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iWork suite for iPad projected to earn Apple $40M a year

post #1 of 38
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A "rough" estimate of sales of the iWork suite of applications for the iPad predicts that Apple could reach more than $40 million a year in sales of its mobile office software.

Silicon Alley Insider on Monday suggested that Apple has already earned more than $3 million in sales from Pages, Keynote and Numbers, which cost $10 each. That total was based on discussions with developers who have had applications in the top 10.

The report assumes that a top paid iPad application sells about 7,500 copies on a Saturday or Sunday, and about 2,500 on a weekday. Since the iPad debuted in early April, the three iWork applications have remained among the top selling software on the App Store. And priced at $10 each, the applications have also paved the way for other software to have a higher price than the bargain $0.99 applications that dominate the App Store for the iPhone and iPod touch.

With estimated revenue of $825,000 per week, that works out to more than $40 million a year earned from the three applications, assuming sales maintain the same pace. Of course, sales could go higher too, as currently the iPad is only available in the U.S. Apple has just begun accepting preorders in nine additional countries in preparation for a May 28 launch. Nine more countries will have iPad availability come July.

"It shows there is a real appetite for serious apps on the iPad, a device that many have shrugged off as a toy," author Jay Yarow wrote. "It also suggests that Microsoft and Google may want to make sure their office suites -- whether Web-based or apps -- work well on the iPad."

For comparison, Silicon Alley Insider noted that Google generates about $50 million a year in sales from its Web-based office applications around the world, on a whole range of devices. The undisputed market leader, Microsoft, sells $4 billion of its Office suite each quarter, bringing in $2.6 billion of profit.



In addition to keeping all of the proceeds from its own applications, Apple also takes a 30 percent cut of paid software sold by third parties on the App Store. Apple has said that while the App Store has been very successful, it is not a big revenue generator for the Cupertino, Calif., company.

While iWork for the iPad has had a strong start, Apple has also found success with its iWork suite on the desktop, which saw a 50 percent increase in sales in 2009. The sales spike was credited to the $169 box set that includes Mac OS X 10.6 Snow Leopard, iWork and iLife.


The figure was estimated by SAI using sales reports by other top ten developers, and makes lots of assumptions about the run rate of app sales. It doesn't figure in the iPad's international expansion or the potential for iPad sales to either level off after satiating demand, or expand dramatically over the course of the year.

Software sales a small part of Apple's revenues

Apple reported net software sales of $634 million in the first calendar quarter of 2010, or roughly $2.4 billion per year, making software sales and particularly the $10 iWork apps a very minor part of the company's overall business, now reaching toward $50 billion in revenues. Still, Apple's ability to deliver its multitouch productivity suite on time at the iPad launch, and its decision to take on that task itself, indicate an interesting new direction for the company.

Apple's reported earnings for software sales include Mac OS X and its own applications, sales of third party software, as well as sales of AppleCare, MobileMe and other Internet services.

In contrast to its $634 million in quarterly software sales, Apple reported $3.8 billion in Mac hardware sales, $1.9 billion in iPod sales, $5.4 billion in iPhone sales, and $472 million in peripheral sales in the first quarter. Apple also reported quarterly sales of $1.3 billion in "other music related products and services," which includes iTunes Store sales, iPod services, and Apple-branded and third-party iPod accessories.

Sales of iWork apps for iPad are therefore likely to be included in the company's reports for "other music related products and services" rather than being grouped in with its conventional retail software earnings.
post #2 of 38
Just shows to go that the big money isn't in the software itself, although the software is necessary to drive the sales of hardware.
post #3 of 38
Quote:
Originally Posted by Foo2 View Post

Just shows to go that the big money isn't in the software itself, although the software is necessary to drive the sales of hardware.

Yes, the iWork suite also gives the device credibility. 40 Million is petty cash for a company as big as apple.

Wow 4 billion a quarter revenue for office! Not sure if 40 million is attractive enough for them to enter the app store any time soon.
post #4 of 38
These number seem WAY LOW to me:

I can see Apple selling 15-20 million iPads per year. I can also see 50% or more users eventually buying iWorks because it makes the iPad so much more versatile (and laptop-like).

This translates to $225-300 million per year.

