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Apple has now paid $4 billion to App Store developers

post #1 of 18
Thread Starter 
The value of Apple's platforms is reflected in the amount of revenue the company's App Stores pays its developers, a figure that has now hit $4 billion.

Apple first announced having paid out over $1 billion to developers in June 2010, after just over two years of App Store sales involving over five billion app downloads.

Last summer, the amount paid to developers had jumped to 2.5 billion, more than doubling in both size and pace in just one year.

Four months later in October at the iPhone 4S launch, Apple stated it had sold 250 million iOS devices and that the App Store had seen a total of 18 billion downloads, paying out over $3 billion to developers.

Apple has now reached $700,000 in payments to developers in just a quarter, pushing its cumulative payouts to developers above $4 billion.

Google recently reported matching Apple's milestone of 250,000 mobile device sales across all of its Android licensees, but Apple has upped its number above 315 million iOS devices, due to sales of 67.87 million iOS products in the holiday quarter.

In December, Google Chairman Eric Schmidt predicted that mobile developers would "prioritize" Android development over iOS in the first half of 2012, stating that "ultimately, application vendors are driven by volume, and volume is favored by the open approach Google is taking."

Commercial developers in general appear to be more interested in revenue than volume distribution of their code, but Google itself has pursued a strategy that favors volume over revenue, giving away its software in hopes of establishing a broad advertising platform.

Last October, Google reported a mobile revenues "run rate" approaching $2.5 billion annually, with much of that revenue coming from iOS devices, not just Android. Apple's $13.06 billion in profits for the holiday quarter was greater than Google's entire revenue of $10.6 billion.

One year ago, Google's Android platform manager Eric Chu said that his company was "not happy" about the limited number of apps actually being purchased by Android users, and described plans to turn those figures around.
post #2 of 18
Was it really necessary to bring up what Eric Schmidt said in an article about what Apple pays App Store developers? I mean, the article itself is off topic!

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #3 of 18
Quote:
Originally Posted by AppleInsider View Post

Apple has now reached $700,000 in payments to developers in just a quarter, pushing its cumulative payouts to developers above $4 billion.

Ummm, that number should have 3 more zeros and another comma.

$700,000,000

$700 million

$7 hundred million

Why does Apple bashing and trolling make people feel so good?

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Why does Apple bashing and trolling make people feel so good?

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post #4 of 18
Actually, Apple hasn't paid developers anything. Apple's users have paid $5.2B in payments that Apple has processed for the developers for a 30% cut.

If Apple paid us, they'd have to give us 1099's... just sayin'...
post #5 of 18
Google has big dreams while Apple makes dreams come true.

Slow and steadily Apple works its magic. What a headache Apples success must be to Google. Chairman Eric Schmidts prognostication skills seem to be failing him.

When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

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When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

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post #6 of 18
Quote:
Originally Posted by Booga View Post

Actually, Apple hasn't paid developers anything. Apple's users have paid $5.2B in payments that Apple has processed for the developers for a 30% cut.

If Apple paid us, they'd have to give us 1099's... just sayin'...

That's right. It's always felt a bit odd the way Apple talk about how much they've paid developers, when they're just a transaction processor, a conduit. It's quite clearly spin. Though in fairness there would be no such revenue stream had they not created the platform.
post #7 of 18
Quote:
Originally Posted by Booga View Post

Actually, Apple hasn't paid developers anything. Apple's users have paid $5.2B in payments that Apple has processed for the developers for a 30% cut.

If Apple paid us, they'd have to give us 1099's... just sayin'...

Your tag line is a proof of our time wasted in reading your drivel. If you believe in what you write, don't apologize for it with some lame tag line at the end.
post #8 of 18
Another day, another article misquoting Schmidt.
post #9 of 18
It is true that without the Apple store,none of them would have seen a dime.

However,it is sht like this which gives Apple lovers a bad name .
Quote:
Originally Posted by ElectroTech View Post

Your tag line is a proof of our time wasted in reading your drivel. If you believe in what you write, don't apologize for it with some lame tag line at the end.
post #10 of 18
Quote:
Originally Posted by AbsoluteDesignz View Post

Another day, another article misquoting Schmidt.

Please enlighten us as to how this is a misquote, if it actually is one. At least a link rather than mere baseless claims.

Thanks.
post #11 of 18
Quote:
Originally Posted by GregInPrague View Post

Please enlighten us as to how this is a misquote, if it actually is one. At least a link rather than mere baseless claims.

Thanks.

There's no point.
post #12 of 18
Quote:
Originally Posted by AbsoluteDesignz View Post

There's no point.

Then you shouldn't have brought it up in the first place. Either your intent is to correct the articleand if it's wrong, you shouldor there wasn't a single reason for this.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #13 of 18
$1b for 5b downloads averages just 20c/download... and that's revenue not profit for the developer. So a million downloads on average nets the developer $200K in revenue. One wonders how many devs flip a coin each morning - heads I write an app, tails I buy a lotto ticket.

Meanwhile Apple made $13b profit last quarter...
post #14 of 18
And it get worse.
18 billion and $3 billion to the developers = 16c for each download.

Those 18Billion is that a download figure for each single device/download or a buyer did download the app and used them on one or more devices?

If not then each device have 72 apps.

How many developers are writing Applications? Is this number known?

