In its official press release announcing the news on Monday, Apple used quotes from developer partners to highlight its platform advantage. Autodesk SVP Amar Hanspal said his company is “using the Mac App Store to deliver new products and reach a growing base of new Mac customers,” and Pixelmator’s Saulius Dailide said that offering their version 2.0 software “exclusively on the Mac App Store allows us to streamline updates to our image editing software and stay ahead of the competition.”

Apple also took time to talk about the success of the iOS App Store, which it says has over 500,000 apps presently, and which has seen more than 18 billion app downloads in total, at a rate of more than 1 billion apps per month. The iOS App Store caught on much faster than the Mac App Store, however, at least in terms of downloads: Only nine months after its launch, it had already reached 1 billion downloads.

The Mac App Store also doesn’t offer nearly as large a library; according to the latest count by AppShopper.com, there are 8,459 apps available on Apple’s OS X software store. But there are some caveats that go a long way toward explaining why the Mac App Store’s growth rate is slow compared to its mobile cousin. First, the Mac App Store is available only on Macs running OS X Snow Leopard or later, so it isn’t on every active Mac computer out there. Second, the Mac App Store isn’t the exclusive software distribution channel for Mac apps, the way the iOS store is for Apple mobile devices (unless you jailbreak).

For a PC software market, the Mac App Store is still a huge success, and will likely continue to grow as it ships on future Macs and increasingly becomes a go-to resource for customers looking to get new apps on their machines. Apple’s ability to attract top-tier developers away from direct web distribution models will also be a key factor in helping it expand its library.

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The App Store is a bit of rolling sea of pricing turmoil, according to madvertise’s findings in the U.K. App Store, with regular highs and lows that make shopping on certain days more advisable than on others. Fridays turn out to be the best possible time to spend your hard-earned cash, since 19.58 percent of iPad and 18 percent of iPhone app prices on average see a drop just before the weekend, and none of the top five categories of apps see any price increases on a Friday.

Don’t jump the gun and think you can get away with buying earlier, though; Thursdays are the worst possible day to shop, with 17.9 percent of iPad and 17.36 percent of iPhone apps showing an increase in price that time of week. Thursdays are good for one thing, however, since along with Wednesdays it’s the most common time for new apps to arrive in the App Store. Updates also come most frequently on Thursdays, with Tuesdays coming in a close second.

Madvertise’s study, which it created in conjunction with AppZapp, a bargain-hunting tool for App Store shoppers, concludes that Friday is the best day to shop for apps. That’s not too surprising, since a lot of publishers seem to promote their wares with weekend sales in order to lock in lucrative positions high up in the App Store rankings.

All bets are off during this weekend, owing to Black Friday, but there’s little reason to doubt Friday won’t be a great time to pick up some cheap apps, both in the U.S. and abroad, too.

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As TechCrunch notes, the App Store has seen about a billion downloads in just the last month alone, which indicates that the continued sales success of iOS devices, including iPhones, iPads and iPod touches, is driving the App Store economy to new heights. Apple’s growing mobile software library, which includes 425,000 iPhone apps and more than 100,000 iPad apps according to Apple’s official count, is also likely helping drive customer downloads. For their efforts, iOS application developers have been on the receiving end of more than $2.5 billion in revenue.

As for Apple’s competition, the closest anyone has come is the Android Market. Google’s mobile software storefront just recently reached the 4.5 billion total download mark. Google’s Ian Carrington, director of mobile advertising sales for northern and central Europe, told a press briefing that it reached the 4.5 billion mark in a three-year span, and that it added the most recent billion in a 60-day period. Apple’s App Store downloads are then growing at twice the rate as Android downloads, according to official number from both companies.

Apple may have experienced a setback in its efforts to defend its App Store trade mark, but it’s clear that the mobile software marketplace is still one of the company’s biggest strengths in the competition for smartphone customers. If app lock-in, library breadth and quality factor into people’s buying decisions, this 15 billion milestone is a crucial indicator of Apple’s ability to continue to outperform the competition in the cut-throat mobile market.

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Speaking at the World Copyright Summit in Brussels this week, Victoria Espinel, the coordinator of U.S. intellectual property enforcement, said cloud music offerings like that unveiled by Apple on Monday “may have the effort of reducing piracy by giving value to consumers — the ability to own forever and access almost anywhere — that cannot be obtained with legal copies.” Espinel suggested that “the flexibility of the cloud may help spur the development of compelling legal alternatives.”

