We’ve often remarked how important iTunes and the App Store is to Apple’s future. Begun as a way to sell digital songs, the iTunes ecosystem now touches every device from the Mac to the iPad. Turns out, the Cupertino, Calif. company pumps more than $1 billion into the service each year.
The full price is $1.3 billion per year, or $113 million each month, according to independent analyst Horace Dediu of market research firm Asymco. The figure comes from calculating the average price of songs and apps, plus the money Apple gets from each sale after paying developers. Taking those numbers from last week’s WWDC event, Dediu also figured in previous statements that Apple essentially breaks-even on iTunes.
As you would guess, the biggest expense for Apple is serving up those billions of songs and apps, along with payment fees and support. This only heightens the importance of Apple’s huge North Carolina data storage center. With the tech giant’s recent introduction of multiple iCloud features to the upcoming iOS 5 and Mac OS X Lion software, the data storage expenses will only grow. But before you cry for Apple, Dediu reassures Apple fans that the company is not likely to go into the red over iTunes.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
8 responses to “Apple’s iTunes EcoSystem Costs $1.3B Per Year”
they probably spend $115m per month, but they make $500m out of it too
The headline implies that this is known factual detail.
But the article implies that this is some unattached analyst making a guess. So which is it.
Duh. But when you have more then $55B in the bank and a crazy amount of cash rolling in each month, it puts the number into perspective.
Oh, and Ecosystem is one word, no need to capitalize.