Apple

Telecom Timeout: The App Store Agenda

In this video, I speak with Lewis Ward, IDC research manager, and Arvin Chander, with Qualcomm, about the future of mobile app stores and what they mean for carriers. Is the Apple iTunes model destined for the future, giving carriers only a slim cut of revenue? Or is there are brighter future for wireless carriers? Watch the video to hear why Ward predicts carriers will eventually only get a 10% cut of this growing market.

Apple’s slice of the app store pie

I’ve reported that wireless service providers aren’t seeing much direct app store revenue, so when I came across an article in yesterday’s Wall Street Journal on Apple’s cut of the app store, I read with great interest.

According to Sanford Bernstein analyst Toni Sacconaghi, Apple’s 30% commission could net them $150 million this year, the Journal reported. Not bad, but small potatoes compared to the $2.8 billion the iPhone’s hardware revenue earned in the 6 months to March. The Journal suggests that much of that latter revenue is indirectly derived from the app store, however, because the 50,000 apps iPhone offers provide a compelling advantage for many users over the 2,000 apps RIM’s BlackBerry App World offers, for example.

The figure that struck me the most, however, was R&D spending: RIM spent 6.2% of its 2008 revenue on R&D, with Microsoft, Palm, and Motorola each spending 12%-15% on R&D. Apple? Just 3.4%, yet they’re still hailed as the innovation leaders.

Looks like in Apple’s case you can have pie and eat it, too. Even better, it’s the third-party developers doing the baking.

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• Dear gadget hounds: Wireless networks more than their phones
• Mobile app stores deliver little direct revenue but are critical for ARPU