Apple's App Store: How Much Is It?

Posted by: Olga Kharif on March 18, 2009

According to iPhone apps tracker and reviewer 149Apps, you can own all 25,000 applications sold through Apple’s App Store for $71,442. If you think about it, that’s a staggeringly low number, which translates into an average of less than $3 per application (Actual per-application prices can be a lot higher, of course, since many of the games and e-books sold in the store are free). By contrast, it would take millions to buy everything on iTunes, with its millions of songs each currently priced at 99 cents. The higher average per-app price spells great revenue potential for the App Store.

Based on the App Store’s recent performane, the number of applications in the store now nearly doubles every two months (the store only had 15,000 applications in January). If that pace of growth continues, the store will have nearly 300,000 applications by year-end. Assuming the $3 average selling price holds, a consumer would have to spend $900,000 to buy up everything in sight.

The store’s revenue growth should balloon as well, though not at the same pace. App Store sales likely added up to $200 million in the December quarter, estimates Charlie Wolf, an analyst with Needham & Co. If app downloads were to grow at the same pace as the store’s catalogue — 20 times in one year — App Store sales will have reached $4 billion in the calendar fourth quarter of 2009. The whole company’s revenue in the calendar fourth quarter of 2008 (fiscal first quarter for Apple) reached $10 billion. Clearly, that’s not going to happen: The downloads are tied to sales of iPhone and iPod touch devices, and those aren’t going to grow 20 times this year.

Still, as the number of applications to tempt users with increases, that should help grow overall App Store sales faster. If an average iPhone user downloads, say, 10 apps today, that person may download 15 of them by year-end, if there’s more intriguing content to choose from. Apple’s March 17 software upgrade should help increase the number of downloads per user. It will enable a number of cool new applications: You’ll be able to easily locate people nearby who are playing the same game, for instance. For the App Store, the future looks bright.

Reader Comments

Joe Crescenzi

March 19, 2009 2:13 AM

With such a success for iPhone apps, you wonder why Apple does have an App Store for Mac software too?

Without such a store, independent developers will never find a way to reach such a massive audience. Getting the word out about a program costs a lot of money, which is why there are so few Mac developers.

Jay Deberry

March 19, 2009 2:27 AM

I don't buy anything from the App store as it's too expensive and easy to find other free apps out there.

LordD

March 19, 2009 3:40 AM

Where would you put those 25,000 applications?

While it sounds nice and cheap, I doubt that someone would buy 50 I phones to get all those apps. If you add in the cost for 50 Iphones you can add an additional 17,500 dollars, plus $69.99 per phone per month equals, $3,499 per month phone plan fees. Plus your inital investment of $71,442.

First Months cost: $92,441
Phone Plan Cost per Year:$41,988

Does it come with a keyboard and Microsoft Office?

Dar

March 19, 2009 10:35 AM

How about some real business related information, like the increase in apps sold per phone based on numbers available in store (if any), or the number of iPhones sold vs. apps available in the store, the (estimated) amount Apple might make on a phone vs. the applications sold against that phone and how changes there might contribute to Apple's results. But talking about what it would cost to buy all the apps?

mark

March 19, 2009 12:46 PM

that reference should be 148Apps, not 149Apps

more sloppiness.

watchdog

March 19, 2009 12:53 PM

@Joe Crescenzi: Although there is no official App Store for Macs, Apple does have a downloads page/section on apple.com. That section highlights thousands of apps for the Mac, and includes direct links for downloads for free, shareware, and commercial apps. (For commercial, it's mostly updates.)

Apple doesn't collect any fee from developers, as the downloaded software isn't hosted by Apple itself.

Margaret Johnson

July 29, 2009 1:20 PM

Although with these numbers, it seems Apple does great. The developer of content doesn't make enough to survive. Plus, this model assumes people will download more apps. Why? More likely people lock on a few apps and then only use them.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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