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iPhone App Downloads Boom, App (iTunes) Revenues Do Not
Apple’s challenge to directly monetize mobile apps feels very similar to the struggles of mobile operators aiming to cash in on exploding mobile data usage. Lesson learned: the mobile boom doesn't necessarily raise all boats equally.
Kevin Fitchard
January 26, 2011
1 Min Read
Apple recently announced that it has achieved 10 billion downloads in its iTunes App store, an impressive feat no matter how you look at it—unless you’re looking at it from a revenue standpoint.
Now no one would accuse Apple of getting off to anything other than a spectacular start in the mobile business -- including jump-starting the mobile apps explosion.
Yet last year, even as mobile app downloads increased 233$, revenues from iTunes jumped just 23%. Now certainly the bulk of iTunes business is in moving low margin songs. But it's also clear that although: iPhone customers are downloading a lot of apps, but they’re not paying for them.
Over at Connected Planet, we take a deeper look at this conundrum, and especially its similarity to the challenges of mobile operators to grow overall revenue even as mobile data usage explodes:
For operators, overall data usage is booming, but revenues aren’t necessarily keeping up. Data revenues are most certainly increasing quickly, but not at the lightning-fast pace of overall data consumption.
The difference, of course, is that Apple is in the hardware business. It certainly doesn’t want to take a loss on content or data consumption. But as a break-even venture, especially if the App Store continues to fuel i-device sales, Apple is feeling just swell.
Read the rest of the story at Connected Planet: Just like operators, Apple learning mobile data boom doesn’t equate to booming revenues
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