But wait, isn’t iTunes Match just “complete pirate amnesty?” After all, Apple didn’t specify any limitations on the ability of iTunes Match to scan and match ripped tracks and mirror them with 256 Kbps AAC tracks from its own iTunes library. In theory, those ripped tracks could’ve easily been ripped by someone else and shared via torrent or other less-than-legal solution. Also, the replacement tracks that Apple provides will be DRM-free, unlike those it gives current legitimate iTunes music purchasers using iCloud’s purchase history feature.

If iTunes Match does indeed process pirated music without issue, there’s no question that legitimate iTunes shoppers are the ones that end up looking dumb. Let’s say you download 50 albums from illegitimate sources, like torrent sites. With the $25.95 iTunes Match annual fee, you can download high-quality legitimate copies for about $0.50 per album. Compare that to probably around $9.99 per album when purchased legally through the iTunes Store, plus the $25 iTunes Match fee if you want that service.

Framed like that, it’s very hard to mount a convincing argument that iTunes Match doesn’t reward piracy. But it doesn’t only reward piracy. It also monetizes it.

Imagine a scenario where Apple hadn’t introduced support for content from sources beyond the App Store in iTunes Match. Would such a restriction discourage pirates? Hardly. Music piracy has been on the rise basically ever since it became possible, and shows no signs of abating. iTunes Match wasn’t likely to inspire music pirates to turn over a new leaf, no matter what.

What it does do, however, is allow record companies to recoup some of the losses associated with piracy, by effectively charging for music that was already stolen. In the example above, we saw how 50 albums works out to just $0.50 per year with iTunes Match if the music is pirated, but that’s still a massive increase when compared to the big goose egg.

Of course, iTunes Match amnesty could also actively encourage piracy, because of the obvious value proposition referred to above, and lead to an even steeper rise in the rate at which digital music is being stolen. But just like Apple may ultimately have sacrificed the Mac in order to score a victory in the larger future of cloud computing, it also might be willing to hasten the demise of traditional digital music sales (which seems inevitable anyway) in order to move to a more future-proof, subscription-based model. To use an old maxim, Apple may have cut off the limb to save the body with iTunes Match.

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Apple’s  app market dominance isn’t going anywhere anytime soon, according to a new report by research firm research2guidance. Despite an eroding lead thanks the growing popularity of the Android Market and other competing offerings, Apple shows signs of being able to hold on to its download advantage for a while yet.

According to research2guidance, Apple’s App Store actually saw a 2-percent increase in app store market share in the first quarter of 2011, up to 59 percent from 57 percent in 2010. Apple’s share had previously dropped 24 percent since the introduction of Google’s Android Marketplace competitor.

Apple’s ability to stop and even reverse the slide is a good sign that Android will never totally eclipse the iOS platform in terms of worldwide smartphone use, and it’s also a good sign for developers (since iOS remains the best way to make money with mobile applications) and users (since it means new apps will continue to populate the App Store).

Research2guidance estimates that even if Apple’s share erosion continues at the same rate it experienced in the last two years, it will hold on to 40 percent of the market until 2015. And even in that worst-case scenario, two factors will keep the App Store profitable and attractive to users alike.

The first is the lock-in effect of downloaded apps. It’s a subject Kevin has covered before, when he asked what the magic number was before users would consider switching to another mobile platform. Most users felt that spending a certain amount of money would make them unlikely to switch, though that number varied quite a bit depending on the respondent.

App lock-in is helped by the fact that users of Apple’s iPad tablet seem to be “heavy app downloaders,” according to research2guidance. That means they download a lot, a fact aided by the lack of a worthwhile tablet app market competitor. Google’s own Android tablet app store still isn’t very well-stocked, as Kevin has pointed out.

If the recent increase holds true, Apple may be on the verge of reaching an equilibrium with Google, at least as far as apps are concerned, instead of continuing to cede ground. But even if the Android onslaught continues, Apple’s App Store should still be a winner, and looks like it will remain so for the foreseeable future.

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Apple has posted a downloads countdown page on its site as it approaches 10 billion apps downloaded. This year marks the App Store’s third birthday, so that’s an average of over 3 billion app downloads per year. iTunes took eight years to reach the same milestone.

What makes that figure even more interesting is the fact that just last year, Apple celebrated the 10 billionth download from the iTunes Music Store in similar fashion. That milestone came a full eight years after the debut of the iTunes store, which makes for an average of just over 1 billion downloads a year.

