Apple iPhone apps a billion dollar business?

Stephen Withers
Thursday, 12 June 2008 03:26

Your IT - Mobility

An analyst is predicting that Apple's App Store for iPhone and iPod touch software could exceed $US1 billion in 2009. The projections are based on a user base that could reach 85 million.

Piper Jaffray analyst Gene Munster has modelled three scenarios with different numbers of device purchasers, active users, and applications purchased per user.

The 'conservative' assumptions with an addressable market of 55.5 million users, 75 percent of them active and spending an average of $US10, gives a market size of $US416 million.

The 'neutral' case pushes the user base to 85 million with 91 percent of them active, for a market of $US777 million.

The most optimistic ('aggressive') case has the same 85 million user base, but with 95 percent of them spending an average of $US15 at the App Store, resulting in a $US1,211 million.

You can argue the toss about any of these assumptions. Will there be between 55 and 62 million iPhone users in 2009? Possibly. As sales figures for the iPhone 3G start to come in after it goes on sale in multiple countries next month we'll get a better idea of how realistic that number is. But at least sales of the original iPhone provide some sort of guide.

But are those 'active' percentages realistic?