Apple app prices rebound

Summary:App prices on Apple's App Store are rebounding 14 per cent in 2011 compared to an 18 per cent decline in 2010 and the company's average selling price is US$1.44. Of that sum, Apple gets an average of 26 cents per download, according to Piper Jaffray.

App prices on Apple's App Store are rebounding 14 per cent in 2011 compared to an 18 per cent decline in 2010 and the company's average selling price is US$1.44. Of that sum, Apple gets an average of 26 cents per download, according to Piper Jaffray.

In a research note, Piper Jaffray analyst Gene Munster took a look at the economics of Apple's App Store. The revenue doesn't amount to much — at least in terms of Apple's overall sales — but the App Store is a competitive strength that drives device sales. Munster's analysis didn't guess at how the App Store factors into a device buying decision, but those figures would boost the value considerably.

Munster's report connects the dots between Apple's statement last week that users have downloaded more than 15 billion apps. Munster then looked at Apple's statistics in June at the WWDC powwow to cook up some figures.

Among the key data points in Apple's App Store economy:

  • Munster estimates the average iOS user will download 83 apps in 2011, up from 51 in 2010. That's a 61 per cent gain year over year.
  • Roughly 82 per cent of apps on the App Store are free. The other 18 per cent represent paid apps with an average selling price (ASP) of US$1.44. That price is below the US$1.61 average of Apple's top 50 paid iPhone apps.
  • Munster said that ASPs on the App Store are likely to rise as iPad apps become a larger part of the mix. The ASP of the top 30 paid iPad apps is US$6.32, up 36 per cent from US$4.66 a year ago.
  • iOS users are downloading 32.3 million apps a day, triple the 11.9 million a day rate for iTunes music tracks.

Add it up and the App Store will be about 1 per cent of Apple's gross profit, or US$538 million, in calendar 2011 and be about 24 per cent of iTunes revenue.

Via ZDNet US

Topics: Apple, Apps, Mobility

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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