And I believe they are in their rights to lie also...
They don't want the studios/record labels, and COMPETITORS to know just how much they are profiting off of APPS/ITUNES...
It's a trade secret for the time being... I'm sure there is a way around fudging the numbers in a shareholder meeting in order to maintain a trade secret and keep your competitors guessing.
I am a shareholder of Apple and I really don't care how much they lie to me if they keep their accounting secrets from their competitors.... As long as they keep having record breaking quarters and the stock keeps rising toward 300...
One only has to think about the enormous sums that Apple (and virtually every other large high-tech company) spends on advertising to realize how immensely profitable it is for Apple to be running the "wildly successful" app store, whether or not this facet of their business generates huge direct profits. Instead of paying through the nose for more exposure via advertising, they're getting paid to spread the Apple brand to the four corners of the earth. Now that's brilliant!
Lying to shareholders about your company's finances is very, very illegal. I doubt Apple is doing it.
They are sort of misleading people. They aren't lying, and they are careful to use language like: "above break even", as to be legal. They never say how much above, for example. Somewhere along the way there's was the rumor Apple makes no money from iTunes and the analysts have started to believe it, Apple merely leave them believe it. They aren't force to announce specific figures, so they don't. But in a round about way they are sort of misleading people, albeit in a legal manner.
It's coming...along with the slew of non-computer computers they are bringing to the market. The iPad will herald the future of where Apple wants to go with their platform. As computing power of smaller devices increases, Apple will continue to drive traditional computers into niche groups (for professionals). Within 5-10 years, home users will not be offered a Mac computer but will have a variety of Apple smart products to choose from (extending out the iPhone, iTouch and iPad ecosystem). One will not be able to buy content for these consumer products via any other means than via the Apple App Store. This expansion of the ecosystem to more substantial applications will drive a tremendous amount of revenue for Apple.
I am pretty sure that the App Store gets more revenue and income for Apple then iTunes (music and movies). Since most movies and songs are stolen, but apps are not. Part of the reason why this is true is because these apps are cheap enough and useful enough that people are happy to pay the .99 cents to 1.25 for these apps. Even more expensive ones rarely go above $10 (of course Wolfram' $50 app is an exception). So running app store at about break even is as good as you can get in a world where a lot of digital content is obtained illegally for free.
What are the expenses for running the App Store besides obvious items like:
bandwidth
storage
the SDK
API development
approvals
accounting/payments
I can't come up with enough expenses to see it as anything but hugely profitable.
I'm not saying my list is all-inclusive, but what else comes to mind??
Dont forget the following things -
- Apple has to pay for Bandwidth, storage, etc., even on the Free Apps, where they make nothing
- Apple only gets paid for the first download of a paid app - zilch for upgrades.
- Credit Card companies would be eating up 2% of the payments. 2% seems small, but from Apple's perspective, 7% (2% of 30%) of the money they get goes to the Card processors. Not a tiny sum by any means.
- Bandwidth, Storage, Hardware, Employees are not exactly cheap.
- Apple has to pay more to ensure 100% reliability and good performance. If the downloads take too long, or if the store is down, it hurts their image way too much. See how much bad press Apple got when the approval process was slightly delayed. And remember, Apple has to pay for the Approval process for the Free Apps. Also, the bandwidth and hardware is determined by the peak load - when a new version of the OS is launched, etc. That is the reason we get such fabulous performance from the AppStore on most days.
- If the ratio of paid to total apps is 20% in the store, it would be like 5% when it comes to total downloads - most people pick free apps.
- Credit Card companies would be eating up 2% of the payments. 2% seems small, but from Apple's perspective, 7% (2% of 30%) of the money they get goes to the Card processors. Not a tiny sum by any means.
Apple is not paying 2% on their credit card companies, they will be paying under 1%
The App- and iTunes store are part of the Apple experience.
It's like saying iLife isn't profitable. Of course it's not.
I think the App- and iTunes store (as well as iLife and OSX itself) are helping Apple to differentiate itself from its rivals, and help them sell a lot of hardware.
With billions in cash on the bank you gotta admit they're doing something right. And I think the app store is one of those things.
it's ALL about the bottom line! No more, no less, well, with Apple there might be a few other things taken into effect, but even after that, it's still the bottom line.
If not, the cube would still be here. I and many others feel Apple never gave the Cube a chance.
