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.
Read the whole story at Lightspeed Venture Partners »