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App Store Hits 500 Million Downloads

Posted by: Peter Burrows on January 16, 2009

Apple just announced that there are 15,000 applications available at its App Store section of iTunes and that they have been downloaded a total of 500 million times. This is up from 10,000 apps and 300 million downloads just a month ago.

This is truly astounding progress, and very bad news for Apple’s smart-phone rivals. Already, the iPhone/App Store ecosystem is getting so huge relative to other smart-phone markets that some smart developers—Tapulous and Pandora, to name two particularly hot ones—have decided that there’s no point in adapting their apps for new Google’s Android OS yet (NOTE: I had originally said that these developers had not supported any other platform, but it turns out Pandora did announce support for WIndows Mobile in December. Thanks to reader Mathiastck for pointing it out.)

app store art.jpg

This is also the view of Jeff Holden, CEO of Pelago Inc. When he created the social networking company, Jeff—who by the way was a pal of Jeff Bezo’s at DE Shaw, and was a member of the core team that built Amazon.com—fully intended to follow the conventional wisdom for how to build a sizeable, fast-growing software company: get your apps on as many platforms and devices as possible. But late last year, he crunched the numbers and came to a shocking conclusion: that the 13 million owners of iPhone owners had already downloaded as much software as—are you sitting down—1.1 billion other cell-phone owners. (FYI, he’s assuming that 25% of non-iPhone owners download anything at all, and that they download 2.5 apps on average). Now, using projected Q4 iPhone sales and Apple’s new download data, 17 million iPhone owners have downloaded as much software at 1.6 billion other cellphone owners! “Why would I ever build for anything but the iPhone,” he says.

UPDATE: In an e-mail today, he explained the reasoning based on the newest data from Apple:

To a developer, what this means is that if he launches an app for non-iPhones (assuming he has deals with all carriers and has ported to every handset in distribution on which people can download apps), he needs to have a reach 94 times as large as the reach he needs in the iPhone community (which does not require any carrier deals and is via single platform, so no porting) to achieve the same number of downloads. In other words, the 13MM iPhone audience is equivalent to 13MM * 94 = 1.6 *billion* non-iPhones. Of course, we know there are only 250MM non-iPhones in the U.S., so there is no way to achieve the same effective reach inside the U.S.

The implications for Apple are potentially monumental, as well. As we pointed out in our story on the App Store this week , many of my sources say they see little obstacles to slow Apple’s assault on the smart-phone market (it’s share has gone from zippo eighteen months ago to No. 2 in the third quarter, the most recent data available). These sources, which include various market researchers, a former telecom industry CEO and a number of software developers who built their companies writing for Symbian, Microsoft and RIM, see no reason why Apple couldn’t win up to 40% of this lucrative market, and 20% of the overall $187 billion cell-phone business.

Such predictions would have been totally unthinkable even six months ago—and it’s got far more to do with the App Store than all the iPhone stories would suggest. Sure, having the coolest gadget is important to winning in the mobile device business. But cool gadgets come and go (Just ask Motorola, about its Razr). Indeed, analysts think iPhone sales fell significantly in the fourth quarter from the previous one, when the economy was healthier and consumers were snapping up the brand new iPhone 3G.

But if the App Store becomes the place shoppers go to get the most, and the best, software, Apple may well have a platform of historic power on its hands. “The one with the most apps wins,” says the former telecom CEO. “The most important thing with Apple isn’t the iPhone. It’s the App Store.”


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Reader Comments

Priscilla

January 16, 2009 03:45 PM

Half the apps downloaded or sold should be for the iPod touch. So it is not really a phone eco-system, eh?


Anthony

January 16, 2009 04:02 PM

The app store is just plain awesome.

After watching Slumdog Millionaire I searched the app store for a Bollywood application and was shocked to find one there.

This phone really has just about everything !

Tom

January 16, 2009 11:40 PM

The brilliance of the app store goes beyond it's availability for phones. It's for the iPod (Touch) AND iPhone. While one would keep one's music collection and carry that collection for iPod to iPod, now it's music, video AND apps. Just have an iPod today ... no biggie, should iPhone be available on other carriers soon, a Touch to iPhone jump where you easily can carry your digital treasures is no longer a leap of faith, it's product you can't live without.

mathiastck

January 17, 2009 12:45 AM

". Already, the iPhone/App Store ecosystem is getting so huge relative to other smart-phone markets that some smart developers—Tapulous and Pandora, to name two particularly hot ones—have decided that there’s no point in adapting their apps for any other platform."

Um, Pandora is on lots of phones... it was on phones before IPhone.

And it was released on more phones afterward, like the windows mobile line:

http://blog.pandora.com/pandora/archives/2008/12/pandora_on_wind.html


You may be thinking of the fact that Pandora is not yet on Android? Give it time. They may be waiting on some of the API's in cupcake. Also 2009 will see a lot more Android handsets hit the market...

mathiastck

January 17, 2009 12:49 AM

"Downloads" would count the countless updates people have downloaded as well, wouldn't it?

Scott J Sterling

January 17, 2009 10:32 AM

To App downloads, add Podcasts.

Now see the power of the iPhone advantage increase even more. The point is this: other phones can download apps, but in reality, they don't. Other phone MIGHT be able to download Podcasts, but in reality no one does.

At any given time I have about 25 new podcasts on my iPhone. That's not to mention music. The internet. Other phone could but no one does.

So what's the ultimate ad true secret? It's the common denominator: iTunes.

iTunes makes all this possible.

Dave L

January 17, 2009 09:31 PM

Most people simply don't download (or upload) apps onto their phones while most people (all those I know) with iPhones and Touch are downloading apps from the appstore. Though these are in effect the same action, on the iPhone it's viewed more like buying a tune from iTunes. I think that makes all the difference.

KenC

January 18, 2009 10:33 PM

Actually, if you think thru the logic, the 500M downloads couldn't possibly include updates. Anyone who asks, either hasn't thought it through, or is deliberately trying to underplay the impact of the App Store.

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January 19, 2009 03:11 PM

I just bought an iPhone after switching to AT&T from t mobile , and guess what... I bought it for the apps!!!! I'm also writing this from the iPhone!

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January 20, 2009 04:10 AM

The statement made by the former telecom CEO is very interesting in that it illustrates the emergence of the iPhone as a platform, but at the same time demonstrates why the telecom types still "just don't get it." Of course the sheer number of apps is important, but I'm sure there are thousands of apps available for Windows Mobile phones, and who wants to be bothered with that train wreck of an OS for anything more than making phone calls and perhaps keeping a phone book?

It's the beauty of the user interface/hardware-software integration which which makes phone-app combination so attractive. This is the very reason Apple is willing to endure the criticism of their heavy-handed oversight of the App Store: their number-one priority is to maintain the user-friendly elegance of this platform, even if it means pissing off a few developers in the process.

Kenny

January 21, 2009 12:11 AM

Get ready for the Palm Pre; winner of the 2009 CES award! Apple's iPhone is still light years ahead of the competition, but the Palm Pre is going to be the best rival that Apple has had yet--better than RIM and Microsoft. Say hello to WebOS! I can't wait for Sprint to release the Pre.

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