How Big Is the Apple iPhone App Economy? The Answer Might Surprise You

88 Comments

iStock_000007334181SmallIf I were to tell you that Apple’s app economy was worth more than $2.5 $2.4 billion a year, you would laugh hysterically, shake your head and walk out of the room, yes? Surf on over to some other web site? But here I am telling you exactly that! According to mobile advertising startup AdMob, there are some $200 million worth of applications sold in Apple’s iPhone store every month, or about $2.4 billion a year.

Just to put that in context, Apple says about 1.5 billion apps have been downloaded from the App Store. In comparison, the Android marketplace brings in about $5 million a month or on a run rate to do $60 million in a year, AdMob says. I bet that number rises up sharply once more handsets come to market. As you know, Motorola is announcing its new Android handsets at our Mobilize 09 conference on September 10.

AdMob bases its monthly reports on the usage behavior found on various applications and web sites across its ad network. For the month of July, the report combines AdMob network data with survey results from over 1,000 users of iPhone, iPod touch and Android devices. The result is a broad overview of not only the Apple iPhone app ecosystem, but of Google’s Android-based app marketplace as well.

appstoremarket

Why the focus on the iPhone? Because as the report points out, “the iPhone represented 60 percent of U.S. smartphone usage in AdMob’s network in July 2009, followed by RIM and Android devices at 13 and 12 percent, respectively.” Here are some additional findings:

androidiphoneappsjuly2009* Each month, Android and iPhone users download approximately 10 new apps, while iPod touch owners download an average of 18.

* Android and iPhone users download eight new free apps per month vs. iPod touch owners, who download twice as many. The iPod Touch application activity can also be correlated with the sharp increase in Wi-Fi usage from these portable devices, something we’ve noted in recent posts.

* Nearly 50 percent of iPhone users and 40 percent of iPod touch users buy at least one app every month vs. 19 percent of Android-based phone owners.

* iPhone/iPod Touch owners, an average, spend $5 to buy five paid apps every month.

* Given the high number of app downloads, it’s easy to see why nearly half of Android and iPhone users are spending more than 30 minutes every day using them. Nearly a quarter of Android and iPhone users devote a full two hours a day.

The biggest takeaway from this data: People are happy spending money on apps for their smartphones, especially after they’ve had a chance to try them for free.

mobileappsdiscovery

88 Comments

starwinar

Is there an application that can track the money that application developers make each day, month, year, etc? Please let me know.

Philip Yana

Taking a closer look at the data, I note a few things…

1) The survey sample was taken by people who responsed to AdMob’s ads on their devices. This methodology is bound to mean that people who use a lot of apps, who spend a lot of time using apps, and who use actually apps that display AdMob’s ads are bound to be over-represented. People who don’t use so many apps won’t be caught in the survey.

2) It’s a survey on what people *think* they spent. Unless the people actually stopped to check the data and do the math – unlikely! – it’s just some kind of guesstimate.

3) Taking a close look at the graphs in AdMob’s report (PDF available via link in the blog post) we see that they’re showing 47% of respondents saying they spend $1-$5 a month, and another 25% saying they spend $6-$10. Nearly 75% spending less than $10. And yet, AdMob’s math has the average monthly spend for the whole user population at $9.49 for iPhone users and even higher for iPod Touch. That’s not impossible, but it’s looking suspect, and could well be skewed by a few users claiming to spend big bucks.

Overall, this is typical of “research” done for purposes of marketing. There’s enough work put in to make some headline grabbing numbers, but not enough to actually discover the truth of things.

And of course, the Blogosphere as a whole is only too happy to propogate eye-catching headlines without worrying too much about their validity.

zombie

yo – totally agree with what you have to say. This survey, just like most of the other such sponsored surveys is totally biased and useless.

Kedar Thakar

Agree and what is the response rate for admod network? So even for people using apps with admod ads, this is biased sample.

Philip Yana

Do we really believe these numbers, or is there something in AdMob’s methodology or its purpose that is skewing the findings?

