David Lentz

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

The Apps Store, like the iTunes Music/Media Store, is not significant in its direct revenue contribution, and is not intended as a profit center. The primary purpose of these "stores" is to give people more reasons to buy iPods, iPhones, and Macs.

How effective these "stores" are toward that end is difficult to say, but it seems to be working.

A better way to treat these "stores" financially is to model them as advertising that generates a small amount of direct revenue instead of a charge against earnings.