App Store Isn't Big Profit Center - InformationWeek
IoT
IoT
Mobile
Commentary
6/24/2010
12:00 AM
Ed Hansberry
Ed Hansberry
Commentary
50%
50%
RELATED EVENTS
[Dark Reading Crash Course] Finding & Fixing Application Security Vulnerabilitie
Sep 14, 2017
Hear from a top applications security expert as he discusses key practices for scanning and securi ...Read More>>

App Store Isn't Big Profit Center

Just about everyone knows what the App Store is for the Apple iPhone. The "There's an app for that" theme is widely recognized and even parodied in ads like Verizon's "There's a map for that" commercials. Apple isn't raking in the profits though from the store, and that's ok.

Just about everyone knows what the App Store is for the Apple iPhone. The "There's an app for that" theme is widely recognized and even parodied in ads like Verizon's "There's a map for that" commercials. Apple isn't raking in the profits though from the store, and that's ok.The store has over 200,000 apps right now, though a good chunk are really ebooks of some sort. The cost of apps range from free to $899.99, and over 5 billion have been served since the store opened up in the summer of 2008.

According to VentureBeat, Piper Jaffery took those numbers, combined with the one billion dollars paid out to developers and worked a bit of financial magic to determine that the store made $189 million. They estimate the store has $429 million in revenue. I am not sure these figures take into account the infrastructure that had to be built to support the store, nor the wages of the people that daily run the store and judge the apps. If I had to guess, I'd say the true profit of the store is much lower than what has been estimated.

It doesn't matter though. The App store is best viewed as a marketing tool to make the iPad, iPod Touch and iPhone more attractive. Even if it were bleeding money, it wouldn't matter. The incredible breadth of apps available is a big thing that keeps the iPhone popular, and if users have some apps they just cannot do without, it makes it less likely they will drop the iPhone in favor of something else. The App Store is worth far more than the profit it generates.

Oh, and that $899.99 app? iRa Pro. Are you downloading it yet?

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll