Apple recently sold 1 billion iPhone apps through its highly successful App Store. Now, a well-reasoned analysis from Lightspeed Venture Partners suggests Apple might have pulled in as much as $45 million in revenue for those 1 billion apps. But does that mean Apple is actually making money from the App Store?
As Philip Elmer-DeWitt points out, Apple is also getting money from developers that register to sell apps. The company said earlier this year that it had over 50,000 registered developers; let's assume the majority are paying the $99 per year individual developer fee (larger developers pay a $299 enterprise fee). That means Apple is also pulling in about $5 million from developers.
But, unfortunately, analysis isn't very simple. Serving all those apps (many of which are free), developing the SDK, performing all the app reviews, advertising, and administering the App Store itself have real, and unknown costs. Even if the estimates are accurate, Apple is only getting, on average, about a nickel for every app sold. Apple is lucky if that is enough to break even, and it may not be.
Where Apple is making money, though, is in iPhone and iPod touch sales. Both have been significant contributors to the company's bottom line the last few quarters. Much like the iTunes Music Store originally existed to move iPods, the App Store, for now, is helping Apple sell plenty of mobile hardware.
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