I did a small survey on Mahalo a while back, and people had an average of 56 apps each, of which approx only 6.5 were paid apps. That’s certainly the ballpark I’m in myself.

Then consider that it’s not so long long since Apple reported the milestone of a billion app downloads. Now if around 10% are paid, that’s a 100m paid apps downloaded ever, and with the average price probably being not much more than a dollar, we could generously value the totality of app sales for all time at less than $200m. A far cry from $2.3bn a year.

The market must’ve been growing since Apple published that stat, but it’s hard to believe it’s grown quite that much.

Personally, I think AdMobs sample is just skewed, and maybe they have an interest in talking up the numbers anyway.

Mind you, I think the app market going forward could well be in the order of $500m+ pa, which is not exactly small change.

Joe

It’s all about selling the hardware … which means not just the software, but the whole experience which is seamless. Apple is firing on all cylinders because the business model and formula are nearly perfect. Rock on!

knuthf

Hmmmmm … what a strange discussion.
The market size is correct for the iPhone and the US technologies that have never been exposed to the mobile phone market. Yes – maybe Android will succeed – but I doubt it.

The dominant OS for the mobile market is Symbian – and the dominant browser is Opera. This comes with turbo, spell-checker, and full support for widgets. The market strategy is vastly different, and here Nokia can learn from Apple: e.g. make a “shop” for Symbian applications, and establish a organisation that can test and confirm that the applications really works. However, Nokia sells handsets, for all the mobile operators, and the applications is there to generate network load, that the operator can charge for. This makes Nokia agnostic to which applications are made, and what you use them for. Whereas Apple make it into a business to promote applications.
Now we have to search the Internet for Symbian applications, where the answer is typically 10 application for every one on the “AppStore”. Since the browser has been designed with the mobile handset in mind… there is no need to charge for a widget, it has already been provided to you.

The only problem is that Symbian was not invented in the US – it was invented in Europe for PDA’s (by Psion) – and has supported pocket devices and was never intended for anything else. It also has a huge market-share compared to Apple’s iPhone or the Android of Windows mobile, making these just strange niche technology. So – what would the market be for a Symbian application where the user paid $5 per month…. exposed to the entire GSM network?

Intosh

Grossly exaggerated numbers and highly flawed estimations. First, lots of iPhones sold are from user upgrades. Second, users do not pay 10$ for apps each month, every month of the year — apps purchase fluctuates wildly and randomly; using one month’s figures and extrapolating it to 12 months is ridiculous math in this context. Fail.

vikram d

because apple”rejected”the google voice app,we should stop using the device which can access 69,999 other apps and lose the incredibly simple to use functions of the iphone/touch?you folks must be kidding.

Anonymous

Yeah but the best iPhone app ever is about to hit and its free. This app will do to shopping what money did. Sales Near Buy in development and coming soon. It will be FREE to download the app and search for what sales and specials are near you. From Anklets to Zimmer Frames and everything in between.

garcia

Phones aren’t used for making phone calls to connect people.

Apps are sold to create social network tools to replace people speaking with each other.

Please, let there be a massive sunspot that wipes out all cellular towers.

Really, I’m not kidding.

This has become absurd, this worship of tiny screens.

Evolution will out, our eyesight will devolve and we’ll only be able to see the tiny screens, then we’ll walk off the cliff in front of us.

Bastion

That’s one of the best Luddite comments I’ve seen today.

Also, a very uninformed view of what applications are used on smartphones. Most are entertainment (including taking photos), location-based services, and information services – of which some, certainly not all, are serving information from a user’s social network.

These “smartphones” are just the next step on the the “convergence” vision that has been bandied about for years and years now.

It’s not worship, and it’s not unhealthy (for the most part ;-) It’s just time to ditch the MP3 player, DVD player, cell phone, laptop (or netbook), GPS, and digital camera in favor of a single device. How is this bad? This is progress…

Fred Brill

Who is the evil empire of choice to deal with, Apple, Google, or Microsoft – and isn’t interesting Microsoft is not even in contention at the evil empire table? There is a Bob Dylan song in there someplace.

