Analyst: Third-party apps, App Store to help drive Apple iPhone, iPod touch sales

“Third-party applications will differentiate the iPhone from a growing number of its smartphone competitors, according to Goldman Sachs analyst David Bailey,” Jonathan Ratner reports for The Financial Post.

“‘We think that Apple’s use of Mac OS X on the iPhone, which is the same operating system used with Macs, combined with Apple’s software development toolkit (SDK) specifically designed for the iPhone, provides a more robust application development environment for developers,’ he told clients,” Ratner reports.

“The App Store’s layout and distribution system should result in a better user experience and drive higher adoption rates than existing platforms, Mr. Bailey said… He expects to see small ‘widget-like’ applications offered for free or at costs ranging from 99¢ to $2.99, along with large and more sophisticated applications likely between $19.99 and $29.99,” Ratner reports. “Apple retains 30% of this revenue, while developers get the other 70%.”

“The App Store will make a [significant] contribution to Apple’s earnings in 2009, with roughly US$120-million in incremental net revenue and US10¢ in earnings per share. He expects these numbers will climb to around US$280-million and US20¢ in 2010,” Ratner reports. “Goldman sees the active installed base for the iPhone climbing from around 2 million at the end of 2007 to roughly 9 million by the end of 2008, jumping to approximately 20 million and 30 million by the ends of 2009 and 2010, respectively.”

Full article here.

Wherever you see “iPhone,” add “iPod touch.” Then extrapolate. grin

23 Comments

  1. Yeah, this report should be titled, “Captain Obvious and the Kingdom of the Crystal Numbskull” but not everyone follows Apple as closely as we all do. It’s good for casual observers to read a bullish report on the company, especially since it mentions software as a differentiating factor that will help thwart all the “iPhone killer” wanna-bes.

  2. The app store is a game changer. I will fall in love with the iPhone all over again. After a year I still find myself mesmerized by it, like yesterday when I performed an annual task that normally would’ve been incredibly boring had it not been for TV shows, movies and the web on my iPhone.

    I don’t care about the 3G iPhone so much as the third party apps.

  3. My first response was “Yeah, tell us something we don’t know.” But, really folks, can this message be said too often? Each of these analysts have a different group readers. It sounds like an echo chamber here, but most people in each of the analysts’ direct audiences are hearing these predications for the first time.

    I say LET THE MESSAGE RING OUT! ACROSS THE LAND! TO ALL PEOPLES!

    Oh, sorry, lost my mind for a moment.

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