Will the App Store be a cash cow for Apple? [Update]

I can only hope that after the 3G iPhone becomes available in Switzerland; it comes loaded with the most modern of nuclear weapons plans as well.

“The point is, get people into your store and make them Apple fans. The reward is in the increased hardware market share, not the software sales.”

Bingo! Give the man a cookie, he speaketh the truth with clarity.

What about all the missing features?

See http://notionscapital.wordpress.com/2008/06/11/iphone-3g-lacks-features/

Two apps MINIMUM on average per iPhone user. Why?:

MMS and video recording, those will be standard additions for 70% of the user base.

Beyond that, for everyone complaining about software “misses” based on what we saw on Monday, there will be solutions there for those, as well. And that doesn’t even get into the entertainment-related apps.

What is the difference between the two analyst. Toni is consistently wrong on his assumptions – look back at his track record. Does Toni still stand by his assumption of 8 million iphones in 2008 -Most analysts are at 21-25 million – get back to me in January Toni

There is something that I am surprised that no one has mentioned. What if someone comes out with a “killer app” that is a “must have” for EVERYONE? An app that is essential, and practically 99% of all users download it? Maybe this app will cost $10 each.

As for App store profitability … if Apple investigates the code of every app, it cost money to pay Apple employees to sit there and go over the code. That is likely where the “30%” goes … until the App sells enough copies to overcome that initial cost.

The problem with this article is that it only speaks of revenue and not the expenses that Apple will incur with the App Store. Data center space, servers, network gear, App Store development, salary for dev, test and ops, and the possible use of a CDN (Content Distribution Network) will not be cheap.

REVENUE DOES NOT EQUAL PROFIT!

Talk about a reality distortion field. Even the most die hard itard would think 78 million worldwide by 2009 is total lunacy.

ex ped: That puzzled me too, since Munster’s model accounts for 61.6 million iPhones at that point. Will follow up and update.

One presumes that all these apps will, with little effort, be portable to the full-sized Macs. They definitely will run on the iPod Touch.

(Hmm. Can one use a Touch or iPhone to “control” a game on a big-screen Mac? Sounds like a natural progression to me.)

The point is, get people into your store and make them Apple fans. The reward is in the increased hardware market share, not the software sales.

Sacconaghi is a very simple minded person if he is drawing an analogy between people buying songs from iTunes and people buying applications from the App Store. The biggest reason that the analogy does not close is that there are many other sources for iPod content, chief amongst them the libraries of CD’s that iPod owners had to begin with, not to mention an uncounted number of pre-iTunes MP3’s illegally downloaded from Napster, et al. Contrast this with the iPhone situation. This is not just a case of digitally repackaging OLD content (the songs) vis-a-vis AAC and FairPlay. This is a case of distributing NEW content (the applications) using the ONLY supported channel. The iPhone is a brand new application platform, and there will be nowhere else (other than via unsupported methods, e.g. jail breaking) that you can get applications. This is a captive audience, and therefore the vast majority of purchased iPhone applications will come through the App Store.

Get your head in the game, Toni.

Thompson

The purpose of the App Store is first and foremost to ensure the security of the iPhone, and secondly to get apps out to the users in as efficient a manner as possible. That means that apps will not only be listed there, but (I assume) will be put through some testing, and perhaps even code review. Although some of the security aspects may be alleviated by the fact that Apple will know which developers responsible for each app.

Still, this will incur a certain expense. I think that Jobs is right in saying that Apple will not garner any significant profit from the store, and that the store is a fantastic deal for most of the providers. This is especially true for the small shops. Imagine, you can create a small app and get it out there with virtually no sales or marketing costs.

Apple’s objective is clear: get as many secure apps by as many developers out onto the iPhone as possible. THAT is what is best for Apple.

It also happens to be best for the Developer.

It also happens to be best for the customers.

The only ones it is NOT good for – the competition!

games, games, games. Super Monkey Ball, Spore(major one) and the countless racing games – lookup iPhone & Pong; great video of a multiplayer wifi pong game some kid wrote in 2 hours. App Store plus wireless iTunes downloads = easy $

yes if the iphone and ipod touch become as popular gaming decice as the portable playstation or nintendo, now your talking maybe .5 to 1 billion in 2009.

The answer depends on so many variables, such as,

iPhone sales

How good the apps are,

The iPhones adoption as a gaming device
But even if app revenue doesn’t become significant, it adds to the positive user experience of an Apple product owner. This modifies the purchasing behavior in the future for Apple products.

Apple has an eco system that is untouchable by Microsoft, with the iMac, OS X, iPod, iPhone, iTunes and soon to be App Store and Mobile Me.
Think about the Microsoft user experience by contrast.

Perhaps MS could came up with a mobile service called “infect me” for $99 a year…and it would infect all your Windows powered hardware with the latest viruses and spyware.

One stop shopping…for PC users.