How many businesses pull in $12 billion a year after a decade?
Analyst Horace Dediu of Asymco has crunched the numbers on the iTunes Store?which now includes the original music service as well as the App Store and iBookstore. He concludes that it's a $12-billion-a-year business for Apple and the app developers, music labels, and TV and movie studios who sell through it.
Consider this: In its 2004 fiscal year, Apple pulled in a total of $8 billion in revenues.
Apple has always downplayed the iTunes Store, saying that it runs a bit above breakeven. In its formal accounting, Apple only includes the 30 percent cut it takes of sales, not the full price consumers pay, as revenues, and buries iTunes revenues in under a category of "other music-related products and services," along with iPod cables and speakers.
And it's hard to separate the success of the iTunes Store from the iPod and iPhone businesses. An easy, legal way to download music is a crucial part of the experience of owning an Apple gadget, and a library of iTunes content makes sticking with Apple the path of least resistance.
Intriguingly, Dediu concludes that music and other media sales are a far larger portion of iTunes sales than apps even today.
Apple cofounder Steve Jobs once bragged in an interview with Time that the company had invested "tens of millions of dollars" in building the iTunes Store. It seems like a wise investment.
It's also been a good career move for Eddy Cue, the executive who launched the iTunes Store. When other Apple executives stumbled in launching online services, he's taken over their portfolios?most recently Apple Maps and Siri from the departed Scott Forstall.
See Dediu's full report on Asymco >
Source: http://www.businessinsider.com/itunes-sales-2013-1
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