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
53 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
53 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
53 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
53 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
53 months ago
It's the only ecosystem I've managed to teach my parents
Score: 9 Votes (Like | Disagree)
djcerla Avatar
53 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)

Top Stories

lg wing

LG Considering Exit From Smartphone Business, Halts LCD Production for iPhone

Wednesday January 20, 2021 5:38 am PST by
LG is considering exiting the smartphone business entirely amid declining shipments and accrued losses of $4.5 billion over the past five years (via The Korea Herald). LG CEO Kwon Bong-Seok cautioned staff earlier today that the company is re-evaluating its presence in the smartphone industry: Since the competition in the global market for mobile devices is getting fiercer, it is about...
google maps detailed street level e1611052089473

Google Maps Gains Enhanced Street-Level Detail in Four Major Cities

Tuesday January 19, 2021 2:34 am PST by
Google Maps has quietly been updated to include significantly more detailed street-level information in a handful of key cities around the world. Upon zooming in, Google's maps for Central London, Tokyo, San Francisco, and New York now benefit from shapes and widths that match the scale of roads more accurately. Meanwhile, enhanced graphical representations of sidewalks, crosswalks,...
2019 mac pro side and front

Tim Cook Gifted Donald Trump 'First' 2019 Mac Pro

Wednesday January 20, 2021 5:45 pm PST by
Apple CEO Tim Cook gifted former United States President Donald Trump with the first 2019 Mac Pro that came off of the assembly line in Austin, Texas, according to a financial disclosure report that was released today (via The Verge). "Mac Pro Computer, the first created at the Flex Factory in Austin, Texas," reads the entry, which values the machine at $5,999, the base price for a Mac Pro....
airpods max sim ejector

AirPods Max Headband Removable With Just a SIM Ejector Tool, Hinting at Interchangeable Headbands

Tuesday January 19, 2021 8:25 am PST by
It is possible to remove the headband of AirPods Max with just a standard SIM card ejector tool, hinting at the possibility of interchanging headbands to achieve a different colorway. Image via Prelook In December, MacRumors revealed the large variety of AirPods Max ear cushion color combinations when it became clear that they were magnetically attatched and available for sale separately....
iphone 5s black slate

Images of Unreleased iPhone 5s in Black and Slate Shared Online

Sunday January 17, 2021 9:47 am PST by
Twitter user @DongleBookPro has today shared images of a prototype iPhone 5s in an unreleased Black and Slate color. The iPhone 5s was launched in September 2013. The device featured Touch ID, a 64-bit processor, and a True Tone LED flash for the first time. Other new features included a five-element lens with an f/2.2 aperture, a 15 percent larger camera sensor, Burst Mode, and Slo-Mo...
iphone 12 vs iphone 12 mini

Apple Shifting Some Production From iPhone 12 mini to iPhone 12 Pro to Meet Demand

Wednesday January 20, 2021 8:12 am PST by
Apple has reportedly cut production of the iPhone 12 mini by two million units to create more manufacturing capacity for the iPhone 12 Pro, according to a new Morgan Stanley investment note seen by PED30. Apple is believed to have made the switch for the first quarter of 2021 in an effort to combat continuing lead times for the more popular iPhone 12 Pro. iPhone 12 Pro lead times remain ...
Apple VR Feature

Bloomberg: Apple's First AR/VR Headset 'Pricey, Niche Precursor' to More Ambitious AR Glasses and Could Launch Next Year

Thursday January 21, 2021 3:27 am PST by
Apple's first virtual reality headset will be a "pricey, niche precursor" to a more ambitious augmented reality product, according to a new report from Bloomberg's Mark Gurman. As a mostly virtual reality device, it will display an all-encompassing 3-D digital environment for gaming, watching video and communicating. AR functionality, the ability to overlay images and information over a view...
shot on iphone 12 apple

Apple Highlights Photos Shot by iPhone 12 Users: Portraits, Cityscapes, and More

Tuesday January 19, 2021 6:05 am PST by
Apple today shared a gallery of photos shot by customers using the iPhone 12 mini, iPhone 12, iPhone 12 Pro, and iPhone 12 Pro Max, with scenes including cityscapes, landscapes, portraits of people, and more at day and night. Shot on iPhone 12 Pro Max by "NKCHU" in China (top) and shot on iPhone 12 Pro Max by Rohit Vohra in India (bottom) iPhone 12 mini and iPhone 12 models have a dual camera ...
Apple and Hyundai feature

Apple Car Production Again Linked to Kia Motor's US Plant in Georgia

Tuesday January 19, 2021 4:19 am PST by
Hyundai intends to transition the company's Apple Car involvement to its Kia brand as part of an internal arrangement that could see production move to the U.S., according to a new report today. On Sunday, Korea IT News reported that Apple and Hyundai are seeking a partnership agreement for the upcoming Apple Car by March, and that the electric vehicles could be made at a Georgia factory...
iPhone 13 Notch Feature

iPhone 13 Rumored to Feature Smaller Notch, Pro Model Cameras to Use Larger Image Sensor

Thursday January 21, 2021 1:38 am PST by
Apple's iPhone 13 series will feature a redesigned Face ID system that will allow for a smaller notch at the top of the screen, according to a new report today. The rumor comes via hit-and-miss Taiwanese industry publication DigiTimes, whose supply chain sources also claim that the ultra wide-angle lens in Apple's next-generation iPhones is due for an upgrade. The next-generation iPhones'...