“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.]