App Store Table Scraps

Interesting stats courtesy of Tim Bray:

$350 for Apple · They’re obviously the best at turning a profit on selling phones. As Asymco reports, Apple gets about $650 per iPhone, has a margin around 55%, and thus makes a gross profit of $350 or so apiece.

$590 for AT&T · I went and dug through their 2011 Q3 numbers: They claimed a smartphone ARPU (dollars per customer per month) of $83.46 and reported a 29.6% gross margin; which over two years (a reasonable lifetime for a phone), by my math comes to just under $600.

(Dear businesspeople: I know the difference between “gross profit” and real money, and there are probably lots of places in the preceding two paragraphs where you might want to quibble with the accounting. But stay with me a minute.)

$12 for App Writers · Back to Asymco; Horace calculated the total amount that the average user spends for apps on the average iOS device. Everyone thinks that iOS is the place to go to monetize apps. Yep, twelve bucks per device.

Yes, that $12 per device is pretty bad but I think much of this is a bi-product of what is available for the devices now. There are very few categories in which I have to spend money in order to get a high-quality app. And if you add in the fact that many families have multiple devices — and that everyone in a family gets the app for one price — then the price is actually higher. Let’s say the typical family has three devices — two iPhones and an iPad — then we are really talking $36 per family. Not great but better. Okay, that really stinks if you figure that Angry Birds has probably taken $4 per device all by themselves. (Just kidding. Probably more like $1.)

The reality is, for most of us there are only, as Tim put it, table scraps available in selling apps in App Stores. But that is the reality and we as developers need to figure out how to make that work for us.