Apple App Store Predicted to Make $1.2 Billion in 2009

Dennis Faas's picture

The arrival of the iPhone application store in July could signal big profits for the company in 2009.  Analyst Gene Munster predicts that once the store is available to customers, 91% of the currently 85 million multi-touch handheld users (61.6 million iPhone users and 23.4 iPod touch users) "would at one time or another tap into the App Store during the course of a year." $1.2 billion is the total if each of the 85 million customers spent $15 during 2009 at the apps store

The news from analyst Gene Munster is based upon his projected best case scenario for the company. (Source:

The announcement was made concurrently with that of the new iPhone 3G, which will be selling in 22 countries when it launches July 11. If $1 billion in profits is the best case scenario, then the more conservative estimate weighs in at $416 million. The lower number assumes that only only 75% of 56 million users would download $10 worth of applications.

The store will be a place for third-party developers to sell applications. Users can either access the service through their devices or through iTunes. Developers will get to keep 70% of the revenue, while Apple pocket's the remaining 30%. Some apps will be free, but it's not yet been made clear which ones. (Source:

The store opens the same day as the 3G launch and will allow downloads of applications smaller than 10 MB directly to iPhones and iPods, while larger apps will have to be done via PC.

As a result of this news, investment expert Piper Jaffray is reminding investors not to neglect Apple's software business. Munster's projections could signal a large upturn in the market for the company's software shares and a focus on hardware might be a stable, but not necessarily savvy investment.

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