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Apple's App Store Could Have Generated $1 Billion In Revenue In The December Quarter

Jan 7 2014, 11:36am CST | by

 
 
 

Apple issued a press release this morning to announce that customers had spent over $10 billion on the App Store in 2013 and developers have earned over $15 billion since the App Store was launched in July 2008. For the month of December there were almost 3 billion apps downloaded with over $1 billion spent on the App Store. (Note that my family and I own Apple shares).

Apple has provided information at various points in time about the number of apps that have been downloaded, how much has been paid to developers or how much customers have spent. Since Apple takes a 30% cut of the revenue it is possible to estimate how much of the revenue goes to developers and how much Apple receives.

The App Store could have generated $1 billion in revenue for Apple in the December quarter

On the October 22, 2013, earnings call Apple said that there had been over $13 billion paid to developers for apps since July 2008. This translates to about $5.6 billion in revenue for Apple.

As of today, January 7, 2014, the over $15 billion paid to developers equates to about $6.4 billion in revenue for an increase of $900 million since October 22. While the revenue generated was skewed to late December and probably the beginning of January (therefore not captured in December quarter revenue results since it ended on Saturday, December 28) there were over three weeks of late September and early October that could help generate the $1 billion in revenue or at close to it.

Very strong year over year growth in downloads and revenue

Last year Apple issued a press release, also on January 7, that said there had been over 2 billion apps downloaded in December (meaning there was about 40% year over year growth in December 2013) and that developers had been paid over $7 billion since the inception of the App Store. This means that developers earned about $8 billion in just 2013 alone.

The approximately $2 billion that was paid to developers from October 22, 2013, to January 7, 2014, could be as much as 3 to 4 times as much as was paid a year ago.

On October 25, 2012, the company announced that payments had reached $6.5 billion to developers. When compared to the January 7, 2013, statement of over $7 billion the lowest amount would be $500 million vs. the approximately $2 billion between October 2013 and January 2014, or 4 times as much.

While these are rounded numbers (therefore it was probably less than 4x) even a lower multiple is another indication of how strong the revenue growth is for the App Store.

I have created a Google Doc with information on the number apps downloaded, how much has been paid to developers and other information on Google Doc that is available via this link.

Follow me on Twitter @sandhillinsight. You can find my other Forbes posts here.

Source: Forbes

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