Apple seems to be making quite a little side business for itself out of iPhone App Store sales. Last November I laid out a plan for Apple to become larger than Google based mainly around a "tripod" of profit-generating businesses: the Mac and related software sales; the iPod and iTunes Music Store sales; and the iPhone and App Store sales.
Apple sold almost 2.5 million Macs last quarter, a new record for the company showing 43 percent revenue growth year over year. The company sold more than 11 million iPods as well, delivering 7 percent revenue growth YoY. Apple sold 717,000 iPhones too, versus just 270,000 in the first month of iPhone sales last year. Apple is certainly keeping busy.
Millions of Macs, iPods and iPhones, more than five billion songs sold, 50,000 movie rentals daily and now, according to Steve Jobs, the App Store "is going to crest at half a billion, soon." In under a month, the store shipped $30 million in paid software sales and -- if sales continue to grow at this pace -- will generate more than $360 million in revenue in 2009, according to The Register.
With a public goal of 10 million iPhones sold in calendar 2008, Apple seems poised to hit that number out of the park -- especially with the recent announcement of the $199 phone's upcoming availability at Best Buy locations across the United States -- plus availability of the phone in dozens of countries by the end of the year.
Looking for a company to watch? Apple is the Valley -- and Wall Street's -- golden boy. The success of the iPhone, plus whatever "mystery" products Steve Jobs promised were in the pipeline will overshadow any missteps on MobileMe or iPhone dropped calls -- and continue to fatten Apple's bottom line, and shareholder's wallets.
More news, commentary, and predictions from The Industry Standard:
- Prediction: Apple hits 18% share of US computer market by end of year
- Prediction: Apple's iTunes to displace Wal-Mart as largest music retailer in U.S.
- Prediction: Apple opens a store in Second Life
- Analysis: Independent gaming could flourish on the iPhone
- Analysis: Why podcasting is failing
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I absolutely agree with your forecast. When it comes to innovations
of any true market value the last five years; it's been driven largley by
one company- Apple. And that reception problem crap is just FUD
being spread by those who stand to lose at metoric success of the
iPhone. Notice how all the reports fail to name anyone or have any
true factual base. The best example is TheStreet.com's version where
the reporter visibily appears to be under duress- like someone forced
him to put out the piece and he made it worse by improvising and
putting some tidbits from the MobileMe launch issues.
I absolutely agree with your forecast. When it comes to innovations
of any true market value the last five years; it's been driven largley by
one company- Apple. And that reception problem crap is just FUD
being spread by those who stand to lose at metoric success of the
iPhone. Notice how all the reports fail to name anyone or have any
true factual base. The best example is TheStreet.com's version where
the reporter visibily appears to be under duress- like someone forced
him to put out the piece and he made it worse by improvising and
putting some tidbits from the MobileMe launch issues.
It's been said that the money made from the App Store barely covers it's operating cost. I'm rather puzzled about this since Steve Jobs seemed so excited about it. Maybe the more software sold, the bigger the margins. I really don't know for sure.
Apple hitting 18% U.S. market share by the end of the year is possible if the current market share is 14%.
Unfortunately, all this stuff has nothing to do with Apple's share price rising above $200. I hear so many theories on what Apple's true value is and I can't tell which way WS is going to go. Many people say it's undervalued, many say it's overvalued. I'm a long-term investor so I hope that if it's currently undervalued, WS will see that and push the stock higher instead of being stuck below $180.
I hope China buys millions of iPhones, but I'm not sure they can afford them even if they want them.
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