The App Store: Most Successful Mobile Application Store In History

Stories of overnight wealth have driven programmers to rush to sell their own applications through the Apple App Store. Gene Munster of Piper Jaffray had predicted that, should 91% of iPhone and iPod Touch users purchase only $10 worth of applications each year, the App Store would generate upwards to $1.2 billion in revenue in the year 2009. In the two months since the store’s launch, however, the App Store has sold $1 million in purchases daily. That would promise a potential in annual sales of $365 million. It’s not $1.2 billion, but it’s hardly a shabby number.

Richard Doherty, Director of Envisioneering Group is more hopeful than his colleague, and says that Munster’s figures are extremely conservative, since iPhones are selling must faster than was anticipated. He predicts, “It’s safe to say that some time this fall, the App Store is going to surpass revenues of all mobile application stores in history.”

MacDaily News, however, reminds us all that at the start there were millions of iPhones and iPod touches ready to be filled. So of course the sales would skyrocket, but would also inevitably settle down. It predicts that the massive sales of the earliest days may not be seen again. That’s not to say it isn’t still an extremely profitable venture for all involved. They simply mean to point out that the sales and prices will normalize, and at some point become more predictable.

Another point is made by Matt Murphy, who runs the iFund at venture firm Kleiner Perkins Caufield — the company which funds iPhone-related startups, most of them software-based.

Murphy says, “Long term, the money won’t be in the fees, but in advertising, subscriptions, and sales of virtual goods.” Apple currently takes a 30% cute of the fees, but does not take a revenue in those other areas. AdMob advertising network, for instance, currently places ads on about 25 iPhone applications. Jason Spero, their VP for Marketing says “Some publishers make $6,000 or $10,000 a day,” from advertising.

The predictions will fluctuate, as will the market. But, from all perspectives, the App Store is hot and expected to remain so. Owners of the iPhone and iPod touch are enthusiastic about the App Store. And, as long as that remains true, programmers will be enthusiastic about delivering new applications to them.