Add to this the inevitable major upgraded versions (most likely not free) and you have the potential for many times more income than this "Silicon Alley Insider" has predicted.
post #5 of 38
Why is it that AppleInsider's home page is being overwhelmed by flash based advertising that takes up over half of the width of the home page?
post #6 of 38
Quote:
Originally Posted by DCJ001 View Post

Why is it that AppleInsider's home page is being overwhelmed by flash based advertising that takes up over half of the width of the home page?

they dropped horizontal flash ads into the space designed for verticle
post #7 of 38
Quote:
Originally Posted by DCJ001 View Post

Why is it that AppleInsider's home page is being overwhelmed by flash based advertising that takes up over half of the width of the home page?

HTML5 is broken

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post #8 of 38
Now how about some serious Adobe apps for mobile workers?

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post #9 of 38
Yes, this will surely make a significant difference in the earnings of Apple. One of the reasons why its stock rose by almost 7.5%, as of this writing. Maybe if they itemize the Apple TV, it would have gone back to the record high of $270.

CGC
post #10 of 38
I don't care for the iWork apps (which I Love) being referred to as "mobile office software", sounds too much like Microsoft Office. Maybe I'm too picky. Why not mobile creative software, I dont use iWork for office work at all, creative is where its at.
post #11 of 38
Quote:
Originally Posted by DCJ001 View Post

Why is it that AppleInsider's home page is being overwhelmed by flash based advertising that takes up over half of the width of the home page?

Quote:
Originally Posted by stevetim View Post

they dropped horizontal flash ads into the space designed for verticle

Thanks for the response.

But here's a more curious question:

I went to their contact page at:

http://www.appleinsider.com/contact.php

Why were my e-mails to the editor and for submitting feedback regarding errors rejected as invalid e-mails?
post #12 of 38
Quote:
Originally Posted by DCJ001 View Post

Why is it that AppleInsider's home page is being overwhelmed by flash based advertising that takes up over half of the width of the home page?

I use ClicktoFlash...clicktoflash.com
post #13 of 38
It's just a shame iWork on the iPad is a pile of crap. Office HD is so much better.

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post #14 of 38
Quote:
Originally Posted by Foo2 View Post

Just shows to go that the big money isn't in the software itself, although the software is necessary to drive the sales of hardware.

If I were Apple, they should invest more money, billions if needed to significantly improve iWorks or their Office suites so that it would not only be compatible with MS Office, but evenntually rival it.


The focus would be to make it even more "feature efficient", i.e., avoid the bloat of the MS Office -- but still contain the essential features -- including spell check, scientific notation and mathematical equations, a separate library that will call a dictionary (online if in the internet), special characters database, etc.

Moreover, they should improve upon the version offered in the iPad to correct issues raised by early users.


Quote:
Originally Posted by webhead View Post

I don't care for the iWork apps (which I Love) being referred to as "mobile office software", sounds too much like Microsoft Office. Maybe I'm too picky. Why not mobile creative software, I don’t use iWork for office work at all, creative is where it’s at.

You may not need it but many people use word processing expecially, a select group the "Presentation" and then spreadsheet. All three I use, especially word and speadsheet. I would gladly replace MS Office completely once the iWorks become more improved.

Jf I were Apple, I would even consider giving it for free, as much as their iLife software is free (???) The iLife is also another area where the software could be improved even further, especially the iPhoto. If Apple would really want to compete further with Adobe, tbhey should include more "advanced" photo editing in the iPhoto.

CGC
post #15 of 38
Quote:
Originally Posted by AppleInsider View Post

The report assumes that a top paid iPad application sells about 7,500 copies on a Saturday or Sunday, and about 2,500 on a weekday. Since the iPad debuted in early April, the three iWork applications have remained among the top selling software on the App Store. And priced at $10 each, the applications have also paved the way for other software to have a higher price than the bargain $0.99 applications that dominate the App Store for the iPhone and iPod touch.

With estimated revenue of $825,000 per week, that works out to more than $40 million a year earned from the three applications, assuming sales maintain the same pace. Of course, sales could go higher too, as currently the iPad is only available in the U.S. Apple has just begun accepting preorders in nine additional countries in preparation for a May 28 launch. Nine more countries will have iPad availability come July.

People who don't understand business finances shouldn't be writing about them.

That number (even if all your guesses is correct) is REVENUE, not EARNINGS. You start with revenue. Then you subtract all the direct costs (mostly hosting costs in this case). Then you subtract all the indirect costs (marketing, product development, support, admin overhead, etc). Whatever remains is earnings. Clearly, that's a much, much smaller number than the revenues number you're citing.

