Deprecated: implode(): Passing glue string after array is deprecated. Swap the parameters in /var/www/tgdaily.com/wp-content/plugins/cp-link-nofollow/includes/CP_LNF_Post_Type.php on line 172
Apple’s making peanuts out of the app store, according to a financial analyst who says it’s netted less than half a billion dollars since its launch two years ago.
Gene Munster of Piper Jaffray says Apple’s claims to be running the store at more or less break even point are borne out by the data.
Munster seized on two figures given by Steve Jobs two weeks ago during his keynote address at the Apple Worldwide Developers Conference.
Jobs told developers that there had been five billion apps downloaded, generating $1 billion for developers.
Munster says that the implication of these figures is that the gross revenue for the app store is $1.4 billion. After the developers have taken their 70 percent cut, this leaves Apple with just $429 million.
With around 81 percent of apps being free, says Munster, this is hardly surprising – especially as the paid apps have an average selling price of just $1.49.
The company’s gross margin – after developers and credit card companies have taken their cut – is nevertheless around 44 percent.
These figures mean that the App Store is pretty peripheral to the company’s overall business. Given that the company’s generated $33.7 billion since the App Store launched, it shows the store contributing just one percent of the company’s bottom line.
The implication is that the App Store is something of a loss-leader for Apple, driving the sale of the company’s rather more lucrative hardware.
“We see a virtuous cycle of Apple’s robust app ecosystem adding features and functionality to the iOS devices, which drives sales, which makes the ecosystem more robust, which encourages more developers to write apps, and the cycle repeats itself,” he says.
With iPad apps rather more expensive, Munster says he expects to see the figures improve.