The App Store holds so much promise that AppleInsider reports
investment bank Piper Jaffray is telling investors to give the Apple software
announcement as much attention as they give Apple hardware announcements.
Analyst Gene Munster devised three possible case scenarios for the App
Store, with the $1.2 billion prediction being the best of the three. In total,
the three scenarios have the App Store adding 1% to 3% more operating income to
Apple by the end of 2009.
Munster came to his scenarios by making assumptions from the data Steve Jobs
offered on iPhone usage from the WWDC keynote speech on Monday. According to
Jobs, 98% of iPhone users use the web, 94% use email, 90% send text messages,
and 80% of users take advantage of 10 or more of the iPhone’s features.
Munster says, “Mobile service adoption rates show that iPhone owners are
more sophisticated mobile users, likely a result of both the user profile and
the device itself. The bottom line is that we expect similar adoption of the
App Store to other advanced services.”
scenarios are broken down into conservative, neutral and aggressive with
the neutral scenario assuming that 77.7 million App Store users will buy and
download at least two applications from the App Store each year at an average
revenue per application of $10 (with one download being free). This amount of
usage would generate sales of around $777 million with a profit of $163 million.
The most conservative of the cases would result in an additional $75 million
in profits for Apple on $416 million in sales from the App Store. Use of the
App Store could be much higher if apps are released that address the short
coming of the iPhone like the lack of voice dialing or other features that the
vast majority of iPhone users want.
3G and details of the App Store were announced at the WWDC keynote Monday.
quote: To arrive at his estimates, the analyst initially conceived a neutral case scenario in which he assumed 91% of a market comprised of 85 million multi-touch handheld users (61.6 million iPhone users and 23.4 iPod touch users) would at one time or another tap into the App Store during the course of a year.
quote: And I think Mr. Jobs' sales target for the iPhone is for worldwide sales, and not just adoption within the US.
quote: It's a simple matter to switch a GSM antenna for a CDMA one.