Synthmeister

The 26 million user figure is worldwide sales, not just US because that is what Apple said in it’s last quarterly report. The iPhone / iPod touch user base was around 40 to 45 million users worldwide total.

Brian Cipresse

I suspect this is 40-45 million UNITS worldwide versus users. Let’s assume half are in active use, Android’s market share is 5% using the Paid Application Market Size chart from above.

Gus

26.4 million users would mean that Apple has an iPhone in the hands of 9% of all Americans. I live in DC -a core Apple demographic- and (anecdotally) I don’t see a iPhones on 10% of residents. If you except unlikely owners like kids under 12, people over 65 and households with incomes under $40,000 my guess is that that 26.4m number is somewhere around 25-35% of all cellphones, not just smartphones. That seems much too high, even for a phone as popular as this.

Mr. Malik, can you say where you got this number?

Tom Ross

I think AT&T have actived about 10 million iPhones in the US by now (by the end of June actually). The rest went to other countries, with O2 UK announcing 1 million activations in February’09, Orange France the same in May’09 and T-Mobile Germany rumored to have reached that milestone in July’09.

Tom Ross

I have to chime in with the other commenters who said that these numbers seem too high by a factor of 5 to 10.

Essentially, why is AdMob, a company that deals mostly with free ad-supported apps, an authority on paid apps? Their $ estimate seems to come from a poll, not from actual sales data.

From Apple’s announcements (500 million downloads each in the first and second quarter) the AppStore is now doing about 200 million downloads per month, with most of them free (probably 9 out of10 or more), the rest selling for maybe $3 on average. An average price point for both free and paid downloads will be something between $0.10 and $0.50, but $1.00 (as implied by AdMob) seems amazingly high.

Sourabh Niyogi

There are not $200MM worth of apps sold every month. Instead, at most 10% of the 100MM downloads/month are paid, and the average selling price is at most $1.50. So its more like $15MM/month at most, with Apple making at most $5MM/month from that and the developers making $10MM/month. $6-7MM of this goes into the head (top 50-100), and the rest goes into the tail.

I took the actual data posted by 3-4 indie top 20 developers (cf Firemint) and fit a power law distribution model to figure out how much each of the top 100 devs got paid on the average up until that point and concluded that the 10% was more like 4-5%. But all the entire user base will have doubled by the end of this year, so that cancels out.

I believe what happened is the SURVEY results were filtered to get the “users
spend $5 to buy five paid apps every month” data point which was then used to do the horribly bad math in the headline using the user base counts ($9.49 x 26.4 x .5 = $125MM).

So its off by a factor of 10.

Albert â™› Lai

Hey Om, I have to agree with Sourabh above (and call BS on the “Survey” results).

Timing of this post is intersting, as I just did a quick back of the envelope economic/case-study of a recent/current top (#2) paid app on the app store here: http://bit.ly/2VgTF

I find it difficult to believe that the iPhone app space is 5-10x bigger than the Facebook app space given the economics and user metrics.

You can roughly guesstimate the SNS app/game space being $500M market ($100M for Zynga, $40M/$40M for playdom/playfish, and lets call it 3x-4x that for the rest), with a user base of 400M users (FB+MySpace+OpenSocial) vs. ~1/10th of that on the iPhone side.

ARPU on the social game side is $0.20 to $1 per MAU.

According to AdMob’s survey, iPhone app market is 5x that of the SNS app/game market given that the space has 1/10th the reach of SNS apps (~40M vs ~400M users)?

The other thing that throws me off the most is the”survey results”/assumption that shows 50% of users spend $10/month on AVERAGE on Apps. That number just strikes me as being highly optimistic/inflated as an average.

That said, I could see a day that the mobile app space makes $240M a month… that day just isn’t today.

Also, it could be argued I’m just as biased towards Facebook as a founder of Kontagent (facebook analytics) as AdMob (mobile analytics/ads) is for towards the iPhone. =)

CheesedOut

>>you would laugh hysterically, shake your head and walk out of the room, yes? Surf on over to some other web site? But here I am telling you exactly that!

