July 2, 2012

iPhone estimated to have generated $150 billion in revenue globally

Apple’s iPhone launched five years ago this week and to say it has been successful is an understatement. Based on a Strategy Analytics report cited by AppleInsider, Apple has shipped 250 million iPhones cumulatively worldwide and has generated US$ 150 billion in revenue from these shipments.

“The iPhone portfolio has become a huge generator of cash and profit for Apple,” said Neil Mawston, executive director at Strategy Analytics. He adds, “A quarter of a billion iPhones have been shipped cumulatively worldwide in the first five years since launch and Apple reaches its fifth birthday at the top of its game.”

Apple now is one of the top smartphone manufacturers and among the top three mobile phone makers worldwide. Last quarter alone, the company shipped 35 million iPhones and this number may increase as Apple expands its business in Asia and other emerging markets.



TUAW – The Unofficial Apple Weblog

After 5 years, Apple’s iPhone has generated $150B in revenue

By Neil Hughes

Published: 08:00 AM EST (05:00 AM PST)
This week marks the fifth anniversary of the launch of the first iPhone. Since then, Apple’s smartphone is estimated to have generated the company $ 150 billion of cumulative revenues worldwide.

The first iPhone officially launched on June 29, 2007, making this Friday the official five-year anniversary. Recognizing the milestone, Strategy Analytics on Wednesday offered its latest statistics, noting that Apple has shipped 250 million iPhones cumulatively worldwide, generating $ 150 billion in cumulative revenues.

“The iPhone portfolio has become a huge generator of cash and profit for Apple,” said Neil Mawston, executive director at Strategy Analytics. “A quarter of a billion iPhones have been shipped cumulatively worldwide in the first five years since launch and Apple reaches its fifth birthday at the top of its game.”

While the first five years of the iPhone have been an undeniable success for Apple, propelling the company to become the largest in the world by market capitalization. But Mawston said the next five years could be more difficult for Apple, as the competition improves and some mobile operators become concerned about subsidies spent on the iPhone.

Currently, the iPhone is so popular that Apple sells more handsets per day than there are babies born in the world, according to VoucherCodes.co.uk. The retail outlet also noted that since the release of the iPhone, Apple’s worldwide brand ranking has catapulted from 44th place to No. 1.

The first iPhone was introduced in early 2007 by Apple co-founder Steve Jobs as three devices in one: a “revolutionary mobile phone,” a “widescreen iPod,” and a “breakthrough Internet communications device.” Since then, the iPhone’s upward trajectory has been consistent, as Apple continues to deliver record breaking quarters and sales continue to grow.

In the last quarter alone, Apple shipped 35.1 million iPhones, helping to propel the company to the 250 million milestone that Strategy Analytics believes the company has crossed ahead of the iPhone’s five-year anniversary. In its last quarterly earnings conference call, Apple executives announced that more than 360 million iOS devices, including the iPhone, iPod touch and iPad, had been sold to date.

AppleInsider

Spotify reportedly number two revenue source for record labels, still far behind iTunes

By Mikey Campbell

Published: 08:32 PM EST (05:32 PM PST)
On-demand free and subscription-based music streamer Spotify is now reportedly the second largest source of revenue for the world’s major record labels but lags far behind Apple’s market-dominating iTunes.

The claims, which have not been independently confirmed, come from a source close to the company who notes that even at number two, Spotify has a huge gap to overcome to reach a level of success enjoyed by iTunes, reports Business Insider.

According to Business Insider Intelligence iTunes paid out an estimated $ 3.2 billion to music publishers in 2011 which is in line with the numbers given out during the company’s quarterly conference calls. Apple’s second quarter 2012 was

A report in 2010 suggested that Apple was in talks to buy Spotify, but the rumor ultimately bore no fruit.

Spotify was founded in 2006 and became a popular service in Europe before crossing the pond to launch in the U.S. in July 2011 with the slogan “any track, any time, anywhere.” At the time the company had a catalog of 15 million songs but that number has swelled to 18 million and grows by about 10,000 to 20,000 tracks per day.

Recent estimates from analytics firm AppData found that about 23 million people used Spotify last month. During the D10 conference in May, Spotify founder and CEO Daniel Ek said that there are about 10 million users in the U.S. alone, over 3 million of whom are paying subscribers.

Also at D10 Spotify Director, Napster co-founder and former Facebook president Sean Parker alleged that Apple attempted to keep the service out of the U.S. as it directly competes with iTunes.

