The next time you are grumbling about the price of downloading a song on iTunes, maybe you’ll sing a different tune... An analyst at Asymco has estimated that the Apple iTunes Store costs approximately $1.3 billion annually to operate. (We did the math; that would mean $113 million monthly, which blew our minds!)
Asymco sells software development and consulting services to companies, like Apple, that are interested in deploying mobile applications. Horace Dediu, a self-employed analyst and blogger for Asymco, based his estimate on a handful of published statistics about the iTunes Store, along with some basic algebra. Apple announced at WWDC last week that there have been “15 billion songs downloaded on iTunes, 130 million books downloaded, and 14 billion apps downloaded along with $2.5 billion paid out to developers”.
Apple has publicly stated several times that the iTunes Store does not generate income, and that any revenue made is instead re-invested back into the store, paying off app developers, record labels, and other content owners. "Apple says they use whatever money pours into the iTunes Store on increasing capacity, traffic, capital expenses, [and] personnel," Dediu said. "Who knows. But I think it's safe to say it's re-invested."
We don’t know about you, but the next time we’re rocking out to the latest Black Eyed Peas jam with all our BuyiJet iPod Accessories and gadgets, we will be thanking our lucky stars it didn’t cost $1.3 billion to download it.