Apple’s renowned iTunes programme has taken the world by storm over the past half decade, but it is during the last 18 months and with the ever-growing success of its application store, that new life has been breathed into the award-winning software.
Known as the ‘App store’, Apple has taken the industry’s number one music application and bulked it up with a simple addition, reaping over two billion downloads in less than two years.
Up until last year, games and applications for mobile phones and similar devices had been a realm exclusive to phone networks and specialized companies such as Jamster. Companies, who hold the customer to ransom by charging high costs for apps, usually followed with a subscription fee. The ‘App store’ has blown this market out of the water by placing it in the hands of the consumers and third party developers to make their own applications.
The result being, as of last month, estimated at over 100,000 downloadable applications. Many applications are free to download, whereas some are priced at the basic rate of 59 pence, comparatively cheaper to the price a similar product would have cost two-years prior.
It is in this developer bond where the ‘App store’ has really exploited a niche. By allowing third party developers to create the content, and giving them a 70-30 per cent split of revenue (Apple receiving the latter) it has laid a foundation for the most basic developer to become wealthy overnight.
Through the release of iPhone SDK (software development kit) alongside the summer 3.0 operating system update, Apple has allowed developers to easily create applications using Xcode. In order to do this though, developers require a minimum subscription fee in the region of $99 (£59). It is here where Apple has generated sizeable revenue.
The current success of the ‘App store’, has recreated both the iPhone and iPod Touch as mobile gaming devices. This has become a huge selling point for established video game developers. Travis Boatman, vice president of Worldwide Studios, EA Mobile said, “The App Store has forever changed the mobile gaming industry and continues to improve. With a global reach of over 50 million iPhone and iPod touch users, the App Store has allowed us to develop high quality EA games.”
Despite the iPhone’s release in China seemingly a non-event, with China Unicom, the exclusive tariff for the region, only shifting roughly 5,000 units, it is thought that iTunes has reaped over $1 million in application sales alone. It must be said though that most of this revenue has come from the estimated two million ‘illegal’ iPhones in China. However, Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co., believes that Apple can sell in the region of three million units in China by the end of 2011, saying, “It will be the fastest-growing overseas market.”
With the iPhone now openly available in Asia, and with the growing popularity and accessibility of the ‘App store’, it could well be another billion-dollar asset for Apple Inc.