“If we [Spotify] continue growing at our current rate in terms of subscriptions and downloads, we’ll overtake iTunes in terms of contributions to the recorded music business in under two years,” Parker said at SXSW.

There are three tiers in Spotify’s payment structure: Free, which includes limited ad-supported music listening; Unlimited, which plays tracks ad-free for $ 4.99 a month; and the $ 9.99 Premium that allows customers to stream to smartphones and save tracks for offline listening. A new radio feature much like Pandora was introduced alongside the latest update to the Spotify iOS app in June and removes the mobile listening ban for Free level users.

The music startup continues to grow and is looking to raise $ 220 million at a $ 4 billion valuation for 2012 following last year’s $ 100 million at a $ 1 billion valuation.

AppleInsider

Baidu, Apple to share revenue on iPhone search

We’ve reported on how Apple is encouraging development in the Chinese market, and it’s not going to be without financial reward for services over there. Bloomberg reports that Apple and Baidu, the Chinese search engine, will be sharing advertising revenue. Baidu said it’s similar to contracts established with Google for its Android operating system. Baidu is used in 80% of the web searches performed in China, Bloomberg says and will be included in iOS 6.

The growing partnership between Apple and Baidu isn’t a surprise. The Next Web first reported on this a couple months ago.



TUAW – The Unofficial Apple Weblog

Baidu, Apple to share revenue on iPhone search

We’ve reported on how Apple is encouraging development in the Chinese market, and it’s not going to be without financial reward for services over there. Bloomberg reports that Apple and Baidu, the Chinese search engine, will be sharing advertising revenue. Baidu said it’s similar to contracts established with Google for its Android operating system. Baidu is used in 80% of the web searches performed in China, Bloomberg says and will be included in iOS 6.

The growing partnership between Apple and Baidu isn’t a surprise. The Next Web first reported on this a couple months ago.



TUAW – The Unofficial Apple Weblog

Baidu and Apple to share revenue from iPhone searches in China

By Sam Oliver

Published: 09:53 AM EST (06:53 AM PST)
The addition of Chinese search engine Baidu to iOS later this year will give Apple a cut of advertising revenue from the popular website.

Terms of the deal are similar to revenue sharing agreements with other smartphone makers who provide built-in Baidu search, Wang Jing, vice president of the Beijing-based company, said in an interview with Bloomberg. Baidu accounts for about 80 percent of Web searches in China.

Baidu integration is already available in about 80 percent of Android-based smartphones in China. The search engine has helped push its presence on mobile devices by sharing advertising revenue with hardware partners.

Apple announced this week that both iOS 6 and OS X 10.8 Mountain Lion will add Baidu as a built-in search option for Chinese users. Apple’s focus on China also includes support for micro-blogging via Sina Weibo and video sharing for Youku and Tudou.

Baidu integration iOS will also extend to the voice-driven Siri personal assistant on the iPhone. When iOS 6 launches this fall, Siri will also understand Mandarin, tuned for both Taiwan and the Chinese mainland, and Cantonese, for Hong Kong and the mainland.

Last quarter, Apple’s revenue in China tripled, and the country became its largest market outside of the U.S. Under Chief Executive Tim Cook, China has become a major focus for Apple. In January, Cook said the nation’s demand for the Apple products, particularly the iPhone, has been “staggering.”

AppleInsider

iOS to provide 2% of Google’s total revenue in 2012, analyst says

By AppleInsider Staff

Published: 11:09 PM EST (08:09 PM PST)
Devices running Apple’s iOS, the main competition for Google’s Android OS, are expected to power the largest chunk of the search giant’s mobile revenue and will represent two percent of the company’s total revenue for 2012.

Senior Analyst Gene Munster at Piper Jaffray said in a note to investors on Wednesday that he estimates Google will take in some $ 4.5 billion in mobile revenue over the year, $ 500 million from display and $ 4 billion from search, and Apple’s iOS platform is set to be one of the biggest contributors.

Munster calculates that if iOS accounts for 40 percent of Google’s mobile profits, which equates to $ 1.6 billion, the net after TAC would be half that or two percent of the company’s total revenue. The estimate is conservative compared to a March report that found 80 percent of Google’s mobile revenue came from iOS while Android only accounted for 20 percent.

The analyst also notes that Apple’s rumored switch away from the iOS Google Maps app to a proprietary mapping solution is unlikely to affect mobile revenues for either company. The change would further minimize Google’s presence in iOS as its Maps app came pre-installed on all iPhones since the handset was first released in 2007.

