Apple has paid over $2 billion to app developers, $12 billion to record labels
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Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#2I don't think it is fair to include free apps in the analysis and then ignore the revenue that may have been generated with ads. The article does end with a note saying that $2b was paid out in 31 months for apps compared to the music.
Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#3So, app developers are the new rock stars? Finally, revenge of the nerds! :-)
On a more serious note, this is fascinating data. I wonder what the comparison to web apps looks like, but that's a much harder (almost impossible?) number to get at.
I say fascinating, because who would've thought that having a centralized marketplace with a builtin secure payment mechanism would've created so much value/wealth over such little time, kudos to apple.
Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#410% gross margin doesn't mean that the labels get 90%. Bandwidth and storage cost a lot too.
Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#5Jobs reported $1,000M to developers in the lifetime of the app store in Jun '10, so that's for the first two years. (~$1,400M gross revenue)[1]
Now asymco has that doubling to $2,000M in the following 7 months. It's possible, I suppose, but seems quite optimistic.
I don't have the numbers in front of me, but I think it's safe to say that iOS installed base hasn't doubled in the last seven months. I think I recall iOS market share being reported as growing 2% in the last 12 months.
That seems to leave the lions share of the revenue acceleration to increased ARPU. Higher ASP on the iPad may account for some but it's hard to believe it would be enough.
In more traditional stock analyst estimates, Citibank has 2011 app store revenue at "up to $2B" [2]. With asymco's estimates he says we're already exceeding that currently, showing $2.5B in yearly revenue with no growth. If you extrapolate asymco's growth curve that puts 2011 at more like $5B in gross revenue.
I just don't see it. I wouldn't be surprised if the estimated/assumed app ARPD of $0.29 is the issue.
[1] http://tech.fortune.cnn.com/2010/06/23/app-store-1-of-apples...
[2] http://www.intomobile.com/2010/12/31/apple-app-store-iphone/
Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#6So, app developers are the new rock stars? Finally, revenge of the nerds! :-) On a more serious note, this is fascinating data. I wonder what the comparison to web apps looks like, but that's a much harder (almost impossible?) number to get at. I say fascinating, because who would've thought that having a centralized marketplace with a builtin secure payment mechanism would've created so much value/wealth over such l…
"who would've thought that having a centralized marketplace with a builtin secure payment mechanism would've created so much value/wealth over such little time"
eBay. Amazon. Valve. Microsoft (XBox Live).
Apple isn't the sole innovator in this area, a lot of businesses have done excellent work in similar veins. Nevertheless, they do deserve a lot of kudos. They helped cement digital music as fully legitimate and accepted by the music industry. They helped push DRM free music. And they've done good work pushing the boundaries, often in the right direction, in mobile phones and apps.
Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#7The headline seems to make an assertion about $2B paid to developers.
However, it appears that the $2B number is an asymco estimate. It is not clear how they arrived at this estimate. Does anyone know how the they arrived at the $2B number ?
[edit: Thanks for the explanation, Trotsky. His post didn't mention any download numbers.
However, it looks like he discussed download numbers in a different post. Given those download numbers, his estimates make sense - of course, with all the caveats that you've outlined]
Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#8The headline seems to make an assertion about $2B paid to developers. However, it appears that the $2B number is an asymco estimate. It is not clear how they arrived at this estimate. Does anyone know how the they arrived at the $2B number ? [edit: Thanks for the explanation, Trotsky. His post didn't mention any download numbers. However, it looks like he discussed download numbers in a different post. Given those do…
He took the June 2010 WWDC numbers of $1B to developers ($1.43B gross) and 5B downloads over the first two years of the app store to come up with $0.29 revenue per download over the lifetime of the app store. Then he applied that $0.29 per download to new download figures. This assumes that the percentage of free downloads or no cost upgrades has stayed static over the app store lifetime.
Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#9Think about this rationally: How much software do you actively use on your computer? I use perhaps 20 types of software. In total, I may have used 50 or 60 different software in my life.
In contrast, I have about 4000 songs. One conclusion that one could make from that is that the app market will stop growing at some point because people will have the software they need. Seems like the logical step.
But I'm in the app market, and the market is not what you think it us. People are not buying utilities, they are buying consumable software. For an example of what I mean, take a look at KreciDevs android apps: http://www.kreci.net/reports/android-developer-income-report...
X-Ray Scanner
Daily Beauty Tips
Those are consumable software and they are the most popular. WP Stats, what seems like more traditional software is the least popular.
And I'm not pulling these numbers out of my arse, I write such software also, and I have 40k downloads a day. FourSquare boasts about gaining 100k users in 2 weeks - I do that in 3 days.
I believe the nature of mobile software is fundamentally different from the nature of desktop software, and that growth could indeed follow the same curve as the music store.
Re: Apple has paid over $2 billion to app developers, $12 billion to record labels
#10Think about this rationally: How much software do you actively use on your computer? I use perhaps 20 types of software. In total, I may have used 50 or 60 different software in my life. In contrast, I have about 4000 songs. One conclusion that one could make from that is that the app market will stop growing at some point because people will have the software they need. Seems like the logical step. But I'm in the ap…
I suggest you consider games into your model of the app world. Even if you are not a gamer it seems to be a strong component.