We reported earlier today that Apple makes more from its iTunes and accessories businesses than most companies do from the sales of their phones. Now the author of that report, Horace Dediu of Asymco, says that the amounts Apple reports for its iTunes revenues in 2012 don’t even include the $5 billion it paid out to developers as their share!
Horace Dediu of Asymco clarified that Apple’s “iTunes/Software/Services” counts wholesale revenues of iTunes Music sales, but “agency model” revenues of Apps and iBooks, meaning that Apple only counts its 30% cut of apps within iTunes revenue, not the more than $7 billion that it has paid out to app developers.
In a reply to a tweet from Daniel Eran Dilger @DanielEran, who asked: “Do all of Apple’s revenues from 3rd party iTunes Store media and Mac/iOS App Store sales count only from its 30% agency fee cut?” Dediu (@asymco) replied, “Yes, music is different (wholesale model). Books and apps are agency. This is why iTunes revs don’t scale as downloads.”
The growth in pass-through payments that Apple makes to developers highlights why developers are targeting iOS first, or even exclusively, while ignoring, or putting Android and other platforms on the back burner.
Apple announced paying out over $1 billion to app developers in June 2010. In the summer of 2011, that amount had more than doubled to $2.5 billion. Four months later, Apple announced paying out over $3 billion to devs. Then, just a few more months later, (the start of 2012), Apple said it had paid out $700,000 to devs in just one quarter, bringing the amount paid out to $4 billion since the program had begun. At the end of 2012, that amount had reached $7 billion.
While Apple’s payouts to developers have continued to grow, the developers themselves have continued to help make the iTunes App Store the largest and most frequently updated mobile software repository around.
