Apple Set to Earn $1 Trillion in Revenue From iOS Ecosystem By Middle of 2017

Apple's iOS ecosystem is on course to generate over $1 trillion in revenues for the company by the middle of this year, according to Asymco analyst Horace Dediu.

Dediu's prediction is based on several factors, starting with an expectation that Apple will have sold at least 1.2 billion iPhones in its first 10 years, earning it the rank of "most successful product of all time" and laying the foundations for the company's iPad, Apple TV, iPod touch, and Apple Watch categories.

iphone-units-sold

In its first 10 years, the iPhone will have sold at least 1.2 billion units, making it the most successful product of all time. The iPhone also enabled the iOS empire which includes the iPod touch, the iPad, the Apple Watch and Apple TV whose combined total unit sales will reach 1.75 billion units over 10 years. This total is likely to top 2 billion units by the end of 2018.

Dediu claims revenue from iOS device sales will total about $980 billion by the middle of this year, and adds to that estimate more than $100 billon in revenues from supporting services (including app content sales), putting the ecosystem's total worth above the $1 trillion mark.

The analyst notes this excludes payouts to iOS app developers of around $60 billion, with the rate of payments now reaching $20 billion per year. Those numbers would appear to tally with comments made by Apple CEO Tim Cook last August that the company has paid out more than $50 billion to developers over the lifetime of the App Store, which first launched for the iPhone in 2008.

Dediu points to the locked-in nature of Apple's ecosystem ensuring the iPhone's resilience and longevity, despite strong competition from so-called "iPhone killers" that come and go, while its robust feature set and attached services continue to earn it the market reputation as the premium smartphone to beat.

In addition, the analyst claims that Android users are now more likely to switch to iOS rather than the other way around – a trend supported by previous reports from both market analysts and Apple, including, notably, comments made in the company's Q4 2016 earnings call.

Dediu ends by predicting not another "Big Bang" for the iPhone, but a "process of continual improvement" as the smartphone enters its second decade. Indeed, the analyst expresses more excitement for its network of "ancilliary smart accessories" like the Apple Watch, the AirPods, Apple Pencil, and other possible new wearables that point toward a future where the iPhone is a hub to a mesh of personal devices. "The seamless integration of such devices is what has always set Apple apart," Dediu concludes.

Tag: Asymco

Top Rated Comments

djcerla Avatar
74 months ago
In an alternate, but very possible universe, the iPhone got crushed by Android. Developers flocked to Android-first or Android-only. Apple tried to stop the hemorrhage by creating cheap iPhone models, that ultimately devalued the brand, thus spiraling down even more.

In this universe, thankfully, Apple is a very well run company, and the iPhone thrived, leaving only the market scraps to the competition.
Score: 21 Votes (Like | Disagree)
McDonkel Avatar
74 months ago
It seems that 3/4 of the people on this forum think that Apple is doomed and Tim Cook should be fired, and that the key to Apple's turnaround is to turn the iPad into a Surface Pro and to make Macs more like Hackintoshes.

No amount of evidence, such as this article, will convince them that Apple is doing fine and making good choices that are popular with customers. They want their inch-thick iPad with mouse support and a file system, they want their Mac with a GTX 1080. And unless Apple delivers these things to them ASAP, Apple is doomed and Tim Cook is the worst.
Score: 14 Votes (Like | Disagree)
otternonsense Avatar
74 months ago
Loved your humor and thinking in this post but I have to make one correction. From the front lines (consumers with educational background in business) it seems that Apple has gone "stale", possibly when they released the first apple watch that was far from impressive (still own S0 and S2 so not bashing). I don't feel like looking up the video but look back at Tim Cook saying "we have amazing products in line to release this year", well we got the S2 which got minor tweaks (love it though), another iPhone with practically the same features plus a non-physical home button, and a MacBook that really isn't that impressive for how long the wait was. We didn't get anything from any of the other product lines, we didn't get anything "new", and nothing earth shattering as Cook seemed to have hyped it up, and we actually lost product lines like the monitors. This isn't a bash on Cook or an Apple was better with Jobs rant, just saying that the hype didn't seem to deliver last year like it was supposed to.
According to Cook, the best is always coming. It's hard to believe him though, because it never actually does.*

*this is a quasi-bash on Cook's Apple.
Score: 11 Votes (Like | Disagree)
otternonsense Avatar
74 months ago
No wonder the Mac is relegated in priorities... :(
Which makes zero business sense, because we NEED the Mac and Xcode to create those spiffy apps in the first place.
Score: 10 Votes (Like | Disagree)
Gandalf.Fix Avatar
74 months ago
It's the only ecosystem I've managed to teach my parents
Score: 9 Votes (Like | Disagree)
djcerla Avatar
74 months ago
When your only money making item is a phone and you have no other diversity, you can only ride that wave for so long before it vanishes. Apple is skating on thin ice and they need to diversify and bolster their current offerings and stop relying so heavily on ONE device to keep them going.
Uh?

