The prevalance of the iPhone is somewhat astounding. Stephen Colbert frequently shows his off on The Colbert Report, as does Jimmy Fallon on Late Night. Apple even had their one billionth application for the iPhone downloaded within nine months of the App Store’s launch. So it may come as a bit of a surprise to learn that Apple has made somewhere from $20 million to $45 million from the sale of applications. While the actual sales of software may not be as monetarily valuable as people might have thought it to be, one has to take into account the value of controlling the largest development platform for mobile devices.
There is no question that there is more software released for the iPhone than for any other mobile device out there, which puts Apple on a pretty high throne. One has to take into account that the iPhone is not and probably will never be an open platform. Developers have to wait for Apple to give their software the go-ahead before anyone can buy it. Despite the horror stories involved in getting software into the hands of the public, no slowdown has occurred in development. Indeed, Apples sold 500 million applications in the first six months, which means that, as one billion applications were sold in nine months, the rate of sales has increased rather drastically.
Assuming this rate continues to grow, we can say that Apple is sitting on a bit of an economic holy grail: other people do the work, and then Apple gets a cut of sales. Of course, Apple has to continue releasing updates for the platform, evaluating applications before selling it, and building the eventual next iPhone, but that does not change the fact that as more and more people become accustomed to buying applications, Apple stands to make more of a profit s without doing all that much more work (the cost of development is far greater than the cost of evaluation). And at the end of the day, $40 million for doing nothing is a pretty sweet deal.