And am, (with no pleasure), wondering if I should be doing exactly that – surf on over to other, more credible, sites. Sad to see bloopers here. I’d gotten used to some solid analysis in these pages, not merely a rehash of what someone else already has said, or a let-me-jump-first to the conclusion kinda articles that keep creeping in of late…

Philip Yana

This looks like very plausible back-of-envelope math! Much better than AdMob’s report.

Not sure where the base of 100m app dowloads a month comes from. Given Apple’s count of apps ever sold seems to have gone from 1bn to 1.5bn in maybe 2-3 months, current levels could be from 150-200m a month. 10% max of them paid apps sounds about right as does an average price of $1.50 or so. Which means around $30m per month in app revenue sounds like an upper limit.

That’s still $460m pa which is no small potatoes.

Mark Sigal

Personally, the numbers are highly dubious. I just don’t buy the ~$10/month in app purchases number for the segment that pays for apps (sidebar: you get what you pay for – I use a tiny increment of the free apps whereas the pay apps are generally a bargain relative to any mobile/console alternative, and materially better than the freebies).

That said, even if the number is inflated (best guess: the real number is 60% what is forecasted), that is a BIG number, and growing.

I, too, think that the game will settle in between Android and iPhone/iPod Touch as yin-yang strategic approaches, but as noted in my GigaOm post, ‘Android vs. iPhone: Why Openness May Not Be Best’ (http://bit.ly/hm5po), Android’s success relative to iPhone is hardly a given in the next 18 mos.

As Android platform gets to 3.0 stage, however, and Google figures out the balance between satisfying the proprietary aspirations of hardware OEMs and Google’s own need to maintain an open, unified base of devices, then the competitive game will get interesting.

Mark

Sachin

Stats are really eye opening…but more importantly I wonder what will happen when iPhone 3GS will launch in more bigger markets like China & India. Then these figures may double (may be not)…

Tom Ross

Okay, 1 out of 4 smartphones worldwide go to India and China nowadays, but the average pricepoint there is $200 and a lot of “smartphones” actually still come with a numeric keypad and lack a touchscreen. China and India may become some of the iPhone’s midsize markets, comparable to Italy or Germany, but they will certainly not carry half of the world market. And software sales will be tiny, as I would expect piracy to become all-encompassing as in most Asian markets.

Gijs Bos

I actually think the difference is quite small $8,63 and $9,49. The volume difference is much bigger. I believe the average Android app quality is probably higher, and Android users download probably much fewer iBeer and the like apps. Moreover, the % of free apps on the Android is probably higher too.
These are all assumptions , does anybody have data on this?

Brian

I agree with many of the comments above.

I can’t wait to see how these numbers will play out over the next 12 months as Android phones are launched on multiple US carriers. I think the diversity of android phones on multiple carriers should quickly catch up to a App store, measured on a US subscriber basis only. However, Apple continues to advertise the App store, driving awareness and marginal utility for their customers and potential customers. However, we have yet to see the same from Android and its unclear to me, who is expected to own that marketing piece. The carrier, google or …

Thanks OM for another perspective setting article.

testbeta

what this commenting system is? it loooks nice, clear cut, space saving aesthetic too…what is it?

HB

I am wondering why is Blackberry not in this comparison? Is it because no stats are available, or its app market is known to be tiny?

Ryan

As far as I can tell, the information in this report is mostly based on applications that use admob. It may be that there are not enough admob-enabled blackberry apps to be statistically interesting.

Another source I came across yesterday claims that blackberry apps represent less than 5% of the total mobile application population. So, the characteristics of blackberry apps may not be interesting enough.

iApplicate

Its really like any old business. Independent developers should feel lucky to have an app approved for sale, this is indeed a legit empire of a corporation we’re talking about. Any old amateur programmer couldn’t just whip up a non-quality PS3 game and throw it into the market for sale, and I’m sure this is the case in the iPhone app world. Everyone thinks they can be the best at what they do, but sometimes they have to face reality.

