The App Store: Less Profitable Than You'd Think

Posted: Jun 23 2010, 8:37am CDT | by , Updated: Aug 11 2010, 9:56pm CDT, in News | Technology News

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Apple's App Store was the first of its kind. To date, the store has well over 200,000 applications, tens of thousands of which sell every day. And yet, the App Store's wild success may hide profits that are much thinner than you'd believe. Piper Jaffray, a research firm, investigated the App Store to see just how much it takes home.

They used the figures given by Steve Jobs at WWDC 2010 and worked out a rough estimate of Apple's profits. Using an estimated app value of $1.49, the firm found gross profits of $189 million since the App Store's founding. If this seems like a ton, try to remember that Apple has already paid a billion dollars out to developers and made $50 billion USD (gross) in the same period.

The App Store's importance lies in what it means for the iPhone and the message it sends about Apple's mobile priorities. As a business, it actually represents a fairly tiny subset of Apple's overall revenue stream.

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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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