App Store Pulls In $2.4 Billion A Year

Wow, thats a lot. I knew they made a big profit but i didnt think it was one that big!

 

I'm not even remotely surprised.

The App Store model came in at a time when the mobile market was completely fractured and profit margins were pretty slim when you consider that app sites like PalmGear and the like took the lion's share of sales revenue. Just finding an app meant you may have to visit a bunch of different sites if the developer didn't want to sacrifice most of his revenue to the larger sites' fees.

The App Store effectively consolidated download locations into one place to make it easy to find everything you're looking for, made it available both at home and on the go, and perhaps most importantly skimmed only 30% off the top, giving developers a huge incentive to jump on board what was already proving to be a popular platform that would only explode in popularity with the advent of this App Store model -- plus made it free to host free applications. This brought app pricing way down (both because of the high margin, and from the unexpected "race to the bottom" that played out), and consequently made app purchases much more frequent and popular. Compare iPhone mobile apps and games to their Windows Mobile, Palm or Symbian equivalents and it becomes a no-brainer.

Apple did it first and locked up the market like they did with iTMS. Everyone else is just taking up the rear with a similar model on less popular platforms, so their considerably lower numbers come as no surprise. All you really need to do is look at the App Store's progress in the year+ it's been around: It had over 50,000 apps by the time it turned a year old. That is utterly unprecedented by a long shot for any platform that ever existed.

 

This is great news for developers, but there still needs to be refinement in the way that Apple goes about their distribution. I'm sure it's only a matter of time, I mean it's Apple!

 

What do you mean Apple did it first? There have been mobile apps and games for other mobile hardware well before the iPhone hit the scene. Only thing Apple did (a year after release btw) was add an app marketplace into iTunes which is already the leader in digital music downloads. Even though iTunes sucks as a program the installed customer base is huge and that customer base has a choice between a phone or a mp3 entertainment device (the touch).

If we are just talking iPhone downloads, the sales would be much less, removing all the iPods from the equation would put them in line or at least closer to the Android market.



Take a look, considering how many apps Apple has to Android the numbers here are actually pretty impressive for Android. You remove the iPod touch and the numbers don't look so daunting.

There are three generations of iPhones compared to two Android phones currently.

 

GEEEZZ!!! And they can't even pull their act together in the Apps Approval Department. They love this. Making graphs and numbers and pay hundreds of financial analysts counting how much money they make so they have these figures to showcase to the media but they don't even bother hiring more people to answer the emails of indie devs... whom are the ones making the money for them.

 

Which is what my post was entirely about. The App Store was a major paradigm shift for mobile application delivery, and its terms were enough to attract massive interest compared to the fragmented marketplace that existed before.

 

1. Why consider just iPhones. Clearly, 1 of the best moves apple made was to bring the app store to the touch. No other phone maker has got that advantage granted but that is irrelevant. The platform is on both devices and Android (and others) have to deal with that. Maybe MS will try with their Zune/ Windows Mobile store, but I doubt it.
2. Even looking at just iphone vs android in that chart you posted, there is a very significant difference in that a much bigger % of android apps were free vs. paid in comparison to iPhone. Factoring out the touch would still see a pretty damn big difference.
3. Obviously a lot of the success of the app store is due to iTunes. Users already use and trust it and thus do so for the app store. Some have content on there that is DRMed (i.e tv shows, films or music that I ain't paying to update). Maybe part of Android's problem is teething problems and it will likely improve. But the risk for Google is that the situation becomes like the iPod and iTunes in music players - they have a massive head start now, and everyones playing catchup.
4. Bear in mind that this is only data obtained via admob enabled apps, which I assume they extrapolated to the entire markets. There are likely thousands more apps and games that aren't using admob at all, which is likely to be difficult to accurately predict unless you're Apple.

 

30% of 2.4 Billion= 800 million for Apple. All that and they can only afford 40 people for the review process

 

Honestly, I think that's by design. If Apple immediately approved every app and update submitted, there would be a lot of abuse of the system.

Day1: App submitted.
Day2: App approved.
Day3: Update submitted.
Day4: Update approved.
Day5: Another pathetic do-nothing update submitted...

...etc...