Apple just blew everybody out of the water. It is astonishing, really. Revenue of $46.33 billion? Yeah, Greece called. It is looking for a bailout. Anyway, there is one number that is making mobile developers across the world salivate: $700 million.
That is the amount that Apple paid out to iOS developers in the last quarter. Apple has paid out $4 billion cumulatively to iOS developers through the App Store. If we extrapolate those numbers considering Apple’s 30% take of App Store purchases, the company did $1 billion in gross sales through the App Store in the quarter. Mobile developers: this is the carrot you are chasing.
We have written several times that it is unlikely that developers will ditch iOS in favor of writing for other platforms, such as Android or Windows Phone. There is too much money to be made in iOS for developers to choose and Android-first strategy, unless they are looking at some market inefficiencies that could be better served by developing for something other than iOS. We have seen some developers focus on RIM for that specific reason.
There are 550,000 apps in the App Store according to Apple’s CFO Peter Oppenheimer and that includes 170,000 for the iPad (a number that could be misleading as many iPad apps are made with the “+” designation that means they function on both the iPad and iPhone). If we figure that the Android Market is generating even 50% of what the App Store does, that makes mobile applications about a $1.5 billion quarterly market or $6 billion a year. That is probably a high estimate considering that Apple’s last quarter happened to coincide with the holiday shopping season (Oppenheimer did note a lot of activity on iTunes and the App Store on Dec. 25).
Note, we are talking gross revenue here, not just application sales. That would include in-app purchases as well. What this does not include is money made through advertising within mobile apps, which makes the number quite a bit higher. Google does not take a cut for itself with 70% going to developers and 30% split among various parties like payment processors.
For 2012, perhaps $6 billion is not low at all between Andriod and iOS app revenue. Smartphones such as the iPhone 4S and new Android devices continue to make their way into more and more hands. Apple has sold 315 million iOS devices in its history and Android still technically outsells Apple devices. There were 37 million iOS devices sold in the last quarter and about 15 million iPads. Estimates place Android sales for the quarter within the 60-65 million range.
The fact of the matter is that there will be money to be made by some smart entrepreneurs looking to make some great apps in the near future. Developers, it is time to cast your net. Working across both iOS and Android, there is a decent living to be made writing mobile applications.