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

Popular Stories

iOS 18 Apple Account Name Feature 2

RIP, Apple ID

Tuesday September 17, 2024 3:18 pm PDT by
The "Apple ID" era is officially over. The transition from "Apple ID" to "Apple Account" went from a rumor to an official announcement to something that has now been fully completed. As of this week, the account.apple.com website is fully updated with Apple Account branding. "Apple ID is now Apple Account," the page says. "You can still sign in with the same email address or phone...
Generic iOS 18 Feature Real Mock

iOS 18 Available Now With These 8 New Features For Your iPhone

Sunday September 15, 2024 10:09 am PDT by
Following over three months of beta testing, iOS 18 was finally widely released to the public on Monday, September 16. The update is available in the Settings app under General → Software Update on the iPhone XS and newer. Below, we have highlighted eight key new features included in iOS 18, and Apple shared a complete list of new features and changes last week. Note that Apple...
apple wallet drivers license feature iPhone 15 pro

Apple Announces iPhone Driver's Licenses Will Come to These Additional U.S. States

Thursday September 19, 2024 10:45 am PDT by
In select U.S. states, residents can add their driver's license or state ID to the Wallet app on the iPhone and Apple Watch, providing a convenient and contactless way to display proof of identity or age at select airports and businesses, and in select apps. The list of states where the feature is available currently includes Arizona, Maryland, Colorado, Georgia, Ohio, Hawaii, and most recently...
AirPods Pro Firmware Feature

Apple Releases New AirPods Pro 2 and AirPods 4 Firmware

Wednesday September 18, 2024 11:34 am PDT by
Apple today released a new firmware update for all AirPods Pro 2 and AirPods 4 models. The AirPods Pro 2 firmware has a build number of 7A302, up from 7A294, and the AirPods 4 firmware has a build number of 7A304. There is no word yet on what’s included in the firmware, but it comes just a week after Apple last updated the AirPods Pro 2 firmware to add iOS 18 features like support for head...
Apple Logo Spotlight

Apple Just Broke a Tradition It Held for 17 Years

Wednesday September 18, 2024 7:40 am PDT by
It's the end of an era. It has been confirmed that the latest iPhones do not come with Apple stickers in the box, breaking a 17-year tradition dating back to the original iPhone. Marques Brownlee shared an unboxing video that confirms the new iPhone 16, iPhone 16 Plus, iPhone 16 Pro, and iPhone 16 Pro Max do not include Apple stickers in the box, as part of Apple's goal of removing plastic...
m4 iPad Pro Horizontal Feature Purple and Blue

Apple Pulls iPadOS 18 for M4 iPad Pro After Bricking Complaints [Updated]

Tuesday September 17, 2024 11:24 am PDT by
Apple stopped signing the iPadOS 18 update for the M4 iPad Pro models, which means the new software is no longer available to be downloaded and installed at the current time. The update appears to have been pulled following complaints from some iPad Pro owners, who found that the update bricked their devices. There are reports on Reddit from iPad Pro users who had an interruption in the...

Top Rated Comments

djcerla Avatar
100 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
100 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
100 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
100 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
100 months ago
It's the only ecosystem I've managed to teach my parents
Score: 9 Votes (Like | Disagree)
djcerla Avatar
100 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)