Interestingly, Munster believes that Google Maps will still be available through the iTunes App Store, which is also home to other products like Google+, Gmail and Google Search. It remains unclear whether the app will be found to replicate features already offered by iOS which would give Apple cause to reject it under the App Store’s guidelines.

Google Maps could be the tip of the iceberg, however, as the analyst believes that an iOS version of the Chrome web browser is in the works as Google tries to enlarge its presence on Apple’s popular devices.

AppleInsider

Netflix online movie streaming revenue explodes, slices Apple share in half

By Mikey Campbell

Published: 11:14 PM EST (08:14 PM PST)
Incredible gains in subscription-based online video-on-demand allowed Netflix to become the number one U.S. online movie service by revenue for 2011 after taking a deep cut into Apple’s share of the market.

According to statistics released by research firm IHS, the company known for its red DVD-carrying envelopes grew its share of market revenue from less than one percent in 2010 to over 40 percent in 2011, enough to overtake former leader Apple and its iTunes service. It was reported in March 2011 that Apple only accounted for 4 percent of the U.S. digital video market, but lead in terms of video sales.

Revenue from subscription-based video-on-demand (SVOD) jumped to $ 454 million in 2011, representing an astounding 10,000 percent change from 2010′s $ 4.3 million. SVOD subsequently became the most valuable sector of the U.S. online movie market, grossly outpacing the 75 percent revenue growth seen by transaction-based services like iTunes.

“We are in the midst of a significant change in the way people pay to consume movies online,” said Dan Cryan, research director for digital media at IHS. “All the significant growth in revenue in the U.S. online movie business in 2011 was generated by rental business models, which provide temporary access, not permanent ownership. Rental delivers unlimited consumption with a low monthly fee for older titles as well as cheap rentals of new releases, providing the kind of value that online consumers want. In contrast, EST, which is much more profitable for studios on a per-transaction basis, is stuck in the doldrums.”

IHS Screen Digest June 2012 showed Apple’s piece of the pie shrink from 60.8 percent in 2010 to 32.3 percent in 2011, a precipitous drop from the overwhelming 71.5 percent share iTunes enjoyed in 2009. While the iPad maker saw slight declines in 2009 and 2010, the company was well ahead of its closest competition Microsoft, which held 16.7 percent of the market two years ago and Netflix barely factored into the equation.

Netflix’s performance is largely based on a combination of the company’s decision to directly charge for SVOD access and an overall consumer trend away from physical media services that allow customers an allotted number of DVD and Blu-Ray discs for a monthly fee. When Netflix flipped the switch on its subscription-based online streaming service reaction was minimal as it was included as part of the mail-order pacakge. Interest in SVOD increased, however, as new internet-connected TVs and set-top boxes debuted making it easier for customers to access content. Also playing a factor was the backlash from existing Netflix customers over an attempted spin-off of the company’s mail service drove customers online.

“2011 marked a sea change in the online movies business that saw the balance of consumer spending shift from a DVD-like transactional model to more TV-like subscription approach,” Cryan said. “The online movie business more than doubled in 2011 to reach $ 992 million and it is expected to double this year as well.”

Interestingly, the surge in SVOD has caused the online video market to split. Subscription-based services usually concentrate on older titles and TV shows while transaction-based solutions see a majority of its revenue come from new releases. The discrepancy in content stems from studio agreements, demographic targeting and market parity.

“Netflix and Apple are competing for some of the same consumer time and money. However, the core value proposition of the two services is actually very different,” Cryan said.

Both Apple and Netflix are the top players in their respective arenas despite the iPad maker seeing a drop in transactional sales from 64.6 percent in 2010 to 60 percent in 2011. Netflix rules the SVOD roost as the market share held by its closest competitor Hulu is some ten times smaller.

The amazing growth in the SVOD segment isn’t seen to continue, however, as the tumult seen in the online movie sector has mostly calmed. With consumers comfortable in their respective subscription and transactional camps, the only disruption could be the entry of a new player or a revolutionary product.

AppleInsider

iPad sales to prop up revenue as Apple readies new products, report says

By Mikey Campbell

Published: 05:52 PM EST (02:52 PM PST)
An AAPL investor report released on Tuesday estimates that the iPad will carry a healthy portion of sales over the next two quarters while the company prepares to launch a next-generation handset and new laptop models.

Barclays Equity Research believes Apple’s market cap, which stands at $ 531.28B as of Tuesday, will see further gains as the company continues to pump profits from the PC market with its iPad product line.

