• Lightspeed Venture Partners, Thursday, May 14, 2009 12 PM

Apple reported an amazing one billion application downloads in the first nine months of the existence of the App Store. That may be an eye-catching number, but how much money is Apple actually making from the store? Not as much as you might think: Lightspeed Venture Partners' Jeremy Liew reckons that Apple probably made around $20-45 million from the first billion apps downloaded.

Here's how he reached that number: based on conversations with industry watchers, Liew estimates the ratio of free to paid apps in the 1:15 to 1:40 range, suggesting that between 25 and 60 million apps have been sold out of a total of one billion. Then he took a recent iPhone apps survey by O 'Reilly that said the mean price for paid apps is $2.65. Multiply this by 25-50 million paid apps, and you get cumulative revenue of between $70 and $160 million. Apple gets a 30% cut of all download sales, leaving it with between $20-45 million from the first billion apps downloaded.

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