That’s six years difference in how long it took each store to reach the 10 billion download mark. However, it’s easy to see why the difference exists; there are millions of iOS devices out there, and since there are a whole load of free apps available, that’s got to account for a large percentage of those downloads. Whereas a large proportion of the App Store is free, only a very small minority of the iTunes Music Store offerings can make the same claim.

There’s also the fact that a lot of people get their music from sources outside of Apple, something which isn’t possible to do with apps without jailbreaking. People new to Apple devices likely already have an established music collection, but someone who’s never had an iOS device before won’t have any apps at all, making them more likely to download apps than music.

While Apple celebrates 10 billion downloads, HP-owned Palm is getting excited about having surpassed 100 million downloads from the webOS store. Palm may not be an iOS competitor on the level of, say, Google, but the discrepancy still says a lot about the app gap between Apple and the rest of the market.

Whoever downloads the 10 billionth app on the App Store is up for a $10,000 iTunes Gift Card, so hit up that Top Free apps list and get to it. If you’re interested in finding out how much you’ve contributed to those download numbers, you can use Geoffrey’s method for determining your yearly app spend to track and tabulate your total iOS app downloads.

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Apple did not respond to an inquiry about the breakdown of paid vs. free downloads as of this writing. It’s worth noting that at this time, 7 of the 12 top grossing apps available on the Mac App Store are Apple’s own offerings, including the iWork and iLife suites, Aperture and Apple Remote Desktop. No wonder, then, that CEO Steve Jobs had this to say about the store’s initial success:

We’re amazed at the incredible response the Mac App Store is getting. Developers have done a great job bringing apps to the store and users are loving how easy and fun the Mac App Store is.

Apple also took the opportunity to talk up its developer terms for offering software in the Mac App Store, wherein developers keep 70 percent of the revenue, and 30 percent goes to Apple, but Apple covers hosting, marketing and payment processing fees. That it foregrounded this information suggests the press release might be intended more to attract further developer interest than to impress the general public.

Whatever the reasoning behind the announcement, 1 million downloads in one day is a solid start for any software distribution platform. Let’s see if the Mac App Store can keep the momentum going.

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In the presser announcing the milestone, Apple is quick to point out that the program is catching on internationally as well, with lots of new content having recently been added from universities based in China, Hong Kong, Japan, Mexico and Singapore, bringing the total number of files available for download globally to 350,000.

It may not seem like much in comparison to the success of the App Store, which boasts more than 5 billion downloads, but considering how niche the education market is, and how resistant academic institutions have been to giving up a paper-based model of texts and learning, it’s quite a feat. It also helps underscore just how successful Apple has been as a player among students, a huge reason for its continued success.

If you’ve yet to try out any iTunes U content, you should take a look and see what’s available. Even if you’re not currently enrolled at a university or college, there are tons of free content you could use to educate yourself and possibly pick up a new skill set that might be useful at your current job, or in finding a new one. In Apple’s own words:

iTunes U gives anyone the chance to experience university courses, lab demonstrations, sports highlights, campus tours and special lectures. All iTunes U content is free and can be enjoyed on a Mac® or PC, or wirelessly downloaded directly onto an iPhone®, iPod touch® and iPad™.

Have you used iTunes U content in the past? Let us know if you’ve found it useful (as a student or otherwise) in the comments.

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We reported here back in early February that Apple was running its 10 Billion Song Countdown Contest. Yesterday afternoon, as Steve Jobs was (probably not) blowing out the fifty five candles on his birthday cake, the odometer stopped when, according to The Loop, Louie Sulcer of Woodstock, Georgia, downloaded Guess Things Happen That Way by Johnny Cash.

The download likely earned Johnny Cash the usual pittance in royalties, while Sulcer became the lucky recipient of a $10,000 iTunes Gift Card from Apple.

Naturally, I’m insanely jealous.

Milestone

Apple is understandably keen to celebrate the milestone. The iTunes Store first opened for business in April 2003 with a little over 200,000 items available for sale. Almost seven years later, the iTunes Store boasts more than 12 million songs, 55,000 TV episodes and 8,500 movies. In April 2008, it ranked as the number one (legal) online music seller in the United States.

10 billion songs in seven years is really something — in fact, my calculator tells me it’s a touch more than one song downloaded every second of every minute, day and night, since the store was launched. People with better math skills than me can (and most certainly will) take great pleasure correcting me in the comments below. The point is, my clumsy calculations notwithstanding, the iTunes Store is big business. In fact, it must be a big, fat, cash cow for Apple, right?

True Purpose

Well, as it happens, no, it’s not a big, fat, cash cow. It’s more like a well-fed, contented heifer. It certainly makes a good deal of money; according to one analyst it generated revenue of $520 million in the last quarter alone.

