App Store Makes Only 1 Percent of Apple’s Profits
By Anna Johnson on July 8th, 2010It may get a lot of attention, but the App Store only contributes 1 percent of Apple’s profits.
Analysis by Piper Jaffray’s Gene Munster shows that the App Store has made just 1 percent of Apple’s overall profits since the App Store opened in June 2008.
Total App Store sales are $1.43 billion, with Apple getting $429 million of these (based on its 30 percent commission of sales). After deducting fees for credit card companies and storage and delivery, Apple’s gross profit is $189 million.
Given that Apple’s overall gross profit since the App Store launched is $33.7 billion, this means the profits from the App Store are a drop in the ocean for the company.
But here’s another – more meaningful – way of looking at the App Store. It’s a VERY profitable marketing mechanism. As a means of selling Apple’s hardware products – iPhones, iPod touches and iPads – the App Store is marketing that pays for itself in a MAJOR way.