In fact, it wouldn't surprise me if Apple doesn't show ANY profit (earnings) on $40 M in sales for this product.

Quote:
Originally Posted by DCJ001 View Post

Why is it that AppleInsider's home page is being overwhelmed by flash based advertising that takes up over half of the width of the home page?

Because they're click wh**es. I really miss the days when the Internet was about offering a service to our customers or providing information rather than making all your money on advertising.
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post #16 of 38
Someone explain to me how Google makes money off of Google Docs, which I assume is what we're talking about?

No really, I want to know how they are making money. Search and ads are one thing, but all this free stuff? I don't see ads in Google Docs.
post #17 of 38
Quote:
Originally Posted by MightySpitz View Post

Someone explain to me how Google makes money off of Google Docs, which I assume is what we're talking about?

No really, I want to know how they are making money. Search and ads are one thing, but all this free stuff? I don't see ads in Google Docs.

They give free to consumer market and sell to business at a nominal rate.
post #18 of 38
I checked out the iWork apps for iPad last week, and for the usage I'd have, they don't cut the mustard (keynote anyway).

The capabilities of the iPad version just aren't comparable to the Mac OS version that I use daily for teaching. While I don't make use of a lot of the fancy transitions and the like, I do use presenter notes all the time, which aren't supported on the iPad version.

Also, the iPad itself can't simultaneously do video out of the presentation and show the presenter display on the iPad because of its video processor limitations. Once it can do that I'll be much more likely to buy one.

Here's waiting until V2 to see if they get it right.
post #19 of 38
Quote:
Originally Posted by Zoolook View Post

It's just a shame iWork on the iPad is a pile of crap. Office HD is so much better.

People who have bought it only give it 2.5 stars. Can you tell me why it is better before I plunk over the $8.
post #20 of 38
Quote:
Originally Posted by stevetim View Post

People who have bought it only give it 2.5 stars. Can you tell me why it is better before I plunk over the $8.

Because people have unrealistic expectations for a piece of V1 software that is priced less than most shareware.
post #21 of 38
Quote:
Originally Posted by stevetim View Post

People who have bought it only give it 2.5 stars. Can you tell me why it is better before I plunk over the $8.

2 main reasons

1) You can load and save files directly to iDisk in the cloud. Why you can't do that on iWork is baffling, given the $99 or $149 we pay for MobileMe.

2) You can load and save files directly to googledocs.

So on both services, you can open a file from MobileMe/Googledocs, edit it and resave. You can also move files from you iPad to either of those services, or vice versa AND you can load/save files on a LAN in the same way, and again move files from the iPad to your Mac or PC via WiFi. You can also load and save the files in native .doc and .xls rather than converting them to iWork format and then back again.

With iWork, you can't do any of this... why anyone at Apple thought it'd be easier to drag documents into iTunes, sync, edit and then email them to someone (usually yourself) is anyone's guess.

I am looking at the ratings now on my iPad (by most recent).

5 Stars - 21
4 Stars - 22
3 stars - 35
2 stars - 22
1 star - 44

Ordering by most critical, the one stars are all things like "doesn't support tables, no good for me" but the one comment that keeps coming up is the "save as" issue, which is a pain and will probably be fixed really soon. But one star for that? People are stupid.

The Googledoc bug was fixed ages ago.

Do not overrate what you have received, nor envy others.
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Do not overrate what you have received, nor envy others.
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iPhone 5 Black 32GB

iPad 3rd Generation, 32GB

Mac Mini Core2Duo 2.26ghz,...

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post #22 of 38
Quote:
Originally Posted by DCJ001 View Post

Why is it that AppleInsider's home page is being overwhelmed by flash based advertising that takes up over half of the width of the home page?

Your role is to consume the ad message.

OBEY the Flash Overlords.
post #23 of 38
For me personally they will be getting sales of Numbers and Pages when I get my iPad (which isn't going to be in New Zealand until July). Add Bento to the mix which I use all day everyday in my job and I will have the most perfect solution that will make me extremely productive.

I love Pages and Numbers but I have no need for Keynote really.
post #24 of 38
Quote:
Originally Posted by Bowser View Post

I checked out the iWork apps for iPad last week, and for the usage I'd have, they don't cut the mustard (keynote anyway).

The capabilities of the iPad version just aren't comparable to the Mac OS version that I use daily for teaching. While I don't make use of a lot of the fancy transitions and the like, I do use presenter notes all the time, which aren't supported on the iPad version.

