Apple's Apps A $2.5 Billion Business?

Posted: Aug 27 2009, 12:50pm CDT | by , Updated: Aug 11 2010, 3:59pm CDT, in Apple


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The iPhone App Store is, without a doubt, the most successful app market for any smartphone. They've got thousands and thousands of different apps, and hundreds of millions of app downloads. It's not surprising to hear that the App Store is making a lot of money for Apple. What is surprising, is just how profitable the App Store really is. reports on a Mobile Metrics report from AdMob that estimates App Store annual revenue at almost $2.5 billion per year. That becomes even more impressive when compared to the Android Market's $60 million/year estimated sales. If these numbers are accurate, than the App Store becomes a much more significant part of Apple's annual revenue than previously thought.

It should be noted that this number is just an estimate, however. AdMob found out how much money the average iPhone/iPod touch owner spent per month on paid apps, and made an estimate based on that. Since their survey only included 1,100 users in total (including Android users) and there are over 40 million iPhone/iPod touch users, this data should only be seen as a rough guess. They'd need to have a much larger sample group to get any reliable data.

At the very least, this survey gives us a better idea of what the average user is spending on apps every month. It found that users who download paid applications do so an average of five times a month. The average application price is just under $2, although we can expect to see that skew upward in the next year thanks to TomTom.

If these numbers do turn out to be accurate, I think we'll see a substantial upswing in app market interest from other companies. If there are billions of dollars to be won, manufacturers besides Apple are going to want to throw their hats into the ring. The Android and BlackBerry app markets have both been rather lackluster so far. Maybe this news will spark a fire under their collective asses.

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<a href="/latest_stories/all/all/5" rel="author">Robert Evans</a>
The excitement about new smartphones, tablets and anything mobile drive Robert to unearth the latest rumors and developments in this fast moving space. He adopted 4G as soon as it become available and knows where the mobile market is going.
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