Oil…ooops….Apps!!!

I was looking up some numbers on the weekend.

In June 2010, Apple declared that the 5th Billion app had been downloaded via the iTunes platform.

Last week (Jan 2011), Apple declared that the 10th Billion app had been downloaded.

If you just look at the simple maths of the app downloads over the past year, its evident that Apple is well on its way to delivering 1 BILLION APP DOWNLOADS A MONTH!

Yup – its easily 1 billion a month and counting.

This means about 35 million apps a day.

Assuming that there are at least 200 million+ apple devices out there (last report from Apple stated 160 million), thats a good healthy number.

Extrapolating the maths:

Lets assume that of the 1 billion, 10% are paid apps.

Thats 100 million paid apps a month = 100 million US$ topline for Apple ( again assuming paid apps at 99 cents only – lots are more) – thats 1.2 Billion per annum.

Apple keeps 30% = 30 million $ a month or 360 million per annum is their net margin.

Honestly, thats not much considering that 2011 may well be a 100 BILLION $ topline year for Apple (last quarter sales were 26 billion).

So, 1.2 billion would be just 1.2% of the sales of Apple. Also, the 900 million apps that get delivered for free consume lots of bandwidth and serving costs etc, so it may not be a very profitable business for Apple as yet. (In some reports, Apple has stated thats the App Store is just about making money for them now).

Lets also dimension the new Sales of Apple Devices and project what is going to happen in 2011

So with 5 billion Apps or 150 million apps selling every day, that will be double the Oil that is produced in the world (85-95 million barrels)!!

Any doubts therefore on why Apple (current market cap – 300 BILLION US$) will not be more valuable in market capitalisation than Exxon Mobile (Current market cap – 400 Billion US$)??

UPDATE!!!! 12th AUGUST 2011

APPLE BEAT EXXON yesterday to become the world’s most valuable company!! see comment below