Apple’s iOS App Store now makes over $1 billion in profits per year

“The Apple App Store has been extraordinarily successful with third-party apps, having reached the 50 billion download mark earlier in May. However, Apple CFO Peter Oppenheimer mentioned in 2010 that the App Store operated a bit over break-even. As well, Piper Jaffray’s Gene Munster estimated in July 2011 that Apple only made $292 million in profit from 15 billion downloads,” Elephant Analytics writes for Seeking Alpha. “The prevailing wisdom since then was that the App Store only plays a minimal direct role in Apple’s profitability and serves mainly as an incentive to purchase Apple hardware due to the strong ecosystem. We are going to show that this situation has changed and that the App Store is playing an increasingly significant role in Apple’s profitability (although still fairly small percentage wise). Note that we are only focusing on third-party apps in this article, and not addressing Apple’s own software sales or other items.”

“At around 2 billion downloads per month (25 billion per year), Apple makes $1.55 billion in gross margin per year,” Elephant Analytics writes. “Of course there are additional costs involved with maintaining the servers and building out additional App Store features, as well as customer service costs. However, it seems fair to say that Apple makes over $1 billion per year from third-party apps in the App Store even if all that is factored in.”

Much more in the full article here.

[Thanks to MacDailyNews Reader “Carl H.” for the heads up.]


  1. That’s because iOS users actually buy those apps. AndyBot users only get free apps because they are cheapskates. And since no one makes apps for CopyBot, they are all rip offs of real iOS apps!

    1. not for free, you still need to pay Apple $100/y to have access to the AppStore. iTunes/AppStore has now become a cash cow for Apple, I think its high time they start showing some love for developers

    2. free? those “free” apps are paid for by your personal information and wasting your time with annoying ads. Nothing free at all about them. Apple would be better off hosting ad-free trailware (of course, it never will, because now Apple cares more about making money than providing the best user experience possible).

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