Pointing to an other article here at AI, about there savings, Apple could raise the profit for the developers. 16c is nothing. You have to sell a lot to have a living.

Also I think the Store need a remake with this kind of number of Applications.
post #15 of 18
Quote:
Originally Posted by lord anubis View Post

And it get worse.
18 billion and $3 billion to the developers = 16c for each download.

Those 18Billion is that a download figure for each single device/download or a buyer did download the app and used them on one or more devices?

If not then each device have 72 apps.

How many developers are writing Applications? Is this number known?

Pointing to an other article here at AI, about there savings, Apple could raise the profit for the developers. 16c is nothing. You have to sell a lot to have a living.

Also I think the Store need a remake with this kind of number of Applications.

Well to actually analyze the numbers you cannot do naive simple division analysis.

As for number of downloads, that would be a single download per account, so yes, those can go on multiple devices tied to that appleID account-wise. And remember downloads is not apps, many upgrades are in there too because they are also downloads, I have at least 5 updates per week spread across 99 apps. Over a year that would be about 250 updates for 100 apps (3-2 ratio) take that result and divide by 321Million devices and you can say an average is 22 apps per device. (The actual apps per device will be higher because I did not try to correct for multiple devices per account, making the result skew lower per device.)

Over 40% of the App Store apps are free, using ad revenue to pay for them, lump in the 99-cent apps too because that is how those are priced and we are over 60% of the apps on the store. Now you can also try to correct for the fact many more free app will be downloaded than paid apps so the 60% figure is WAY low. Of my 99 apps, I paid for 11 of them (including the 99-centers). I'll assume I'm average and say 9-1 in favor of free and 99 cent apps over other paid apps (this skews conservatively).

18 billion apps downloaded so 90% free or 99 cents, adjust the for the 3-2 update ratio and we can estimate 7.2 billion original app downloads. Using the 90 percent no cost/99-cent ratio that leaves us with 720 million paid apps. Dividing that out conservatively shows an average $4.17 per app sold flow thru to the developers. Further acknowledging that most software is crap and doesn't hit big sales we can adjust for that using the 80% rule of thumb which turns into $20.83 per app sold flow through.

Seeing as how I have several $19.99 apps and a couple $49.99 apps to go with the couple $2.99 or so games/utilities I can comfortably accept my estimations as not being out to lunch so far they are useless.

So be VERY careful what numbers you decide to divide by. It is easy to disagree with specific estimates I made along the way, but you can adjust the with your estimates for those, update the math and still end up with more than several dollars per app, a far cry from the 16 cents each you tried to say developers were getting.
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post #16 of 18
Quote:
Originally Posted by Tallest Skil View Post

Then you shouldn't have brought it up in the first place. Either your intent is to correct the article–and if it's wrong, you should–or there wasn't a single reason for this.

There was an entire article on many tech blogs (maybe even here) where Rubin clarified the definition of an activation...yet, a month or so later, and boom, same ol' parroting of BS.


Edit: oh, just realized I was talking about the Schmidt thing...

Schmidt never said devs WILL prioritize Android...never.

He said devs will code for ICS+ perhaps even first.

He never said will prioritize, he said MAY prioritize...huge difference.
post #17 of 18
Quote:
Originally Posted by AbsoluteDesignz View Post

There was an entire article on many tech blogs (maybe even here) where Rubin clarified the definition of an activation...yet, a month or so later, and boom, same ol' parroting of BS.


Edit: oh, just realized I was talking about the Schmidt thing...

Schmidt never said devs WILL prioritize Android...never.

He said devs will code for ICS+ perhaps even first.

He never said will prioritize, he said MAY prioritize...huge difference.

And he based it all on the assumption fail that the primary reason devs chose what to code for is based on platform size, rather than projected revenue. His analogy to the old PC market size argument is broken because in the old PC market the devs made more money in PCs because the market was larger and there was very little actually free software. With Android the market is a little larger in raw platform numbers shipped most quarters, but the dev revenue is radically lower due to platform user behavior.

Until that calculus changes significantly, there will not be any large shifting away from a worst case simultaneous, to iOS first development bias across the dev space. There will always be individual devs that run contrary to the norm of the rest, but they are statistical outliers for the foreseeable future.
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post #18 of 18
Quote:
Originally Posted by Hiro View Post

Well to actually analyze the numbers you cannot do naive simple division analysis.
...
So be VERY careful what numbers you decide to divide by.

Well you are right and wrong. A simple analysis doesn't give you an average (or median etc.) per sale.

However somebody has to write those free apps. Many are of course written by developers who also write paid apps - they hope the free apps will encourage you to purchase paid ones (and this is part of Apple's recommended approach - no demos, just free reduced feature set apps). So developers hope the cost of producing many of those free apps is covered by eventual sales.

Put another way, if a baker gives away 9 loaves for every one they sell for $3 with a production cost of 20c/loaf (so 10 loaves = $2 production cost) then they haven't made $2.80 on the sale but just 10c per loaf for a total of $1.

When trying to figure out the actual revenue for developers you really need to discount developers who provide only free apps (as they have other income). Without more detail in the numbers you cannot determine how big a factor these are, but I doubt it is huge.

However in the end just dividing the number of downloads by the revenue does give you the average per download - that is basic maths.
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