Gene Munster


'Gene Munster' Articles

Gene Munster Shares WWDC Predictions: Beats Product With Siri Integration, Improvements to AI and AR

Ahead of next week's Worldwide Developers Conference, Loup Ventures analyst Gene Munster today shared his predictions for the features and services that Apple will unveil during the event. Munster expects Apple to debut new Siri, AR, AI, and Digital Health functionality, including a Beats-branded accessory (presumably a speaker) that includes Siri integration, much like the HomePod. Some of Munster's predictions have been previously covered in rumors shared by Bloomberg's Mark Gurman, but Siri integration in a lower-cost Beats product is a new prediction. We expect Monday's keynote to be highlighted by extending the reach of Siri (most likely adding new domains, opening HomePod to more capabilities, and integrating Spotlight), along with additional AI tools (new Core ML extensions). We also anticipate new features around digital health (privacy and device management) and ARKit (development tools). Expect Siri integration with Beats. Collectively, these announcements advance the ease of use and intelligence of Apple's mobile and desktop experiences.According to Munster, Apple may be planning introduce a $250 Beats-branded product that will offer Siri integration similar to the HomePod, allowing Apple to "advance its digital assistant ambitions" with a more affordable option. Apple currently sells a Beats Pill+ speaker for $179.95, and the device has not been updated in some time. Apple is going to announce a new "Decade Collection" at WWDC according to a Best Buy leak, but that collection is limited to existing headphones in new colorways and does not

Gene Munster Predicts Apple Will Eventually Earn More From AirPods Than Apple Watch

Despite selling for $159, considerably less than the Apple Watch at between $269 and $1,499, longtime Apple analyst turned venture capitalist Gene Munster believes AirPods will be "bigger than the Apple Watch" over the next decade. Munster predicts that AirPods will contribute "about the same amount of revenue" to Apple's pocket as the Apple Watch by the company's 2022 fiscal year. He also predicts that AirPods will have an average price of $200 by then, as the product shifts towards what he calls "augmented audio."AirPods: Bigger Than Apple Watch. Over the next 10 years, we anticipate that AirPods will be bigger than the Apple Watch as the product evolves from simple wireless headphones to a wearable, augmented audio device. While both AirPods and Apple Watch should continue to grow, we see AirPods contributing about the same amount of revenue as Apple Watch by FY22. We expect the AirPods ASP to increase from $159 today to $200 in FY22 as the product shifts to augmented audio.Apple doesn't disclose AirPods or Apple Watch sales in its quarterly earnings results. Both products are instead grouped into its "Other Products" category, alongside sales of iPods, Apple TVs, Beats products, and accessories. Any revenue or sales numbers that circulate around are purely estimates. Apple reported $2.87 billion revenue from "Other Products" last quarter, a 31 percent increase from $2.18 billion in the year-ago quarter. Early last month, Apple CEO Tim Cook said the response to AirPods has been "great," with the wireless earphones remaining hard to come by. "Demand for

Apple's Stock Soars Past $1,000 Pre-Split Price as Bulls Think 'Golden Opportunity' to Buy Remains

AAPL rose over two percent on Tuesday to close at $143.80, a new all-time high. The stock also surpassed a per-share price of $1,000 when adjusted for Apple's 7-for-1 stock split in June 2014. Apple now has a market valuation of over $750 billion on its path towards becoming the world's first trillion dollar company. The milestone comes as longtime Apple analyst turned venture capitalist Gene Munster told CNBC that now remains a "golden opportunity" to buy Apple stock. Munster's new firm Loup Ventures has a $180 to $200 price range for AAPL, and he expects "clear sailing" for Apple investors in the months ahead. Apple analyst Brian White of brokerage firm Drexel Hamilton maintained his "buy" rating for AAPL today, with a price target of $185. He continues to believe that Apple remains "among the most underappreciated stocks in the world" and that "Apple has Samsung on the ropes like never before in recent memory." An excerpt from White's latest research note obtained by MacRumors:With Apple operating on all cylinders and a strong iPhone launch expected this fall, combined with the rise of more China-based competitors, we believe the pressure is on Samsung to deliver a strong upgrade without any missteps. We believe if Samsung stumbles again, the company's position in the smartphone market could be permanently impaired.Apple analyst Steven Milunovich of investment bank UBS has maintained his "buy" rating for AAPL as well, with a price target of $151 set in late February. In a bullish scenario where Apple has "caught the next major trend," he believes the

iPhone 7 Plus Stock Expected to Remain Tight Through Holiday Shopping Season

Apple is unlikely to reach iPhone 7 supply and demand equilibrium by the end of the December quarter, suggesting stock will remain tight through the holiday shopping season, according to Piper Jaffray analyst Gene Munster. Munster checked 134 Apple retail stores in the United States for in-store iPhone 7 and iPhone 7 Plus availability and found 47% of models he checked were available for pickup compared to 40% a month ago. By comparison, he said last year the iPhone 6s lineup was at 100% availability at this time. iPhone 7 models remain more widely available than iPhone 7 Plus models by a significant margin. In a research note obtained by MacRumors, Munster said iPhone 7 Plus inventory remains constrained, with only 3% of SKUs available in the Apple retail stores he checked compared to 14% a month ago. Piper Jaffray said iPhone 7 and iPhone 7 Plus inventory in China continues to be more constrained than on Apple's home turf. It found 16% total availability of SKUs at 96 China Unicom stores versus the 47% figure in the United