I'm not surprised by this at all. App store apps are poor so people don't expect to pay a lot of money for them and this has created a culture of very low pricing as well as a trend for developers to create throw-away apps vs substantial apps (think MGS Touch vs MGS on the PSP or Star Wars the Force Unleashed). Many users gravitate towards free equivalents, especially for the apps that do very basic functions (most of them).
Some developers are making the effort like Gameloft and EA and now Rockstar porting their full GTA ChinaTown wars and pricing it at 1/3 the cost of the other consoles but the others need to wake up and stop treating the iphone like a mobile phone and more like a PDA and console. The first two are only half the speed of the PSP and the 3GS is faster.
The App Store has so much potential but content providers keep holding it down and they are only doing themselves harm. If I could rent every movie from itunes and have it stream down instantly, I'd be spending tons of money that I'm currently not spending. I'd pick up a reasonable subscription plan in no time. But the content providers don't allow it.
I'd be happy to spend £15 on the full Star Wars the Force Unleashed like the PSP version but I'm not buying the cut down one even at £3.50. Maybe over time it will develop into something better but I just wish there was a way to sift out the 90,000 or so junk apps that inevitably exist due to lazy developers trying to make a quick buck so that the real gems get seen.
I just can't find anything outside of Apple's top lists any more, which is pointless because they just keep pushing Doodle Jump down my throat. Is it the ball-in-a-cup fanclub playing this game or what?
If I can't find good content, I don't buy content, app store makes no profit. Simple.
even if they wrote STAR wars unleashed or even CALL for duty direct to iphone os and not ported over ...
isn't the iphone screen too small for war games ??
and isn't time for apple to commision all the top game companies to create top line best selling games for the whole apple family OR out right buy EA or bungie .
and if i sold 3 billion of anything i would make a profit .
Got a question for people who have used one or more Android devices for awhile. When they say the Android Marketplace has 20,000 apps, do all of those apps run across all variations of Android handsets??? Android-based devices seem to come in all shapes and sizes, screen resolutions, and now multiple versions of the OS with some devices not able to upgrade to the latest version. So how does the marketplace work???
The vast majority of the apps work across versions and screen sizes and resolutions. All the apps that I use work across versions. I think there was one app (ToggleSettings) which may have different versions. Not sure since I don't use it anymore. I'm running a custom 2.1 ROM on my G1. The same apps that I was using on a custom 1.6 ROM (with features of 2.0 added) continued to run on 2.1. I didn't have to re-download them. I had a backup from which I re-installed.
Every time a new version is released, I have to test the apps I have written and have had to make minor changes for each one. I'd say about a day's worth of effort cumulatively. But it's the same app that runs on various versions. I have kept my wife's G1 on a stock 1.6 ROM. And the other two phones are on different custom ROMs.
I use a full functioning non-jailbroken iPhone 3GS here in Vietnam,
and I have down loaded many Aoo's from the AppStore, but I am still not happy with the quality of stuff they put up there.
I like to customise my phone, so, I never update my phones OS to the latest, its always one version behind, so that I can always utilise Cydia. With Cydia lately I am able to TRULLY customise my iPhone to my hearts content!
Animated Lock Screen, Custom Icons n Arrangement/Rows, Custom sounds n Tones, Video Wallpapers, Video Ringtones and Random Ringtones
Its such a SHAME All of these are still UNAVAILABLE on AppStore.
The App Store has so much potential but content providers keep holding it down and they are only doing themselves harm.
There is no stopping anyone from customising their non-jailbroken iPhone.
AppStore 30% X 1 Billion = a bit over break even
Cydia + AppStore 30% X 1 Billion = Total Customer Expeerience n Satisfaction & hugely profitable!!!
That doesn't accurately describe what was then and now the biggest smartphone OS, Symbian. Come to think of it, that is pretty much the opposite of another popular mobile OS of that era, the PalmOS. Oh, and then there's WinMo, another dominant OS which is pretty much the opposite of what you describe.
Which pre-iPhone smartphone OS are you thinking about?
I'm thinking Blackberry OS around 3 years ago. Wasn't the Blackberry dev kit very expensive and limited in availability (much like game console dev kits)?
And I definitely remember hearing from other smartphone users over the years that major OS updates often required newer hardware. Or, at the very least, the older hardware couldn't take advantage of the newer OS features.
