base Hits 20M, Competition Intensifies

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Per the latest information from Apple’s (AAPL - Free Report) Worldwide Developers Conference (“WWDC”), App Store is gaining momentum as the number of app developers and visitors grow rapidly.

At WWDC, the company’s CEO, Tim Cook, revealed the number of registered developers on App Store which is 20 million at present.  Notably, Apple’s programming and coding language named Swift has gained popularity among developers. There are more than 350K apps written in Swift on the App Store.

Further, Apple witnesses almost 500 visitors on App Store every week, due to its strong portfolio of apps. Moreover, the App Store is significantly lucrative for the developers, as they have generated $100 billion in revenues from their apps on the store.

We believe the company’s consistent focus on updating iOS and adding new advanced features is the key catalyst behind attracting developers. This will enhance the quality as well as increase the number of apps in the store, which in turn is anticipated to improve the number of visitors further.

Enhancing Apple Services

Apple’s strong focus toward development of App Store and innovation of its ecosystem for developers will continue to strengthen Apple Services.

Last quarter, the services segment accounted for 15% of Apple’s total revenues and improved 31% year over year.

At WWDC, the company has rolled a new feature for the app developers called Create ML which will enable the developers to leverage the power of machine learning.

Additionally, the company has reframed its policies related to free trials of apps. Now, the app developers are allowed to provide a free trial of both subscription and non-subscription based apps to the end users.

The new features and policies will continue to attract developers to its platform.

Intensifying Competition

Along with Apple, there are other major players in this sector namely — Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) and Alphabet’s (GOOGL - Free Report) Google.

In the world of app stores, Google’s Play Store is leading the market but Apple’s app store and Microsoft’s Windows Store are also catching fast.

Per the latest data from Statista, the total number of apps on Play Store was 3.8 million at the end of the last quarter. The figure for Windows Store was 669K and that for Amazon was 430K.

In the meantime, Apple App Store has been gaining momentum since its inception in 2008. It is the second largest store after Google Play Store with 2 million apps over the same time frame.

Further, in terms of apps downloads, Play Store exceeded 19.2 billion downloads in first-quarter 2018 while App Store witnessed 8.2 billion downloads, which narrowed down its gap with the former by 10 percentage points on a sequential basis.

Moreover, consumer spend on Play Store was more than $5 billion but below $10 billion, while it exceeded $10 billion on the App Store.

Microsoft, in order to attract more developers to its platform, has reformed its policies and now it allows the developers to keep 95% of their app revenues which is a huge change from the previous 70%.

Meanwhile, Apple and Google offer 70% of app revenues to the developers and increase it to 85% in case of more than one year of subscription of the app.

Currently, Apple carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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