The investment bank left its AAPL price target unchanged at $ 750, giving the stock an overweight rating due to strong iPad and iPhone demand, Mac gains and international expansion. As in previous years, Apple’s staggered new product launch cycle will ward off stagnation and keep demand high for its lucrative device lineup.

Spearheading the next two quarters will be the iPad, which now includes an “entry-level” device in the iPad 2 carry-over from 2011. Estimates see Apple shipping 14.2 million iPad unties in the second quarter of the 2012 calendar year which represents quarter-on-quarter growth of 20 percent.

Going further, the report sees upside benefits from a full three month window of availability for the new iPad and estimates that the third quarter will bring a 12 percent increase in shipments or 15.9 million units. In total, the firm expects iPad sales of 57.2 million for fiscal 2012 and 78.5 million for 2013, up 77 percent and 37 percent year-to-year, respectively.

In a separate preliminary first quarter 2012 tablet shipment report from IDC it was estimated that Apple took a 68 percent share of worldwide tablet shipments totaling 17.4 million units, a nearly 16 percent gain from the 2011 holiday quarter.

Once thought to be a minor threat to Apple’s iOS tablet, Amazon’s reasonably-priced Android-based Kindle Fire seems to have lost its teeth after dropping from a 16.8 percent share of the market at the end of 2011 to just 4 percent in the first quarter of 2012.

“We continue to believe that the iPad will cannibalize PC sales and do not believe that Apple needs to launch a compromised “hybrid” product of a Mac with a detachable screen,” writes Barclays Capital analyst Ben Reitzes. “We believe iPad users will increasingly “dock” iPads to keyboards.”

Reitzes is referring to recent online murmurs that Apple may be looking to create a competing product to new Windows 8 devices that merge tablet and laptop form factors. The rumors were shot down by Apple CEO Tim Cook, who said during the company’s second quarter earnings conference call that while such product was possible, the compromises would outweigh the benefits.

“You can converge a toaster and a refrigerator, but you know, those things are probably not going to be pleasing to the user,” Cook said.

On the topic of Windows-based laptops, Barclays believes that expected upcoming refreshes of Apple’s MacBook product lines, combined with the summer release of OS X Mountain Lion, will counter any perceived threat from so-called Ultrabooks being pushed by Intel.

“We are very upbeat about the prospects for new MacBook Pros and iMacs to be launched this June quarter – and even more optimistic about a new line of MacBook Airs to likely ship in the September quarter at more attractive price points,” Reitzes writes.

AppleInsider

Game Over, Android: Apple Has 84% Of Mobile Gaming Revenue

Game Over, Android: Apple Has 84% Of Mobile Gaming Revenue

Let’s hear that again. Apple is taking in 84 percent of all mobile gaming revenue in the US.

With all the fooferaw about how many more Android handsets are selling than iPhones, it’s easy to think that Apple may be on the way out. Not so, says a new report from NewZoo, a market research company in the gaming space.

According to the report, the number of US mobile gamers has gone from 75 million to 101 million, with 69% playing on smartphones and 21% on tablets. The biggest segment of growth, though, is in the segment of paying gamers. Newzoo reports that the number of paying players has grown to 37 million US mobile gamers, which is 36% of all mobile gamers. That’s a lot of paying customers.

How is this even possible? “When analyzing Apple’s successful monetization, there is one dominant factor outside of differences in audience demographics and preferences: Apple requires users to connect their credit card information directly to their account, thus creating a seamless purchase experience,” said Newzoo’s CEO Peter Warman. “I can hardly imagine any other company in the world that would be able to get away with this, including Google and Microsoft.”

Bottom line, this new report points to the fact that while Android has made headway quickly, especially with Amazon’s new tablet, Apple still rules the roost with mobile gamers, and paying mobile gamers at that. It’s satisfying to read this hard data and know that our own opinion of how much better the iOS hardware and app ecosystem is, at least for now, is backed up with numbers.

Whether it’s the fact that Apple makes it easy to purchase small-ticket gaming apps, or just that consumers see iOS apps as inherently better experiences, the fact remains that Apple is still the big dog in the yard.

Rob LeFebvre

Rob LeFebvre is a freelance writer and editor living in Anchorage, Alaska. He contributes to online tech, gaming and iOS websites around the net, including Cult of Mac, 148Apps, VentureBeat, and Paste Magazine. He owns and operates GamesAreEvil as well, so it’s surprising he finds time to have two amazing kids, a disco band, and (yes) a day-job.

(sorry, you need Javascript to see this e-mail address)| Read more posts by .

Cult of Mac