The Apple Ecosystem Approaches $2 Trillion
by Horace Dediu
The iPhone maker is trading at 2.5x its ecosystem value and 1.5x its economic impact
Apple today announced the global App Store ecosystem facilitated over $1.4 trillion in developer billings and sales in 2025, according to a new study by economists at Analysis Group. For more than 90 percent of the billings and sales facilitated by the App Store ecosystem, developers did not pay any commission to Apple. Since 2019, the size of the App Store ecosystem has nearly tripled, as the App Store remains the safest and best place for users to discover and download apps. .
Source: Apple
Bill Gates once said you have a platform when other people make more money from it than you do.
In other words, success is if there is more value created on top of it than captured from it.
Few platforms qualify but Apple's certainly does. Apple's ecosystem is shown in the graph below.
Apple's direct payments to developers were about $126.7 billion but, as the Analysis Group report shows, Apple and the developers enabled transactions dwarfing app store transactions. In 2025 Apple captured a tiny fraction of the economic activity it induced on its platforms (about $57 billion out of $1.437 trillion or 4%).
Combining the billings and sales facilitated by the App Store and Apple's direct sales of products and services leads to a total of over $1.8 trillion. I call this the Apple Ecosystem (Apple + App Store.)
But that's not everything. There are lots of economic activities on the platform that do not involve the App Store. Activity on browsing and social media and messaging apps probably add another 50% on top of this, perhaps even 100%. I call this the Apple Economy (Apple + App Store + All other transactions.)
Ultimately, the 1.4 billion Apple users using 2.5 billion devices are likely inducing as much as $3 trillion of economic activity.
It seems to me that we need a way to measure a multiple of this activity as perhaps a fundamental metric of value creation.
At $4.57 trillion current market cap, the value is only 2.5x its ecosystem and 1.5x its economic footprint.
These activities may not benefit shareholders directly but they are a measure of the resilience of the platforms insofar as other parties are benefiting and relying on the platform for their economic lives. Moreover, the switching costs or absence of frictionless alternatives means there is a huge downside to interfering with the platform. This measure is a carefully worded caution not just a celebratory pat on the back.
10 comments
deemery ·
How will AI change this? Would AI enable the construction of many new apps by independent developers, that make use of both on-device AI and cloud AI? Or will 'agentic AI' replace individual apps, with the revenues devolving to the agent providers? I dunno.
Horace Dediu ·
AI is a new class of apps or services which will be paid for in similar ways (subscription). The iOS and other *OS platforms are very simple in their business logic: provide discovery and distribution and customer aggregation/segmentation to developers and privacy, safety and trusted environment for users. It's the place everyone goes to do business. The simplicity of this model is what confuses everyone.
jagtapl ·
My prediction is talented h1 or green card developers ones who are returning back from USA, have opportunity to adopt to "Apple economy" by being apple developer in India. Post pandemic I am seeing enough signals that Apple is growing its developer outreach in India very aggressively. Plus also in the rest of the world.
farshad ·
One advantage of Apple over many other ecosystems is its global reach. You never know which country would be the leader du jour. India has a good chance to be next.
AAPL ·
Agreed. If they can’t stay in the USA they can certainly sell their apps to anyone in the world from India or anywhere. The Apple economy is where the world’s best customers are so choosing it over Android is easy.
jagtapl ·
Today I noticed the CFO Kevan Parekh title on LinkedIn profile as "Finance and Product Marketing" in his profile. I am speculating that he is being groomed to take on the Greg "Joz" Joswiak role. On LinkedIn he is meeting developers in Bangalore, Singapore as per posts developers.
Sacto Joe ·
This is a remarkable summation of Apple's "worth" to its customers, and it's based on the trust Apple has earned from those customers. It's stunning to me how much animosity there is in governments to the Apple App Store considering what the customers are getting back compared to the very small relative financial reward (4%) Apple is given back for their efforts.
Yes, they are rewarded with high margins for their products and services, but that's a separate animal from the App Store.
Is this a case where Apple needs to be blowing its own horn a lot louder than it is?
FredHS ·
Thanks Jagtapl, for confirming what I had only guessed/hoped was happening and will continue.
FredHS ·
Horace thanks for deriving that 4% number.
I wonder though, if there is undercounting in the "digital goods and services" part.
From Google's AI; "Industry estimates suggest that over 75% to 80% of total video and music subscription revenue is paid outside the Apple App Store, driven by major services (like Netflix, Spotify, and YouTube) utilizing web-based sign-ups to avoid paying Apple's in-app purchase commissions"
This seems fair. In these cases, Apple platforms are mainly passive and the brands have strong direct customer loyalty.
deemery ·
I'd put a different twist on this. Major brands have a strong financial incentive to avoid Apple's in-app purchase 'tax'. I'm not arguing for or against Apple's terms. I'm just pointing out there's a strong incentive to avoid paying that.