Aside from Bluetooth, the original iPhone supports pretty much every feature of the latest iPhone OS.
even if they wrote STAR wars unleashed or even CALL for duty direct to iphone os and not ported over ...
isn't the iphone screen too small for war games ??
I think the iphone screen is ok for size - Brothers in Arms was a decent war game. NOVA was pretty good too. The games just need to be more complex with more depth. They put a more advanced Force Unleashed on the DS. The iphone could easily handle the PSP version and the screen isn't much smaller.
Quote:
Originally Posted by brucep
and isn't time for apple to commision all the top game companies to create top line best selling games for the whole apple family OR out right buy EA or bungie.
Definitely, I think Apple need to put in more financial support of companies like Aspyr and EA. They could easily get a port commissioned of Half-Life 2, Portal, Counterstrike etc and they would be massive sellers. The 3GS would be the only one with the advanced effects but well worth buying.
Quote:
Originally Posted by brucep
and if i sold 3 billion of anything i would make a profit
Microsoft and their XBox would love to believe you. The majority of the 3 billion will be free downloads and the others, very low prices where Apple only get 30%. After expenses, it's quite reasonable that they only made a couple of hundred million dollars profit, which for a company like Apple is good but nothing to write home about.
The App- and iTunes store are part of the Apple experience.
It's like saying iLife isn't profitable. Of course it's not.
I think the App- and iTunes store (as well as iLife and OSX itself) are helping Apple to differentiate itself from its rivals, and help them sell a lot of hardware.
With billions in cash on the bank you gotta admit they're doing something right. And I think the app store is one of those things.
You are Right On. Everything Apple sells is somehow connected to the other items. In the end, Apple is making money. I'm a happy camper as I have lots of Apple Stock.
As @Marvin said. The number of free download is much more than the paid download. Even the top 21 of free download can easily become top 1 in paid download in term of number of dowload (in case it is switched to paid apps).
Imagine that my 0.99c apps download ratio is 100 (free/lite version ) / 1(full version). 30c for Apple costs it more than 2GB bandwidth of download (20MB per app). Is it benefit ?
Lucky for Apple, the ratio of paid / free is pretty high compare to Android Market. What if 20GB - 200GB of app download only generate 30cents?
Comments
They don't want the studios/record labels, and COMPETITORS to know just how much they are profiting off of APPS/ITUNES...
It's a trade secret for the time being... I'm sure there is a way around fudging the numbers in a shareholder meeting in order to maintain a trade secret and keep your competitors guessing.
I am a shareholder of Apple and I really don't care how much they lie to me if they keep their accounting secrets from their competitors.... As long as they keep having record breaking quarters and the stock keeps rising toward 300...
I wonder how other stores would survive and provide quality service especially if they don't have
any users and downloads (paid). I guess they would lose money in running it.
Remember that Apple also has the biggest collection of censors on its payroll.
I'd be just happy to see "Allow applications outside AppStore" switch in the future iPhoneOS...what difference one little checkbox can do ;-)
Lying to shareholders about your company's finances is very, very illegal. I doubt Apple is doing it.
They are sort of misleading people. They aren't lying, and they are careful to use language like: "above break even", as to be legal. They never say how much above, for example. Somewhere along the way there's was the rumor Apple makes no money from iTunes and the analysts have started to believe it, Apple merely leave them believe it. They aren't force to announce specific figures, so they don't. But in a round about way they are sort of misleading people, albeit in a legal manner.
the simple answer is that when you go into the supermarket to buy a quart of milk, occasionally you will stop off for a steak unless you are a vegan.
otherwise who wants to sell milk at break even, but the customers want it.
Bad example, there is big money in milk
It's coming...along with the slew of non-computer computers they are bringing to the market. The iPad will herald the future of where Apple wants to go with their platform. As computing power of smaller devices increases, Apple will continue to drive traditional computers into niche groups (for professionals). Within 5-10 years, home users will not be offered a Mac computer but will have a variety of Apple smart products to choose from (extending out the iPhone, iTouch and iPad ecosystem). One will not be able to buy content for these consumer products via any other means than via the Apple App Store. This expansion of the ecosystem to more substantial applications will drive a tremendous amount of revenue for Apple.
-Bloop
I support this vision.
- bandwidth
- storage
- the SDK
- API development
- approvals
- accounting/payments
I can't come up with enough expenses to see it as anything but hugely profitable.I'm not saying my list is all-inclusive, but what else comes to mind??
