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Apple’s definition of “a bit over break even”

09 Jun 2010 : apple, biz

During the Q1/2010 earnings call Apple CFO Peter Oppenheimer stated a somewhat surprising remark about the economic performance of the App Store:

Regarding the App Store and iTunes stores, we are running those a bit over break even, and that hasn’t changed.

(Source: AppleInsider)

Last night – during his WWDC 2010 keynote – Steve Jobs revealed that Apple has paid out over $1 bilion to app developers. As we know, Apple maintains 30% of app sales and pays 70% to the developers; hence we can assume, that Apple made at least $428 million from those sales since the introduction of the App Store back in 2008.

Even if there are hords of people working in the App Store area to review the apps, some hundred million dollars earning per year should be far enough to run the business well over break-even; it’s a relevant contributor to the overall earnings of Apple. Probably they include all the marketing cost for apps in their calculation to downplay this fizzy source of income. Not to mention the $99 they get from each developer as the Developer Program fee…