Also, the iPad itself can't simultaneously do video out of the presentation and show the presenter display on the iPad because of its video processor limitations. Once it can do that I'll be much more likely to buy one.

Here's waiting until V2 to see if they get it right.

It's not the iPad's video limitations at all it's all down to the software and Apple traditionally release a product that is stable before adding features. Fear not because Apple will release more powerful versions.
post #25 of 38
Pages and Keynote are great. Numbers is still rubbish. It can make attractive graphs, but it's crippled compared to Excel. Speaking about the real versions on Mac... I don't have an iPad.

Also, iWork needs a Windows reader if it's ever to gain any real clout.
post #26 of 38
Quote:
Originally Posted by Zoolook View Post

2 main reasons

1) You can load and save files directly to iDisk in the cloud. Why you can't do that on iWork is baffling, given the $99 or $149 we pay for MobileMe.

2) You can load and save files directly to googledocs.

Ok interesting.

With apple you can save to iWork, but it would be nice to save to mobile me or google docs.

Thanks
post #27 of 38
Quote:
Originally Posted by Bueller_007 View Post

Pages and Keynote are great. Numbers is still rubbish. It can make attractive graphs, but it's crippled compared to Excel. Speaking about the real versions on Mac... I don't have an iPad.

Also, iWork needs a Windows reader if it's ever to gain any real clout.

iWork.com maybe.
post #28 of 38
Quote:
Originally Posted by stevetim View Post

Ok interesting.

With apple you can save to iWork, but it would be nice to save to mobile me or google docs.

Thanks

Umm doesn't it save to iWork.com?
post #29 of 38
Quote:
Originally Posted by lowededwookie View Post

Umm doesn't it save to iWork.com?

Yes I abbreviated ... I mean't iwork.com. I was pointing out that is what I do. But it would be nice to save to my mobileme idisk and or google docs.
post #30 of 38
Quote:
Originally Posted by stevetim View Post

Yes I abbreviated ... I mean't iwork.com. I was pointing out that is what I do. But it would be nice to save to my mobileme idisk and or google docs.

The value of google docs is the quick export of microsoft windows office supported formats that iWork on the iPad does not yet support.
post #31 of 38
Quote:
Originally Posted by AppleInsider View Post

A "rough" estimate of sales of the iWork suite of applications for the iPad predicts that Apple could reach more than $40 million a year in sales of its mobile office software.

rough... could... predict...
Quote:

Silicon Alley Insider on Monday suggested that Apple has already earned more than $3 million in sales from Pages, Keynote and Numbers, which cost $10 each. That total was based on discussions with developers who have had applications in the top 10.

suggested... based on...
Quote:

The report assumes that a top paid iPad application sells about 7,500 copies on a Saturday or Sunday, and about 2,500 on a weekday. Since the iPad debuted in early April, the three iWork applications have remained among the top selling software on the App Store. And priced at $10 each, the applications have also paved the way for other software to have a higher price than the bargain $0.99 applications that dominate the App Store for the iPhone and iPod touch.

assumes...
Quote:

With estimated revenue of $825,000 per week, that works out to more than $40 million a year earned from the three applications, assuming sales maintain the same pace. Of course, sales could go higher too, as currently the iPad is only available in the U.S. Apple has just begun accepting preorders in nine additional countries in preparation for a May 28 launch. Nine more countries will have iPad availability come July.

estimated... assumed...could...
Quote:

"It shows there is a real appetite for serious apps on the iPad, a device that many have shrugged off as a toy," author Jay Yarow wrote. "It also suggests that Microsoft and Google may want to make sure their office suites -- whether Web-based or apps -- work well on the iPad."

suggests...
Quote:

For comparison, Silicon Alley Insider noted that Google generates about $50 million a year in sales from its Web-based office applications around the world, on a whole range of devices. The undisputed market leader, Microsoft, sells $4 billion of its Office suite each quarter, bringing in $2.6 billion of profit.



In addition to keeping all of the proceeds from its own applications, Apple also takes a 30 percent cut of paid software sold by third parties on the App Store. Apple has said that while the App Store has been very successful, it is not a big revenue generator for the Cupertino, Calif., company.

While iWork for the iPad has had a strong start, Apple has also found success with its iWork suite on the desktop, which saw a 50 percent increase in sales in 2009. The sales spike was credited to the $169 box set that includes Mac OS X 10.6 Snow Leopard, iWork and iLife.

