How much do Apple users spend on iTunes?

Apple's 'break-even' business appears to be growing by the day. So how much money is the tech giant claiming off its iTunes fans?

In the latest quarter the iTunes top line grew by 32 per cent. Additional newly reported items:

  • Quarterly revenues topped $US4 billion (a new high) and the company suggests that this rate is maintainable by stating it has a “$16 billion annual run rate”. The pattern of revenues is shown below.

  • The content portion of iTunes revenues was $US2.4 billion, up from $US2.1 billion sequentially. Growth into Q1 is not unusual as many holiday iTunes gift cards are redeemed during January
  • Revenue growth has been surprisingly steady, averaging 29 per cent  per quarter for more than six years.

  • Music is now available in 119 countries.
  • The Music catalog now consists of 35 million songs.
  • Movies are available in 109 countries. 60,000 titles are offered.
  • iBookstores are present in 155 countries offering 1.75 million iBooks.
  • There are iTunes App Stores in 155 countries whose residents make up about 90 per cent of the world’s population.
  • iOS developers have created more than 850,000 iOS apps, including 350,000 made for the iPad.
  • Cumulative app downloads have surpassed 45 billion and are on track to reach 50 billion at time of writing (estimated to be reached mid May).

  • The company reports that over 800 apps are downloaded per second. Including all media, the download rate is now above 1000 items per second. Estimated download rates by media types are shown below (note: first graph is plotted on a log scale):

  • App developers have been paid over $US9 billion for their sales through the App Store including $US4.5 billion in the most recent four quarters. I estimate the split between media types as follows:

  • Canalys estimates that sales from iTunes App Store accounted for 74 per cent of all app sales worldwide in the March quarter.
  • iOS app revenues more than doubled year-over-year.

Including all (gross) content revenues, the sales rate is now nearly $US5 billion per quarter ($US4.94 billion). Including services, the iTunes consolidated business cleared over $US5.5 billion.

In March Apple reported that they have 500 million iTunes so one way to think about the iTunes business is to say that  iTunes users purchase content and services at the rate of about $US40 per year.

Bless them.

Horace Dediu is founder and managing director of Asymco, a Helsinki-based app developer/industry analysis advisory firm. You can find his blog here.

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