Apple will soon have earned $1trn from iOS devices since 2007

12 Jan 201725 Shares

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By 2017, iOS products including the iPhone, iPad, Apple Watch and Apple TV will have generated $1trn for Apple. Image: Apple

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In January 2007, Steve Jobs heralded a new age of computing with the words “one more thing”. By 2017, iOS products including the iPhone, iPad, Apple Watch and Apple TV will have generated $1trn for Apple.

According to figures from business analyst Horace Dediu of Asymco, revenues from iOS product sales will reach $980bn by the middle of this year.

In its first 10 years, the iPhone will have sold 1.2bn units, making it the most successful product launch of all time.

‘Chances are higher that users will switch from Android to iPhone and not the other way’
– HORACE DEDIU

The iPhone subsequently spawned the App Store as well as devices like the iPod touch (2007), the Apple TV (2007), the iPad (2010) and the Apple Watch (2015).

In addition to hardware, Apple also books iOS services revenues like content, apps, books and movies, which have totalled $100bn to date.

“This means that iOS will have generated over $1trn in revenues for Apple sometime this year,” said Dediu.

“In addition, developers building apps for iOS have been paid $60bn. The rate of payments has now reached $20bn a year.”

Dediu does not include revenue gleaned from other “mobile first” players such as Twitter, Facebook, Tencent, Baidu or others in this figure.

“I estimate that the cumulative revenues enabled by iOS across these businesses have exceeded $500bn, with a rate of revenue soon to reach $300bn a year.”

Not bad going, for something that the late Steve Jobs described simply as “one more thing”.

Virtuous cycle of value creation

Apple will soon have earned $1trn from iOS devices since 2007

The numbers of iOS units sold since 2007. Image: Asymco

“The revenue numbers can only hint at the change in behaviour among users. An iPhone is unlocked 80 times a day. Assuming 600m devices in use, there are 48bn sessions on iPhones every day; 17.5trn sessions every year.

“It is these instances of interaction and engagement [that] are desired by all businesses built on top of the ecosystem.”

Dediu believes that Apple is far from vulnerable at this time, due to its sizeable installed base and the virtuous cycle of value creation that will continue and accelerate.

“There is a temptation to think that such a business is fragile and will be disrupted. Challengers appear daily and the number of iPhone ‘killers’ is not measurable. One can cite the billion users of Nokia phones [that] defected. One can cite the loyalty of BlackBerry users that evaporated. One can even cite the juggernaut of Windows and how it became impotent. One can cite the vast number of Android devices offered at low prices.”

Dediu said there are reasons to believe that the iOS empire is far stronger and more resilient.

He said that unlike Nokia’s phones, Apple’s product is an ecosystem with network effects and dependencies on software and services.

“It’s also a monolithic product with a singular interface and form factor.

“Unlike BlackBerry, the iPhone does many jobs – too many to count. Indeed, the iPhone evolves and changes its core value over time.

“Although different in many ways from Windows, there are strong similarities in terms of loyalty and persistence of users. iOS even developed a dominant position in enterprises. Microsoft’s attempt to become a hardware company is a testament to the confluence of the two business models.

“And whereas Android was originally seen as the ‘good enough’ iPhone, potentially disrupting it, it turns out to be the ersatz iPhone.

“Chances are higher that users will switch from Android to iPhone and not the other way.”

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com