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Analyst: Apple Could See $1 Billion in App Store Revenues

Thursday, June 12th, 2008 at 4:50 PM - by

Apple Inc. could see US$1 Billion per year in iPhone App Store revenues in calendar 2009, according to Piper Jaffray analyst Gene Munster. Often one of the most Bullish analyst when it comes to Apple, Mr. Munster called the $1 Billion figure aggressive in a research note to clients.

Mr. Munster based his projections on his estimate of a user base of 78 million iPhone, iPhone 3G, and iPod touch users by the end of calendar 2009 (Apple's fiscal year ends in September). He estimated that some 91% of those users will be App Store customers, and they will average $10 per year in App Store purchases, even thought he also thinks most apps available will be free.

"We estimate average total revenue per user of $10 by calendar year 2009," he wrote. "in other words, on average, App Store users will buy two apps (one free and one for $10, or any permutation thereof). Although this is our neutral case, we believe our assumption of $10 per user by the end of calendar year 2009 is actually quite conservative."

Mr. Munster's estimate of 91% of iPhone and iPod touch users being active App Store customers is based in part on Apple's claim that 98% of iPhone users browse the Web, and that 94% use e-mail on the devices.

Mr. Munster is among the first analysts to look at the potential of the App Store as a major source of revenue for Apple (a subject examined by this reporter in a column). Most analysts have instead focused on the price drop and change in business model represented by the iPhone 3G.


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