Downloads from the Apple (NASDAQ:AAPL) App Store now out-number the population of the People’s Republic of China by a margin of two-to-one.
Apple announced that more than three billion apps have been downloaded App Store by iPhone and iPod touch users worldwide.
“Three billion applications downloaded in less than 18 months—this is like nothing we’ve ever seen before,” said Steve Jobs, Apple’s CEO. “The revolutionary App Store offers iPhone and iPod touch users an experience unlike anything else available on other mobile devices, and we see no signs of the competition catching up anytime soon.”
Does it matter? Perhaps not.
Apple has over 150,000 applications at the App Store which earned the company an extremely modest $60 million to $110 million per quarter, according to Bernstein Research
Apple continues to make the case that its huge applications download operation improves customer loyalty for the iPhone. Customer can create an almost infinite combination of applications to suit their needs. But, it is extremely likely that a very small number of applications make up 99% of downloads rendering the balance of the App Store inventory nearly useless.
Apple’s argument that the App Store creates incredible loyalty is being undercut by the rapidly growing success of Google (NASDAQ:GOOG) Android-based phones. Android has only been in commercial release for a year, but it is gaining market share on Apple and other smartphones as each days passes. Google will release its own handset, the Nexus One, today
The App Store’s benefits to the company may turn out to be very modest.
Douglas A. McIntyre
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