| The analysis in the article is breathtakingly wrong. The data used is wrong. The math used is wrong. The conclusions are wrong. First, the article assumes each developer creates one app (160,000 * 8700 = $1.392B revenues, $1.392 * 30% = $418mil "profit"). This error leads to further errors down the line. Second, Apple App Store sales is estimated to hit apx $4.9B 2012 [1]. This means apx $1,470mil in gross income (what the article calls "profit"). The article uses only $1.39B revenues and $418mil in gross income in its calculations as outlined in point one. Third, this analysis assumes every developer would not purchase an iPhone if they were not developing software. Given that the vast majority of iOS developers do it part time, I think this assumption is highly unlikely. Fourth, including profit from phones as a % of appstore profits is just wrong. Phone profits are not included as part of appstore profits. Thus it cannot be used as a % of it. It is additional income, on top of the appstore. Finally, just to give you an idea of how little profits from developer matter... In the last 4 reported quarters, Apple earned a pre-tax net income of $49,000mil. Or $134mil per day. This versus the article's $64mil over the entire year from developers. Somehow I don't think they spend a lot of time or effort trying to get money out of developers. [1] http://www.mediabistro.com/appnewser/apples-app-store-revenu... |
The analysis in the (simple) article, thereby, is actually quite funny, and is part of an overall correct narrative; although, I agree that it was not described in quite the right context, and lends itself to your math complaints, which are technically quite correct.
From this standpoint, using the average developer income does not destroy the analysis (and is in fact required of it): if I were using a similar analysis in a talk, I'd want to speak to the people in the room, to give them a feel for what Apple will make from that sample.
Secondly, it is not problematic to ignore that the developer might have otherwise purchased an iPhone: the purpose of this kind of analysis isn't to demonstrate that Apple is "trying to get money out of developers", it is to demonstrate a comparison in the money made.
However, you are quite right that the math in the article is flawed: thankfully, some parts compensate by being conservative; once you take into account processing fees and other fixed costs (as various others have done), Apple's profit on the App Store is closer to 10%, not 30%.
We then get $4.9b*10%/160k, giving (conservatively, working back up towards 12%) ~$3500/developer. ($300+$99)/$3500 is >10%, which is still an interesting figure to be able to trot about at conferences (especially if you try to estimate the money spent on Macs).
(If I were to try to undermine the math in this argument, I'd probably do so from a different angle: the $99 is not pure profit, as Apple has employees scanning over the contracts and vetting corporate accounts; the fixed per-signup costs need to be removed.)
(Additionally, I question whether the average developer buys the most expensive device Apple offers, or instead purchases an iPod touch to use only for development; and then, keeps the iPod touch for longer than a year. A bi-yearly iPod touch would destroy this math.)