Apps Generate About a Third of All iTunes Revenue

After Apple announced that the App Store has reached another milestone — 40 billion downloads — and that over 2 billion unique downloads were recorded in December alone, Horace Dediu of Asymco took a closer look at the iTunes economy and what the App Store and iTunes as a whole means in term of costs and revenue to the Cupertino company.

The numbers are mind-boggling: according to Dediu’s analysis, iTunes, which turned 12 this year, now generates $12 billion per year. In addition, over the past 60 months, media and app owners have received $24 billion as payment from Apple, while the company has spent about $10 billion to generate those sales.

An interesting highlight of the Asymco study is that iTunes — as a retail business — costs Apple about $3.5 billion each year to maintain, which includes merchandising, payment processing and “shipping & handling”.

Apple’s press release had already highlighted the growth of the app economy and the 40 billion downloads reinforce this trend, but Asymco has the figures: the 775,000 apps currently available in the App Store account for about $4 billion per year, or one third of iTunes revenue, and recorded a 50% growth, compared to 28% of the non-app media.