July 3, 2009
Just How Successful is the iPhone App Store?
In Malcolm Gladwell’s New Yorker review of Chris Anderson’s new book, “Free: The Future of a Radical Price,” he said that Apple will soon be making more money from iPhone downloads than it does from the iPhone itself. The WSJ reports.
He said this to make a point that businesses can still be successful charging for content. But a quick glance at the iPhone’s numbers show that he may have been a little too hasty in his assertion.
... But a bigger moneymaker than the iPhone itself? It’s not even close. Apple doesn’t break out details about iPhone and App Store profits, so it’s difficult to get a precise figure. But Shaw Wu, an analyst for Kaufman Brothers, said his “guesstimate” for Apple’s quarterly App Store revenue is a few hundred million dollars at best, out of $1.5 billion in overall iPhone-related revenues.
On a per phone basis, Wu estimated that Apple gets about $600 a phone, give or take a few, based on a calculation that divides iPhone cash flow by the number of phones it has sold. (Consumers are able to buy iPhones for much less because cellphone carriers subsidize the difference).
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