I'm struggling to understand where there is any news in any of this..
post #32 of 38
Quote:
Originally Posted by lowededwookie View Post

iWork.com maybe.

Apple is almost certain to start charging for iWork.com once it gets out of beta. I shouldn't have to pay for a subscription just so I can show a Keynote presentation on a Windows box--or a Mac without Keynote--at a conference, etc. When you create a document, you expect people to be able to view it.

And yes, I know you can export to PPT, but it often makes a mess and unless you have a Windows computer to test on, you won't know until it's too late. You're better off just writing the damn thing in PowerPoint in the first place.
post #33 of 38
Quote:
Originally Posted by Bueller_007 View Post

Apple is almost certain to start charging for iWork.com once it gets out of beta. I shouldn't have to pay for a subscription just so I can show a Keynote presentation on a Windows box--or a Mac without Keynote--at a conference, etc. When you create a document, you expect people to be able to view it.

And yes, I know you can export to PPT, but it often makes a mess and unless you have a Windows computer to test on, you won't know until it's too late. You're better off just writing the damn thing in PowerPoint in the first place.

It depends on how Apple charges for it. It seems plausible they would roll it into MobileMe subscriptions which means if you have one then it will be free but if not then you pay. That's how I would do it at least.

That being said there's still a lot to do on iWork.com so the charges will be some time away.
post #34 of 38
Quote:
Originally Posted by lowededwookie View Post

It's not the iPad's video limitations at all it's all down to the software and Apple traditionally release a product that is stable before adding features. Fear not because Apple will release more powerful versions.

I was told by a "Genius" at the Walnut Creek store the iPad only has one video mode, either internal or output and that if I did external video the built in screen would go off because there is 'only one video card' in the iPad.

I have no doubt that subsequent versions of the software will be improved, but for real presentation work like giving a research methods lecture, not just coming up with baffle-with-bullshit effects and bells and whistles, V1 of Keynote for iPad just doesn't cut it for me.

I will wait until next year when the specs get bumped up, hopefully the prices will drop a little, and I'll be able to do video out with Keynote AND also have presenter notes available to me on the iPad or via my iPhone.
post #35 of 38
Quote:
Originally Posted by DCJ001 View Post

Thanks for the response.

But here's a more curious question:

I went to their contact page at:

http://www.appleinsider.com/contact.php

Why were my e-mails to the editor and for submitting feedback regarding errors rejected as invalid e-mails?

Aww come on and give the poor guy a break, he was tired.!


Since the downturn the A.I. I.T. budget and Kaspers automated slave have taken a big hit.
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post #36 of 38
I use Pages and Keynote regularly on my Macs and plan to get them for the iPad when it arrives on the 28th (hope, hope). I read a good review over at MacInTouch that touched on some of the negatives well and compared to OmniGraffle, which makes sharing files with your computer easy.

I'll try it and then send feedback to Apple. Hopefully they will make lots of improvements.

Again, I really think that these apps were an effort on Apple's part to show what is possible on the iPad to get developers moving fast. Now they have to not drop the ball and stay ahead...

 

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Your = the possessive of you, as in, "Your name is Tom, right?" or "What is your name?"

 

You're = a contraction of YOU + ARE as in, "You are right" --> "You're right."

 

 

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post #37 of 38
Pages for iPad is awful. Look at the reviews for it. Rarely am I so pleased or disappointed with a product that I give a review but I left one for it so others may avoid wasting their money. If I had to rank the worst programs I have ever used, it would rank #1. That's how bad it sucks. It reformats everything, makes it difficult to save what you've created or edited, the toolbar is awful, the formatting abilities are awful. The whole thing is a horrible mess. I like my iPad but I hate iWork for iPad.

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post #38 of 38
Quote:
Originally Posted by oneaburns View Post

Pages for iPad is awful. Look at the reviews for it. Rarely am I so pleased or disappointed with a product that I give a review but I left one for it so others may avoid wasting their money. If I had to rank the worst programs I have ever used, it would rank #1. That's how bad it sucks. It reformats everything, makes it difficult to save what you've created or edited, the toolbar is awful, the formatting abilities are awful. The whole thing is a horrible mess. I like my iPad but I hate iWork for iPad.

I just can't understand what in the heck they were thinking. There is no reason why it should change the format just to open a document. That is a huge fail for users and something that is going to cripple business use. I was going to order the 3g ipad for my wife but have held off after we found out about the format issues. Totally useless for her if it borks the layout by simply opening a document.
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