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Fri, Mar 19, 2010 - 08:25 PM EDT  —  AAPL: 222.2499 (-2.4001, -1.07%)  |  NASDAQ: 2374.41 (-16.87, -0.71%)

Apple’s App Store already close to becoming a billion-dollar business?
Tuesday, March 10, 2009 - 04:38 PM EDT

"As Apple's 9-month young App Store redefines the smartphone industry and spawns copycats, actual app sales are approaching a frequency that could see the digital shop become a billion-dollar business before year's end," Sam Oliver reports for AppleInsider.

"In a report on quarterly smartphone market trends released Tuesday, Needham & Co. analyst Charlie Wolf noted that the number of applications on the App Store recently surpassed 25,000, with actual downloads exceeding 500 million," Oliver reports. "'[T]he iPhone App Store has redefined the smartphone industry,' he said. 'In a game of 'follow the leader,' most operating system platforms, including Android, Windows Mobile, Palm and Symbian, announced they were opening similar online stores.'"

Oliver reports, "Attempting to quantify actual dollars generated from app sales (which Apple doesn't report specifically), the analyst backed his way out of a reported $303 million increase in the company's 'music-related sales' for December quarter, which includes sales from the App Store/iTunes Store. Assuming iTunes sales were flat year-over-year but iPod accessory sales grew in line with the players themselves, he subtracted $100 million to arrive at an App Store sales estimate of $203 million for the three-month period ending December."

Oliver reports, "If accurate, the assessment would have the App Store generating approximately $800 million on a yearly basis, already surpassing a 'neutral' case scenario for the 2009 calendar year outlined by fellow analyst Gene Munster of Piper Jaffray last June. With the number of applications downloaded each quarter only increasing, it's conceivable the store could reach the $1 billion milestone and possibly Munster's $1.2 billion 'Aggressive' case scenario by year's end."

Full article here.

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Mar 10, 09 - 04:41 pm Comment from: cmw

Help me, I'm an app-aholic!

Mar 10, 09 - 04:51 pm Comment from: seaplaner

the app store will only get bigger

according to this, new iphone details are already released to developers:
http://www.derekunderwood.com/general-computer/details-regarding-new-iphone-and-ipod-touch/

Mar 10, 09 - 05:18 pm Comment from: occams razor

I've downloaded 167, someone stop me, no wait, don't. Most are 59p here in the UK, amazing value and fun.

Mar 10, 09 - 05:23 pm Comment from: Anti-Analyst

Running in the face of an article like this are the recently published analytical reports predicting doom-and-gloom for Apple and its earnings. The frigtards who reign over Wall Street's analyst desks are completely clueless about how Apple makes money, and about the continued market potential for its products and services. And as such, they continue to spew out often-biased, and usually clueless reports arrived at by anatomic extraction rather than good old fashioned reasoning and solid homework.

Few analysts (and the good ones are typically amateurs who put the professionals to shame) clearly understand the revenue model for the iPhone and iPod touch. Few analysts clearly understand how much cash is generated by iPhone subscriptions, and how much that cash continues to grow each month. And fewer still understand how much profit Apple could be racking up from the iTunes Store - for music, books, videos, apps and more.

While I must be mindful that Apple's share of any app sold is a percentage from which other costs must be taken out, there is still a ton of revenue that they taken in at net of total sales. By setting the pricing bar as low as they did, Apple has generated vast demand. My hope is that this is helping developers as well. Only time will tell.

I hope this next quarterly call, Apple again puts the analysts in their place and blows through earnings. Sadly, the clueless analysts will again look in dour fashion on Apple's projected earnings, and drive the stock price down - again. But I am a believer in the words of Warren Buffett and Peter Lynch. A stock's true value eventually tracks its earnings. The two don't move necessarily in lock-step. But over time, I firmly believe that my patience will be rewarded. And that's more than almost any analyst truly understands.

Mar 10, 09 - 08:48 pm Comment from: zek

@Anti-Analyst

Don't worry, the analists are not unaware of the offset iphone earnings, they'll be talking about them when it suits them, when they start to show real growth in the figures. |Then they will be talking about how that is really deferred from previous sales, and so should be ignored.

The 'real' figures are much lower and stockholders should panic.

Mar 10, 09 - 09:32 pm Comment from: ken1w

Apple is an oasis of reliable profit, NOW from multiple sources. REAL investors (the type who buys a bargain for long-term profit) should be buying more AAPL and holding on to what they already have. But if you need the cash to pay your mortgage next month, don't expect any quick gains.

A billion dollars in revenue from the App Store means Apple made $300,000,000 minus operating expenses. Seems like the iTunes Store is going to become a profit center after all, to add to the profit from Mac, iPod, and iPhone sales.

Mar 10, 09 - 11:14 pm Comment from: nine screens is not enough

next os will have apps as list just like songs

steve is the master at making us beg and scream

I think no copy and paste is so funny

watch it will only run on os 3.0 witch is out of the 2 year agreement

want cut and paste

$10 on 50 million phones

or hell I have to upgrade

here kitty kitty here kitty kitty

i want steve to show me some ilove :-}~

Mar 11, 09 - 03:37 am Comment from: BC Kelly

Change The World™


And make a shit-load of money in the process




BC

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