Apple News users reach 100 million, App Store sales rise

(Reuters) - Apple Inc's AAPL.O news service has reached 100 million monthly active users and customers spent more than $1.4 billion in the App Store between Christmas and New Year, the latest signs of growing revenue from the iPhone maker's services business.

FILE PHOTO: The Apple logo is shown atop an Apple store at a shopping mall in La Jolla, California, U.S., December 17, 2019, 2019. REUTERS/Mike Blake

With demand for smart phones and other hardware peaking, Apple has been striving to boost sales from purchases of apps and subscription services like its newly launched Apple TV+ streaming service or Apple Care maintenance packages.

The company said that between Dec. 24, 2019, and Jan. 1, 2020, its customers spent $1.42 billion in the App Store, a 16% increase over the previous year, and $386 million on Jan. 1 alone, a 20% increase.

The number of users of the News app rose nearly 18% from a year ago, although the company did not break out subscriber numbers for the Apple News+ service, which costs $9.99 per month.

The numbers also point to a big shift in spending in the Thanksgiving to Christmas holiday season in the United States, with consumers splurging on apps and online shopping rather than in brick-and-mortar stores.

Mastercard Inc's MA.N data tracking retail sales from Nov. 1 through Christmas Eve showed U.S. shoppers spent almost a fifth more online during this year's holiday shopping season than a year ago, accounting for 15% of all retail sales.

The App Store growth numbers were roughly in line with the overall trend for Apple’s services segment revenue, which rose 16% to $46.3 billion in its most recent fiscal year ended in September. In comparison, iPhone sales fell 14% to $142.4 billion in the same period.

Apple keeps between 15% and 30% of the sales through its App Store, depending on whether users buy software as a one-time purchase or recurring subscription.

The company launched several new services in 2019, including the streaming service, a video game service and a credit card.

Shares of the company were marginally down in early trading.

Reporting by Stephen Nellis in San Francisco and Neha Malara; Editing by Christopher Cushing and Patrick Graham