With that said, selecting and selling apps has been rather arbitrary, and this stuff just has to work itself out, as does Internet marketing & business in general. Its interesting to follow it for sure.

We’re hoping the app stores doesn’t go out of business any time soon, we’re having too much fun reviewing them :)

iphonerulez

As these figures show, the whiners and complainers about the terribly closed Apple mobile ecosystem are winning and are just about on the verge of shutting down the New Evil Empire’s App Store. The possible rejection of Google Voice and maybe another couple of apps out of the 70,000 or so remaining is seriously crimping Apple’s viability to run a successful mobile platform.

Despot Steve Jobs is to blame for single-handedly destroying Apple and iPhone sales by saying the words “Reject it”. Everytime he says those two little words, millions of iPhone users and thousands of developers fling their iPhones into the nearest wall and run out to buy Android- or WinMo-powered smartphones in order to be able to multi-task and run every sort of app that their minds can dream of. They paid for their cellphones with their hard-earned money and by God, nobody is going to tell them what they can or cannot do. Be it bandwidth sucking streaming apps or child-porn apps. Adults should be able make their own decisions.

Judging by the amount of App Store complaints and FCC probes into Apple foul play I PREDICT that within a month the App Store will be closed indefinitely and Apple will close its doors forever and give the money back to what few investors are left. Mark my words. No sane iPhone user will put up with this sort of nonsense. Freedom and justice will prevail and the New Evil Empire will be no more.

jbrandonf

lmao, yes App Store is successful but how long can they keep this up?

Juan Carlos de Burbon

What?

A company can control its own ecosystem. Apple’s technology doesn’t have to be open and there is no law requiring it to be open. It’s not a commoditized product, it’s a premium with a closed ecosystem.

Android provides a competitive ecosystem that will be commoditized and open. By virtue of having that, you cannot force Apple to open their ecosystem. They CAN legally monopolize their own product ecosystem because an alternative with a larger market already exists.

As much as you may think and want it to happen, it won’t. Apple closed their openness when the Macintosh was first introduced in 1984.

Bill Burkholder

Don’t forget, Apple opened up its OS in the mid-1990’s to clone makers, and this nearly killed the company! When Jobs came back, one of the first things he did was kill the clone program and buy Power Computing, a clone maker, for $100 million.

That they are a closed system is their most precious and important economic advantage, as well as a technological one. They can make the software work seamlessly with the hardware as no one else can. This is their secret to rapid and dominant innovation.

Look at how they have changed the paradigm of computing. Look at how they have changed the paradigm of music distribution. Look at how they have changed the paradigm of mobile telephony…

Folks, these people are not the evil empire. They are the future of consumer electronics innovation. They do so much right, they inspire a lot of envy and hate from companies that know only complacency and “me too-ism”.

I can’t wait to see the iTablet, or whatever they call it.

Nicholas

Of course, Apple also went from being the largest personal computer maker to a minor position after they closed off. There are examples for everything…

I also expect that the same thing is going to happen in mobile.

iphonerulez

I honestly thought the sarcasm was fairly obvious. As an Apple investor, I think Apple should stay the course, keep a tight grip on apps and iPhone development and let the 1% unsatisfied users and developers go somewhere else as soon as possible. Apple is the only company that knows what it’s doing and what its direction is. The other mobile platforms can only follow.

Patrick Murphy

Om,
Not to be a killjoy but can some of these stats be verified by another firm? They just seem a bit out of whack… inflated. The mobile app space is certainly growing and extremely vital. However, too much hype does create bubble effects. Not something we need…
Is there any way you can work your magic and get Apple to provide an honest ( behind the scenes) reaction to these figures?
I want to believe but…
Thanks for your work.

Tom Ross

Patrick, there are some sketchy infos from Apple:

– In August 2008, Steve Jobs told the Wall Street Journal that the AppStore in its first month saw 60 million downloads and revenues were about $30 million. I think this was the only time Apple talked about AppStore revenues.
– According to Apple, AppStore downloads hit 500 million in12’08, 1 billion in 03’09 and 1.5 billion in 06’09.

