iPhone Apps to Overtake iTunes Music in Total Revenue

| Blog | June 13, 2012

iOS apps to generate over $4B in 2012 sales


Apple’s iTunes App Store is on track to hit a run rate of $4.3 billion in 2012, according to Apple analyst Horace Dediu of Asymco, who arguesappshavelikelyovertaken music as the largest source of Apple’s gross income from the iTunes store.

Dediu bases his predictions on the three figures Apple revealed at WWDC — 30 billion apps downloaded to date, $5 billion paid to developers and 400 million registered iTunes accounts.

According to Dediu’s calculations, consumers are now downloading more than 49.5 million apps a day. With Dediu estimating average price of an app sitting at $0.24 (including free apps), one can roughly extrapolate the annual number of iTunes app downloads, and therefore the App Store’s annual run rate, assuming the number of downloads holds reasonably steady.

If consumers continue to download apps at the same rate, they will download 18.67 billion apps this year, generating approximately $4.3 billion in sales. Of that, Apple will pay out about $3 billion to developers and keep $1.3 billion as part of its 30 percent share of gross app revenues.

By comparison, Dediu calculates consumers are downloading about 12 million songs a day, with Apple likely taking a smaller cut of the revenues from music sales. He estimates Apple has already paid more than $12 billion to record labels, compared to the $5 billion paid to developers.

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