What are the expenses for running the App Store besides obvious items like:
- bandwidth
- storage
- the SDK
- API development
- approvals
- accounting/payments
I can't come up with enough expenses to see it as anything but hugely profitable.I'm not saying my list is all-inclusive, but what else comes to mind??
Dont forget the following things -
- Apple has to pay for Bandwidth, storage, etc., even on the Free Apps, where they make nothing
- Apple only gets paid for the first download of a paid app - zilch for upgrades.
- Credit Card companies would be eating up 2% of the payments. 2% seems small, but from Apple's perspective, 7% (2% of 30%) of the money they get goes to the Card processors. Not a tiny sum by any means.
- Bandwidth, Storage, Hardware, Employees are not exactly cheap.
- Apple has to pay more to ensure 100% reliability and good performance. If the downloads take too long, or if the store is down, it hurts their image way too much. See how much bad press Apple got when the approval process was slightly delayed. And remember, Apple has to pay for the Approval process for the Free Apps. Also, the bandwidth and hardware is determined by the peak load - when a new version of the OS is launched, etc. That is the reason we get such fabulous performance from the AppStore on most days.
- If the ratio of paid to total apps is 20% in the store, it would be like 5% when it comes to total downloads - most people pick free apps.
- Credit Card companies would be eating up 2% of the payments. 2% seems small, but from Apple's perspective, 7% (2% of 30%) of the money they get goes to the Card processors. Not a tiny sum by any means.
Apple is not paying 2% on their credit card companies, they will be paying under 1%
It's like saying iLife isn't profitable. Of course it's not.
I think the App- and iTunes store (as well as iLife and OSX itself) are helping Apple to differentiate itself from its rivals, and help them sell a lot of hardware.
With billions in cash on the bank you gotta admit they're doing something right. And I think the app store is one of those things.
@Skip
With all respect to the Cube, it is gone (for a while now). Why bring it up again?
Because I think to this day the Cube is one of the best aesthetically designed machines ever to grace this planet.
Beige box? Cube!
Nuff said.
it's ALL about the bottom line! No more, no less, well, with Apple there might be a few other things taken into effect, but even after that, it's still the bottom line.
If not, the cube would still be here. I and many others feel Apple never gave the Cube a chance.
Skip
be happy o sad faced duded
the cube is the mini !!!
I'm not surprised by this at all. App store apps are poor so people don't expect to pay a lot of money for them and this has created a culture of very low pricing as well as a trend for developers to create throw-away apps vs substantial apps (think MGS Touch vs MGS on the PSP or Star Wars the Force Unleashed). Many users gravitate towards free equivalents, especially for the apps that do very basic functions (most of them).
Some developers are making the effort like Gameloft and EA and now Rockstar porting their full GTA ChinaTown wars and pricing it at 1/3 the cost of the other consoles but the others need to wake up and stop treating the iphone like a mobile phone and more like a PDA and console. The first two are only half the speed of the PSP and the 3GS is faster.
The App Store has so much potential but content providers keep holding it down and they are only doing themselves harm. If I could rent every movie from itunes and have it stream down instantly, I'd be spending tons of money that I'm currently not spending. I'd pick up a reasonable subscription plan in no time. But the content providers don't allow it.
I'd be happy to spend £15 on the full Star Wars the Force Unleashed like the PSP version but I'm not buying the cut down one even at £3.50. Maybe over time it will develop into something better but I just wish there was a way to sift out the 90,000 or so junk apps that inevitably exist due to lazy developers trying to make a quick buck so that the real gems get seen.
I just can't find anything outside of Apple's top lists any more, which is pointless because they just keep pushing Doodle Jump down my throat. Is it the ball-in-a-cup fanclub playing this game or what?
If I can't find good content, I don't buy content, app store makes no profit. Simple.
even if they wrote STAR wars unleashed or even CALL for duty direct to iphone os and not ported over ...
isn't the iphone screen too small for war games ??
and isn't time for apple to commision all the top game companies to create top line best selling games for the whole apple family OR out right buy EA or bungie .
and if i sold 3 billion of anything i would make a profit .
really something is off with the whole app store
something fishy
peace
9
Got a question for people who have used one or more Android devices for awhile. When they say the Android Marketplace has 20,000 apps, do all of those apps run across all variations of Android handsets??? Android-based devices seem to come in all shapes and sizes, screen resolutions, and now multiple versions of the OS with some devices not able to upgrade to the latest version. So how does the marketplace work???