The iPhone is far from being the only profitable business of the firm. At the contrary, every sector Apple competes in is profitable, from Services, which are enormously up YOY, to the Apple Watch (it's the size of Rolex), to Beats hardware to the iPad to obviously the Mac. Not to mention the billion-dollar business just launched with the AirPods.

Contrast this to Google, Facebook that get >95% revenues from the advertising trick. Everything else they do is losing them vast amounts of money, just check out Alphabet X' impressive list of high profile failures.

The iPhone is huge and unmatched, so all the other revenue streams look small in comparison, but having a huge and unmatched business is not a liability, it's a plus.
Score: 8 Votes (Like | Disagree)

Popular Stories

iOS 16

Apple Releases iOS 16.0.2 With Bug Fixes for iPhone 14 Pro Camera Vibration, Copy/Paste Issue and More

Thursday September 22, 2022 1:04 pm PDT by
Apple today released iOS 16.0.2, addressing a number of bugs that iPhone 14 owners have been experiencing since the new devices launched. iOS 16.0.2 comes two weeks after the launch of iOS 16, and it follows iOS 16.0.1, an update made available to iPhone 14 owners on launch day. The update is available for all iPhones that are capable of running iOS 16. The iOS 16.0.2 update can be...
maxresdefault

Video Review: Four Days With the iPhone 14 Pro Max

Wednesday September 21, 2022 7:49 am PDT by
Apple on Friday released the new iPhone 14 models, and MacRumors videographer Dan picked one up on launch day. He's been using the iPhone 14 Pro Max non-stop since it came out, and over on the MacRumors YouTube channel, has shared his initial thoughts on the day-to-day experience with the latest iPhone. Subscribe to the MacRumors YouTube channel for more videos. Dan's mini review highlights...
iPad Pro Big Ol Logo

Five Features Rumored for the New iPad Pro Expected Next Month

Wednesday September 21, 2022 1:36 am PDT by
Rumors suggest Apple will announce new 11-inch and 12.9-inch iPad Pro models as soon as next month. The new iPads will be the first update to the iPad Pro series since April 2021 and will be an overall incremental upgrade that brings new capabilities and functionality to the highest-end iPad. According to reports, Apple is planning an event for October to announce the new iPad Pro models, a...
ios 16 lock screen feature

Some iOS 16 Users Complain About Slow Spotlight Search and Battery Drain

Wednesday September 21, 2022 4:25 am PDT by
It's been nine days since Apple released iOS 16 to the public, bringing major changes to the Lock Screen, Messages, Maps, and more. In the days following the release, some users have encountered several issues on their iPhones, ranging from slow system performance to battery drain. In the past few days, iPhone 14 Pro users have shared specific bugs related to Apple's latest high-end iPhones, ...
Dynamic Island For Android Users Feature

Android App Copying iPhone 14 Pro's Dynamic Island Released on Play Store

Thursday September 22, 2022 7:57 am PDT by
A copycat version of the iPhone 14 Pro's Dynamic Island has arrived on Android's Google Play Store in the form of an app called "dynamicSpot." The app, still in beta, offers customers several different experiences at the top of their smartphones. In its current form, dynamicSpot offers playback control for songs, timers, battery status, and more features coming soon, according to the app's...
facebook meta

Meta Sued Over Tracking iPhone Users Despite Apple's Privacy Features

Thursday September 22, 2022 5:12 am PDT by
Meta is facing a new proposed class action lawsuit that accuses it of tracking and collecting the personal data of iPhone users, despite features and policies made by Apple which are meant to stop that same type of tracking. In August, it was revealed that with the Facebook and Instagram apps, Meta can track all of a user's key taps, keyboard inputs, and more, when using the in-app browser....
apple watch ultra reddit 1

Lucky Customer Gets New Apple Watch Ultra Two Days Early

Wednesday September 21, 2022 2:03 pm PDT by
With millions of devices shipping out to customers with every Apple launch, there's occasionally someone who gets lucky and gets a new product ahead of schedule. This time around, Redditor playalisticadillac received an Apple Watch Ultra from AT&T two days before the official debut, sharing some images on the social media site. The images include an unboxing and comparisons to the...
new airpods pro ear tips

Apple Explains Why Second-Generation AirPods Pro Ear Tips Are Incompatible With Original AirPods Pro

Thursday September 22, 2022 3:12 pm PDT by
Apple today explained why the new silicone ear tips for the second-generation AirPods Pro are not officially compatible with the original AirPods Pro. In an updated support document, Apple said the original AirPods Pro ear tips have "noticeably denser mesh" than the second-generation ear tips. Apple did not provide any additional details, but the mesh density could result in acoustical...