According to The iPod Observer Apple has sold over 25 million applications from the App Store for the iphone in its first 10 days. Additionally according to RWW the average sale price for the applications was over $5 but dropping slowly. This is what lead to my estimate of $125 Million in sales.
Now Apple obviously doesn’t get all of that but they are rumoured to be receiving 30% of revenue of all sales so that means they are raking in about $35 million. That is really good money considering once the infrastructure was in place their costs are very low.
Now take that $35 million x 3 = $105 for the first month in sales (directly to Apple). Now understandably sales will fall off a cliff sometime in the first month since early adopters are the ones buying and they are reasonably expected to pay for apps and possibly more of the expensive ones as well. So let us decline sales over the next 2 months by 30% each.
105 x 30% = about $60 million
$60 x 30% = $40 million
What does this mean? It means for the following court Apple has just boosted its revenue by $200 million. Since the majority of the costs associated with the development of the store have already been included in the current quarter Apple is likely to get nearly the full $200 million booked as profit in their next quarter. Not bad Apple.
The current quarter was $800+ million so next quarter should see that $200 push profit up relative to the previous quarter by 20-25%.
*Profit next quarter should be way higher though because that is the back to school quarter and with Apple’s growing market share this quarter should be a blockbuster and probably the biggest quarter in a decade (or more).
**No I don’t own Apple stock but trust me if I could have I would have bought last year as I believed the iPhone was going to be huge and it has and will continue to fill Apple’s coffers for a few years at least.
My concern longer-term is will the iPhone lead to enough growth in revenue and profit to fill the huge whole the iPod will leave behind in two years when there is no reason to buy an MP3 player unless you are under the age of 10.
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