Unless average revenues per app have increased since last August (most people would say they have shrunk) and/or download figures have picked up a lot of steam since June of this year, AdMob’s figures are not supported by Apple’s figures.

George

I use both iPhone and Android. I am a big fan of mobile applications, but surprisingly have never paid for an app. I believe the majority of mobile users feel the same way, they don’t want to pay for apps.

I’m surprised to see how many are actually paying for apps. I know this data includes ad revenues for free apps as well, but the fact that 50% of iphone users purchase apps, spending almost $10/mo is shocking ot me. I would have expected it to be much less.

jbrandonf

You’re missing out guy. The absolute best apps I’ve used are paid apps.

Juan Carlos de Burbon

The interesting trend that should be noted is that Apple customers typically pay more and are willing to pay more. While the Android OS and store may have a broader reach the margins and profitability may be higher due Apple’s customer’s willingness to spend money.

Ryan

I share your view. My wife, on the other hand, has no problem spending $0.99 on an appealing app. To her, $0.99 is basically free.

Chris Harris

which is why they made it .99 – a lot of people think a buck is nothing. they just don’t look back and realize they bought 10 apps for a buck last month. So $10/mo :)

Sampad Swain

Interesting post Om. Truly aggregating those penny apps generate a multi-billion dollar businesses. But couple of things :

1. Does monthly revenues from App store i.e. $200 million really make $2.4 Bn dollar business without any fluctuations since I believe these sort of businesses are more cyclical (also looking at economic turbulence we (were) in!).

2. Does these stats reflect in Apple’s Balance sheet in the last couple of quarters? May be then we can truly realize the extent of the “App Economy”


@Sampad

Om Malik

Sampad

These are numbers based on July 2009 sales (by AdMob) so that is why I am saying on-a-run rate of $2.4 billion, not $2.4 billion. As more devices sell (and more Apple promotes the iPhone apps), the more will sell.

Secondly, I expect Android to do well too, except I have to admit, the choice of apps is pretty limited for now.

Sampad Swain

Agreed Om on the Android comment. Recently I came across an Android device (though in India we still don’t have it) and I should say that comparing Android OS with iPhone’s OS, people would be surprised with Android’s stability. Even I’m waiting for an Android OS based device to emerge soon enough.

And thanks for the clarification too :)

Cheers!

Brian Cipresse

Om,

I agree with you that, in the super smart phone market, Android is likely going to be the next biggest contender that matters. Let met open by saying while I’m working on an iPhone application right now, I am also thinking about the whole super smart phone market and which device to support next. Is it Blackberry, Palm or Android?

My suspicion is that Android has a 50/50 chance of doing really well. The deciding factor will be the hardware and the overall user experience for the /masses/.

Today the all-in-one Apple solution is superior to other options on the market b/c Apple controls both the hardware and software and, frankly as being vented by some of the comments here, what apps are allowed on the platform. Time has shown us, in the mobile market, that OS vendors who don’t control the hardware and software end up devices with sub-par consumer user experience. I hope Google can change that. Time will tell.

Today Android is found on generally less than acceptable HTC devices and reports of the common folk being blown away by the overall user experience is nil. Even some podcasters to whom I regularly listen have tried in earnest to switch to Android but have returned to iPhone. I believe their sincerity in wanting competition to keep Apple in check.

Android does offer the swiss army knife solution. It’s, essentially, a toolkit whereby the tech savvy user could do anything and everything he wants unlike the iPhone. Android has the potential to make a narrow set of users very happy. The market they should be after is main stream users (the 95%) that want a simple solution with one way to perform actions on their device vs. the tech dabbler user base (the 5%) who want flexibility to do their actions however they please.

Here’s a related example. Last time I checked only 1% of US households have home theatre PCs yet podcasting networks & show, blogs, and office water cooler chats abound are filled with tech folks arguing over the merits of Unbuntu, Boxee, Tivo, streaming video, Apple TV, etc etc. Until someone makes IP TV for the living room as simple as plugging in an old B/W or Colored TV to an AC outlet and turning it on, it’ll never hit the mainstream.

