Are Apps More Valuable to Apple Than Music?

Topics: IPhone, ITunes Store, App Store Pages: 3 (1101 words) Published: February 21, 2013
Are apps more valuable to Apple than music? Yes, by a long way Understandably, much of the post-keynote analysis of Apple's "Let's Talk About iPhone" event focused on hardware: the new iPhone 4S and the lack of an iPhone 5. Software also got a look-in, particularly the Siri voice control features of the new handset, and the imminent debut of Apple's iCloud service. Less feted, but no less important, were some significant figures around Apple's content business. 250 million iOS device sales have pushed total App Store downloads past the 18 billion mark, leaving music downloads from the iTunes Store (16 billion and counting) in their wake. Not that useful a direct comparison, of course, because a much bigger proportion of Apple's music downloads are paid than for iOS apps. There is still some fun to be had contrasting the value of music and apps for Apple, though. Asymco's Horace Dediu – one of the most perceptive analysts writing about the mobile industry right now – has taken the above numbers as his starting point for an exploration of the respective financial values of these two areas. He calculates that around 34 million iOS apps are being downloaded every day, versus around 8.3 million songs. Then, taking another big figure announced by Apple at its iPhone 4S event – $3 billion paid out to developers since the App Store's launch in 2008 – as well as standard music payouts for iTunes sales, he estimates that Apple is making around $75 million a month from apps, and $85 million from songs (admittedly, before costs including payment processing, bandwidth, storage, testing and marketing bring both closer to break-even). "Break-even or not, the way the data is trending it's pretty clear that Apps will be responsible for a the majority of content cash flow at Apple," writes Dediu. "At a billion downloads a month (and rising) the value in terms of revenues is already a run rate of $2.9 billion per year. This has been enough to overtake a business that has been...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Music app final guide Essay
  • Apple App Store Essay
  • a more Essay
  • Apple Essay
  • Apple App Store Review Guideline Essay
  • The Apple App Store Research Paper
  • Music Is More Than Entertainment Essay
  • Apple Essay

Become a StudyMode Member

Sign Up - It's Free