The vast majority of the apps work across versions and screen sizes and resolutions. All the apps that I use work across versions. I think there was one app (ToggleSettings) which may have different versions. Not sure since I don't use it anymore. I'm running a custom 2.1 ROM on my G1. The same apps that I was using on a custom 1.6 ROM (with features of 2.0 added) continued to run on 2.1. I didn't have to re-download them. I had a backup from which I re-installed.
Every time a new version is released, I have to test the apps I have written and have had to make minor changes for each one. I'd say about a day's worth of effort cumulatively. But it's the same app that runs on various versions. I have kept my wife's G1 on a stock 1.6 ROM. And the other two phones are on different custom ROMs.
and I have down loaded many Aoo's from the AppStore, but I am still not happy with the quality of stuff they put up there.
I like to customise my phone, so, I never update my phones OS to the latest, its always one version behind, so that I can always utilise Cydia. With Cydia lately I am able to TRULLY customise my iPhone to my hearts content!
Animated Lock Screen, Custom Icons n Arrangement/Rows, Custom sounds n Tones, Video Wallpapers, Video Ringtones and Random Ringtones
Its such a SHAME All of these are still UNAVAILABLE on AppStore.
The App Store has so much potential but content providers keep holding it down and they are only doing themselves harm.
There is no stopping anyone from customising their non-jailbroken iPhone.
AppStore 30% X 1 Billion = a bit over break even
Cydia + AppStore 30% X 1 Billion = Total Customer Expeerience n Satisfaction & hugely profitable!!!
That doesn't accurately describe what was then and now the biggest smartphone OS, Symbian. Come to think of it, that is pretty much the opposite of another popular mobile OS of that era, the PalmOS. Oh, and then there's WinMo, another dominant OS which is pretty much the opposite of what you describe.
Which pre-iPhone smartphone OS are you thinking about?
I'm thinking Blackberry OS around 3 years ago. Wasn't the Blackberry dev kit very expensive and limited in availability (much like game console dev kits)?
And I definitely remember hearing from other smartphone users over the years that major OS updates often required newer hardware. Or, at the very least, the older hardware couldn't take advantage of the newer OS features.
Aside from Bluetooth, the original iPhone supports pretty much every feature of the latest iPhone OS.
even if they wrote STAR wars unleashed or even CALL for duty direct to iphone os and not ported over ...
isn't the iphone screen too small for war games ??
I think the iphone screen is ok for size - Brothers in Arms was a decent war game. NOVA was pretty good too. The games just need to be more complex with more depth. They put a more advanced Force Unleashed on the DS. The iphone could easily handle the PSP version and the screen isn't much smaller.
and isn't time for apple to commision all the top game companies to create top line best selling games for the whole apple family OR out right buy EA or bungie.
Definitely, I think Apple need to put in more financial support of companies like Aspyr and EA. They could easily get a port commissioned of Half-Life 2, Portal, Counterstrike etc and they would be massive sellers. The 3GS would be the only one with the advanced effects but well worth buying.
and if i sold 3 billion of anything i would make a profit
Microsoft and their XBox would love to believe you. The majority of the 3 billion will be free downloads and the others, very low prices where Apple only get 30%. After expenses, it's quite reasonable that they only made a couple of hundred million dollars profit, which for a company like Apple is good but nothing to write home about.
The App- and iTunes store are part of the Apple experience.
It's like saying iLife isn't profitable. Of course it's not.
I think the App- and iTunes store (as well as iLife and OSX itself) are helping Apple to differentiate itself from its rivals, and help them sell a lot of hardware.
With billions in cash on the bank you gotta admit they're doing something right. And I think the app store is one of those things.
You are Right On. Everything Apple sells is somehow connected to the other items. In the end, Apple is making money. I'm a happy camper as I have lots of Apple Stock.
Imagine that my 0.99c apps download ratio is 100 (free/lite version ) / 1(full version). 30c for Apple costs it more than 2GB bandwidth of download (20MB per app). Is it benefit ?
Lucky for Apple, the ratio of paid / free is pretty high compare to Android Market. What if 20GB - 200GB of app download only generate 30cents?