Palm Pilot was a hit because of their form factor (hardware) and their simplicity (software). It fit in your pocket and allowed users to do four things really well: contacts, calendar, notes, to do’s. Failure to figure out proper augmentation for a sustained future was their failure. Blackberry came along and could do the basic things of a Pilot and send email, without a stylus. I remember those blackberry days on Saturday mornings when three hours would flash by, heads down catching up on all my emails from the work week. Then came the myriad of Treo, Blackjack, XYZ devices. I’d watch so many coworkers struggle to get theirs to work properly. IT always had a pile of defunct units in the corner of the call center’s desk.

The game is augmentation. Apple has strategically augmented, where it matters, while becoming a lifestyle company. Android is playing catchup but should focus on augmentation instead; hard to do when you don’t own the hardware. Instead Google’s bet is that cloud computing is all the augmentation we’ll ever need – put all your info in our cloud, use our OS on any device you want and all will be OK; trust us. And Palm Pre is attempting to augment with Synergy and other features that predictively think for the user.

Most importantly the essential ingredient for the masses is ease of use. It doesn’t matter if a device can do 150 things if people only use 2% of it.

My point is this:

Simplicity = less flexibility => mass market adoption
Flexibility = more features => finite market adoption

From where we are today, it’s certainly Apple’s to lose.

The next augmentation. What will it be? Who will it be from? When is it coming? WIll it be easy to use & adopt? Pre, Curve, Storm, Tour, Android .. none seem to have that “A HA! I got to have it!” emotion that Palm Pilot, iPod and iPhone had. Maybe that will change but I doubt it. Time will tell …

gbp

Om,
Dumb question, did apple specifically said that they made this much money ?
Or is it AdMob coming with the numbers ?

I find it rather funny that these numbers show up in public domain. These are important business secrets , and should be known no one but APPLE .
Bottom line, they must be in the ballpark , but the revenue aspect it not a true figure.

Ian

The math is incorrect. Roughly 150 million downloads/month x 25% which are paid x $1.80 average per paid app = $67.5M/month for iPhone + iPod paid apps. That sums to $810M/year–> $243M to developers and $567M to Apple. Still, these are big numbers.

Dave

This assumes that people will buy $5-10 worth of apps per month forever. I don’t think this is a sustainable assumption. People buy their iphone/ipods and download a bunch of apps in the first few months, but then that trails off. It would be interesting to revisit these stats in 3-6 months to see if they are still relevant.

Bastion

I disagree. I’ve had my iPod touch for nearly two years, have had access to the App Store since it became available, and just spent $5 last week on Civ Revolutions. I have purchased many apps off and on over the last year or so.

There are always new apps to buy, and there is no lack of willingness for users to buy new apps. It is a marketing challenge to reach buyers with compelling offers through the noise of 10’s of thousands of apps…

Prashant

Hey according to this report, the more the device the more apps downloaded. I am waiting to see some cool I-pod killer device running Android ( as rest of OS are closed )

Archos is making one.. but its very niche market, we need some serious competition to I-Pod touch

Prashant

Om Malik

I think there are ample “touch screen e-devices” in development but will they compete with iPod Touch? Who knows. It doesn’t matter if they use Android. Seriously. the battle is Android versus iPhone.

Anon

Based on these numbers, it seems like the real battle at the moment is iPhone vs iPod Touch.

JPO

Why don’t you just buy an i-pod?

You guys are silly. Always waiting for Godot!

Sandra

And why don’t you eat each and every one of your dinners at McDonalds™, use Facebook™ and Twitter™ for all your correspondence, and only travel with Honda™ brand cars?

The poster you replied to specifically cited being “closed” as a negative.

rohit

+1 for working in beckett. +3 if you can work in ‘ubu’ / jarry.

Eideard

Oh, but, Om – all the geeks tell us that the Evil App Store Empire is an obvious affront to at least 1 or 2 heroic developers every week. And therefore will fail.

