24 thoughts on “The iPhone App Market Size Debate: Is It $2.4B a Year or $250M? AdMob Responds”

  1. An optimistic estimate of the current run rate is 150M downloads/month x 25% of downloads are paid x $2 average selling price x 12 months = $900M/year. A more realistic estimate is 150M downloads month x 10% of downloads are paid x $2 average selling price x 12 months = $360M. This would give developers a $252M/year stake, with the remaining $108M/year going to Apple.

    1. I’ve discussed this topic with a few top iPhone app developers and have heard representatives of the iFund speak about the topic. Ian, your realistic estimate is closer to the truth. the ratio of paid to free downloads is at best 1:10. The $2 seems about right as about half of the top 50 apps (at a glance) are $0.99 and the other half varies between $1.99 and $6.99).

  2. Blackberry has more paid apps with slightly higher prices. They could be actually making more money on the apps than apple.

  3. 90% of all the Tech articles on the internet are written to benefit Microsoft. When something like the Admob article is released, the Microsoft propaganda machine immediately goes to work to discredit it all over the internet. In the above example, a link to “Cult of Mac” quotes discrediting sources who are known Microsoft “PR” operations, the Yankee group.
    There is no “real” tech news on the internet, nearly all of it is Microsoft propaganda.

    1. Our estimate of the total 2009 App Store ecosystem revenues is between $700 million and $1 billion: http://blog.endeavourpartners.net/2009/09/11/apples-app-store-and-the-over-the-top-phenonema/

      Lower forecasts we’ve seen are due to underestimating growth in the second half of 2009 (using one month or a few weeks data rather than a full year forecast); Higher forecasts are primarily due to a bias in most data sources toward active users rather than all users. The hardest number to get a handle on is the average price for a paid download.

  4. My Apple story:
    I have bought the iPhone 3G when it was published in June of 2008. I was strictly against buying apps from appstore. Later, I saw the potential of iPhone and I started to buy some really good apps. So far as good, but now, i wanted a mac! I have bought an iMac, and now i buy more and more in the iTunes store, because there are so great features for Mac and iPhone (Things, etc.). And I am just happy to use the entire Apple stuff… Have a nice one….

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