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  • iTunes Now Generates an Estimated $2 Billion Annually


    As iTunes prepares to turn ten years old in April, Apple has about 2 billion reasons to appreciate the iTunes store. According to data presented Friday by analyst Horace Dediu with Asymco, the digital content storefront is now generating some $2 billion dollars per year.

    My estimate is that Apple’s own software generated $3.6 billion in Revenues in 2012. As you can imagine, this is a high margin business which grows at nearly 20%/yr. Although I estimate that the software business has been overtaken by the Apps and Music businesses in gross revenues, it keeps an operating margin similar to that of Microsoft or about 50%.
    If you do the math at home, this means that iTunes "inclusive of Apple’s own Software" generates as much as 15% operating margin on gross revenues. Drum-roll please.... that’s more than $2 billion a year, Dediu writes.

    "From its inception Apple has stated that it aims to run the store 'at break-even," the analyst says. "The business has grown so rapidly however that its profit-free nature has come under severe pressure."

    To review Dediu's new report in full, click here.

    Source: Asymco
    This article was originally published in forum thread: iTunes Now Generates an Estimated $2 Billion Annually started by Michael Essany View original post