Apps poised to eclipse iTunes as developers become new rock stars

Jan 18, 2011
Finance

Only a few years ago, the game industry surpassed Hollywood in revenues. Another big change is on the horizon. App developers and their products could emerge as the rock stars of  gaming, eclipsing traditional video gaming. Philip Elmer-DeWitt said in Fortune: “Sometime in the next week or so, the zeros on the App Store countdown […]

Only a few years ago, the game industry surpassed Hollywood in revenues.

Another big change is on the horizon. App developers and their products could emerge as the rock stars of  gaming, eclipsing traditional video gaming.

Philip Elmer-DeWitt said in Fortune: “Sometime in the next week or so, the zeros on the App Store countdown odometer will roll over and Apple (AAPL) will announce that 10 billion apps have been downloaded since the store opened two and a half years ago.”

Those are McDonald’s kind of numbers.

Asymco analyst Horace Dediu has developed new numbers that show an “amazing acceleration in download rates.”

He estimated that the average price per app is 29 cents with a margin of 30 percent. At this point, 30 million apps are being downloaded each day.

He said the App Store is ramping faster than iTunes music downloads: Apple paid $2 billion in 31 months to app developers compared with 34 months for the first $2 billion paid out for iTunes music. All told, record labels have received $12 billion from iTunes.

Elmer-DeWitt noted that the number of apps downloaded per iOS device has increased from 10 per iPhone and iPod touch in fall to 2008 to more than 60 now.

Citing an earlier Dedlu post, Sam Oliver at AppleInsider notes Apple’s digital download destination for the iPhone and iPad is on pace in March to eclipse the iTunes Music Store downloads since 2003.

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“Apple’s music store reached the 10 billion total in February 2010, or 67 months after it launched,” Oliver noted. “But the App Store will reach 10 billion in just 31 months since it launched in July 2008. The popularity of the App Store has grown exponentially, as just a year ago Apple revealed that App Store downloads had topped 3 billion.

Apps are changing the world.

Remember the old journalism and bank-robbing motto: Follow the money. Dedlu is forecasting that new talent will be drawn to app development: “My guess is that a follow-the-money analysis would show that apps as a medium will absorb talent and capital away from existing mediums and the industries they support.”

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