However, Apple’s CFO Peter Oppenheimer told analysts during an earnings call last month that the store wasn’t “a real money maker.” Our own Darrell Etherington wrote here about declining music sales which have undoubtedly had an affect on Apple’s earnings recently. And as far back as May last year I wrote about the problem of variable pricing in the iTunes Store. Only a few weeks ago Warner Music Group announced the news (already completely obvious to everyone except music industry executives) that iTunes music sales had slowed since higher prices were introduced. (Honestly, when will the old-school music industry just shut up and admit defeat?)

So the iTunes Store might be pushing huge numbers in digital downloads (10 billion songs, three billion apps and counting) but the revenue it generates is decidedly small-frys. So why run it?

Well, it’s not a loss-maker by any means, and besides, Apple claims profit isn’t the purpose for the iTunes Store. Oppenheimer said during his earnings call:

Regarding the App Store and the iTunes stores, we are running those a bit over break even and that hasn’t changed. We are very excited to be providing our developers with a fabulous opportunity and we think that is helping us a lot with the iPhone and the iPod touch platform.

As far as Apple is concerned, the iTunes Store exists as a mechanism for selling its hardware. iPods enjoy seamless integration with iTunes. As a relatively inexpensive software publishing and delivery platform for iPhones and iPod touches, third-party app developers (almost) couldn’t ask for more.

Defense Tactic

The whole “a bit over break even” business is probably preferable over a service that is wildly profitable. Think about it; Apple’s super-success with the iPod, the iPhone & iPod touch and, presumably, with the upcoming iPad, translates into an awful lot of people around the world using iTunes (and the iTunes Store) all the time, every single day. My own clunky math above tells me this already happens, but we’re talking about this intense activity steadily increasing as the iPhone continues to dominate and the iPad begins to make waves.

As Apple’s hardware sales soar, and as more and more of its hardware ships with, or depends upon, iTunes software and services in some shape or form, the bitter cries of “anti-competitive” and “monopoly” from major competitors will grow louder.

That the iTunes Store is not a means to print its own money gives Apple the ability to play its “But It’s Not Very Profitable For Us” card when the threat of antitrust inquiries looms (and oh boy will it loom). It might not be strong enough a defense to save it from unsavory intervention by the law courts (particularly those in Europe, which can’t help but interfere with successful businesses) but it certainly can’t do it any harm.

It’s ironic, really; when the iTunes Store launched it was lambasted by critics certain it had no chance at success. Of course, those criticisms have since proved unfounded, yet today it seems Apple is in an awkward place, and paying a price for its success.

When that number does hit 10 billion (as of this writing, it was almost at 9.9 billion), one lucky iTunes customer who actually makes the 10 billionth purchase could win a $10,000 iTunes Gift Card. That’s a lot of songs, TV shows or even apps, depending on what you fancy. Especially if rumors prove true and TV show prices drop to just a dollar. And at the current pace of around 100 songs per second, it will be just under two weeks until that milestone is hit.

Apple took the opportunity to also toot its own horn, which is only fair considering it’s hard to overstate the impact iTunes has had on the music industry:

iTunes changed the way you buy music, making songs and albums available for download, day or night. Seven years later, we’re about to celebrate our biggest milestone for music, yet — 10 billion songs downloaded. Buy a song, and if it’s the 10 billionth download, you could win a $10,000 iTunes Gift Card.

Viewed over the long term, hitting the 10 billion downloads-mark so soon after the it hit 3 billion (July 2007), a number which took three years from the initial launch of the iTunes store, Apple is doing very well. Recent developments, however, have had a negative influence on iTunes music sales numbers. Specifically, I’m talking about the new deal Apple worked out with record labels that saw prices for some bestselling music jump to $1.29 per song from 99 cents.

Since then, digital album sale growth has been steadily on the decline. According to AppleInsider, the second quarter of 2009 saw 11 percent growth in digital sales, while the third only saw 10, and the crucial fourth quarter — which included the 2009 holiday season — saw only 5 percent growth. Sure, it’s still technically growth, but that rate of decline has got to be making both Apple and music industry executives nervous.

For its part, Apple is probably just content to let the music sales slow so that it can go back to record companies and say “I told you so” regarding the effects of the price flexibility required by the labels in exchange for DRM-free tracks. Customers could actually come out on top if sales continue to trend downward, since the industry might be forced to try going back to a flat, 99-cent-per-song-downloaded rate, a move Apple would no doubt support.

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