Har!

Om Malik

I think it is the money or rather the potential of making money that is going to keep them coming back to the New Evil Empire for near foreseeable future. :-)

zato

Om wrote: “the New Evil Empire”
It’s Microsoft Anti-Apple propagandists like you, Om, that are the real Evil Empire. You’re the sick PC egoists who will lie, cheat, and do whatever all over the internet, to limit and discredit Apple’s success.

zato

And one more thing – from the charts above, It’s clear that iPhone/Touch owners are more than twice, maybe three times as likely to pay for apps. This fact stands out very clearly from the above charts, yet you say NOTHING about it, because it doesn’t serve your anti-iPhone agenda.

zaxzan

Om your post is not about Apple per se.

It seems to me that you are using AdMob’s metrics as a vehicle to primarily legitimize Android by association to the leading player in the field – Apple and it’s iPhone OS – while audaciously but I suppose archetypically denigrating Apple at the same time.

You can not run with the hounds AND the fox.

Nicholas

Although I am rather upset with Apple for not approving applications that would allow for visuals with music — rather upset! — this is where the market is at currently. So, Apple is another corporation. The only people surprised by this are those that believed the Gandhi “Think Different” posters.

Apple is no different than Microsoft! A corporation… And, Steve is another CEO — an effective one — but another CEO. I plan to develop for Android when they are more established, and I will be that if Apple does not open the platform, that Android will out perform it in the long haul.

Hamranhansenhansen

> Apple is no different than Microsoft!

That’s just ridiculous. They are opposite in every way. They are fundamentally 180 degrees apart.

What you mean is, in this one limited instance of the day-to-day management of the App Store, Apple reminds you of Microsoft. That’s really different. And even that is a stretch. Apple did not put malicious code into OS X to make Google Voice run flaky and then later introduce Apple Voice with the same features, like Microsoft does. Apple did not sabotage their browser so it can’t run standard Web apps like Microsoft does, and that is where Google Voice will run on iPhone (and probably where it belongs, especially given that Google Chrome OS only has the HTML 5 API).

The iPhone literally has 2 API’s, 2 whole levels for developers to work on. They are like 2 sides of a yin-yang, one open, one closed, one private, one public. If you’re complaining about one, you should stop complaining and just develop for the other. The answer to your problems is on the other side of the platform.

Especially when you can do things like 3D accelerated transforms in the HTML 5 environment on iPhone that you can’t do natively on other smartphones.

> upset with Apple for not approving applications that would
> allow for visuals with music

I’m a songwriter and musician and I make trippy stuff and love visualizers, but I can’t imagine how you could have made this app in any way that wouldn’t run my whole iPhone battery down in less than 1 hour.

As with every rejected app I have heard of yet, you can make this in another way and it will be practical: you make a Mac app that takes an arbitrary MPEG-4 audio file as input, and gives back an MPEG-4 video file as output and puts it into iTunes. The video track would obviously be the visualizer rendering.

Then all the user has to do to enjoy the visualizers is sync the new videos to their iPhone or iPod and they can watch for about 8 hours on a battery charge instead of wiping their iPhone out in less than an hour trying to render the graphics in real-time on the device itself.

Also, by doing it as a Mac app that makes MPEG-4 movies, your visualizer runs not just on iPhone and iPod, but also on iPod nano, iPod classic, AppleTV, Blu-Ray, Adobe Flash, YouTube, and hundreds of other players from hundreds of manufacturers.

> I plan to develop for Android

MPEG-4 movies run on Android also. So one Mac app that renders video visualizers will not only work for iPhone but also for Android. You can be an Android developer now for free, no further effort required, because Apple warned you not to try and attempt any supercomputing tasks on the iPhone.

Finn Jack

The key point of iPhone App Store’s astonishing economy is providing apps related to new trends and technologies. Also the device. People die to buy it when they get more options to get a smarter user interface combined with modern technologies. Sure Android is developing as a good competitor to Apple. But we need to see, who stays ahead in the long run.

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