The $45m headline number is a drop in the bucket compared to what Apple makes from selling iPhone and iPod Touch hardware. The crucial point this story misses is that Apple has generated a marketplace worth $50m-$112m in revenue for makers of iPhone apps, with an App Store that launched less than a year ago. This is huge.<p>Compare that to the $100m "iPhone Fund" that Kleiner Perkins announced in March 2008 (<a href="http://www.techcrunch.com/2008/03/06/kleiner-perkins-anounces-100-millioin-ifund-for-iphone-applications/" rel="nofollow">http://www.techcrunch.com/2008/03/06/kleiner-perkins-anounce...</a>). This seemed like a lot at the time, eclipsing the $10m "fbFund" for Facebook Apps from Accel, which itself seemed big at the time (<a href="http://www.techcrunch.com/2007/09/17/facebook-launches-fbfund-with-accel-and-founders-fund-to-invest-in-new-facebook-apps/" rel="nofollow">http://www.techcrunch.com/2007/09/17/facebook-launches-fbfun...</a>).<p>While $100m and $50-112m seem like comparable numbers, the difference between investment and revenues is huge. Think about it, would you rather have $100m in VC money or $100m in revenues (per year!) from customers?<p>The biggest benefit to Apple is not the revenues they get from Apps. The biggest benefit is from the thriving community of iPhone app makers who are probably willing to spend on the order of $50-$112m of effort (per year!) improving Apple's platform. A platform worth $2+ billion/yr for Apple.
I don't think that Apple really needs the App Store to be a money maker. In fact, if it breaks even, it would be a win since the applications themselves are adding value to the iPhone and iPod touch in the same way that third party applications for Microsoft's operating systems have created so much value for Microsoft.<p>The apps are quickly establishing the iPhone/iPod touch as _<i>the</i>_ platform in handheld computing making it very difficult for third parties to compete against Apple. With the Palm Pre coming out soon, a lot of people are going to be looking at it like people looked at Macs a few years back - sure, I could get a Pre and you can even argue that it's a better device, but everything runs on an iPhone and I have no idea whether people will port things to the Pre.<p>Apples knows - or at least should know - that the App Store is what will give them the Microsoft advantage in the mobile space. As everything is iPhone/iPod touch compatible, sales will keep going up which will drive even more app creation which will drive even more sales. What a wonderful cycle, unless you are on the outside trying to compete.
How could that sort of miniscule revenue finance some servers, bandwidth, and a payment system? You'd almost think Apple were trying to make more money from selling the phones and contracts :) </lowest form of wit>
If apple gets 30% and makes a max of $45 mil; then all the users together got no more than $45 / 30% * 70% = $105 million.<p>If this is the case, this seems like a very small market for everyone to be fighting after.