deagol

How Much Will the App Store Contribute to Apple’s Bottom Line?

First things first, your application of the Net Margin formula is flawed. It's 14% of the revenue number, not the gross 30% take. So, your estimates are off by more than a factor of 3.

Second, you did all those iTunes calculations for nothing. If you are treating the 14% Net Margin as a given, you don't need to know anything else. 99% of the article is running around in circles going nowhere. Here's a shorter version of it:

"The EPS contribution from Steve Jobs' estimates of the App Store sales (annualized) would be:"

$360m * .14 / 903m = $.056 (5.6 cents)
$500m * .14 / 903m = $.078 (7.8 cents)
$1b * .14 / 903m = $.155 (15.5 cents)

That's it. That's all this article is about. And it's still worthless, as you point out in the conclusion (applying the same company-wide Net Margin to any/all business segment is just inane). I completely disagree with your final statement that "this at least creates a factual framework for looking at it."

Sorry if this was harsh. Nothing personal, but if I were you I would want to delete this whole article, and maybe leave an apology to my readers, hoping that they understand that we all make mistakes once in a while.