Telecom Timeout

Jul 15 2009   2:43PM GMT

Apple’s slice of the app store pie

WPeterson William Peterson Profile: WPeterson

Grandma's secret ingredients were always nutmeg, high ARPU, and lots of love.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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