Teen Interest in iPhone Remains High, Apple Watch is Most Popular Smart Watch

Teen interest in Apple's iPhone continues to grow, according to data gathered by Piper Jaffray analyst Gene Munster in the latest semiannual teen survey. 69 percent of teens surveyed own iPhones, up from 67 percent in the Fall 2015 survey. 75 percent of teens queried expect their next device to be an iPhone, up one percent from the previous survey. Smart watches are not as popular among teens as smartphones, and only 12 percent of those surveyed owned a smart watch. With teen smart watch owners, the Apple Watch was the model most often chosen -- of the 12 percent of teens who own a smart watch, 71 percent are Apple Watches. Just 10 percent of teens say they're interested in purchasing a smart watch, a number that's grown just two percent since fall of 2015. We would expect the Apple Watch to maintain market share close to that of iPhone, but don't expect major changes in interest until stronger use cases emerge. We continue to view CY17 as the potential breakout year for Apple Watch.When considering the full range of wearables, the Fitbit was the most preferred brand among teens, with 72 percent surveyed choosing the Fitbit. Nike came in second at 12 percent, and interest in the Apple Watch was at six percent. Wearables are growing in popularity, with 22 percent of females and 18 percent of males surveyed owning a fitness tracker, up from 14 and 12 percent, respectively, in the previous survey. Tablet interest and ownership among teens in Munster's annual survey has been steadily declining. 59 percent of teens own a tablet, down from 61 percent, and just 13

Virtual Reality Coming to iOS Within 2 Years, Claims Gene Munster

Piper Jaffray analyst Gene Munster believes Apple plans to put iOS at the center of several forthcoming augmented reality and VR innovations set to launch within the next two years. In a research note obtained by AppleInsider, Munster claims a timeline of recent purchases and hires by the company suggests that iOS support for "mixed reality" applications could be set for launch as soon as 2018. The analyst points to a LinkedIn search which reveals at least 141 Apple employees with a background in AR, although it should be noted that the same search returns 425 and 267 people with similar experience working at Microsoft and Google, respectively. Of particular interest to Apple is the concept of "mixed reality" wearables, or advanced optics that use embedded cameras and sensors to blend holographic imagery with real-life objects, claims Munster. Intellectual property gained via research and development projects as well as strategic acquisitions, such as Apple's purchase of 3D body sensing firm PrimeSense, are said to be behind the recent drive. We believe 10 years from now Generation Z will find reality inefficient. We believe the concept of an 'inefficient reality' is evident through smartphone use today — the precursor to mixed reality — offering users the ability to find more information as needed.The analyst goes on to suggest a natural progression in the personal technology market from smartphones to AR/VR and believes Apple is looking at VR as an iPhone peripheral, much like the Apple Watch. The prospect of Apple releasing hardware on this front in the

Gene Munster Faces the Prospect of No Apple Television Set

Piper Jaffray analyst Gene Munster today confirmed that the asset management firm no longer expects an Apple-branded television set to launch in the future. The news comes courtesy of Munster's Company Note updates and follows yesterday's confirmation, out of The Wall Street Journal, that Apple ditched plans for such a television set over a year ago. Munster was well-known to tout beliefs that the Cupertino company would be launching an Apple television set in the near future, rumors that were reignited largely in part due to a direct quote from Steve Jobs in Walter Isaacson's biography of the Apple CEO. The analyst began predicting a 2012-2013 launch year for the product in 2011, with the circulation of other news and rumors that year, and in the intervening years, helping to propel the alleged Apple-branded TV set forward. The latest prediction came just last December, with Munster estimating the TV set would cost around $1500 with a launch sometime in 2016. Today, the Piper Jaffray analyst notes that while the news confirms Apple was at one point working on a television set, the firm was in fact wrong in its "constant expectation of the product." Munster notes that the firm was also wrong about the reason for delay, and now cancellation, of the project, having less to do with basic content and more with the lack of specific untapped features in the crowded TV set market. "We have been talking about an Apple television for the better part of the last decade. While it is a small consolation that the article affirms that Apple was actually working on a

Teen Interest in Apple Watch Drops Ahead of Launch, iPhone Remains Popular

Apple Watch demand among U.S. teens remains relatively low even as the device's launch approaches, according to Piper Jaffray analyst Gene Munster's latest semiannual teen survey, which asked approximately 6,200 teens in the United States about their device usage habits and future buying plans. Only 11 percent of teenagers surveyed plan on purchasing an Apple Watch, down from 16 percent in the fall survey. Of those 11 percent, the top reason teens cited for wanting an Apple Watch was style, followed by design. Only five percent of teens currently own a smart watch. We believe the lower purchase intent reflects a wait and see approach to the Watch as it seems unclear what will be the "killer app" for the Watch. We expect teens to be a good market for the Apple Watch given the popularity of the iPhone, but believe it will take time for influencers (celebrities) to make the watch popular among teens.Though teens don't yet seem to be interested in the Apple Watch, the iPhone and the iPad remain the most popular smartphone and tablet among teenagers. 66 percent of teenagers surveyed owned an iPhone, down slightly from 67 percent in the fall survey, while 64 percent owned an iPad, compared to 66 percent in fall of 2014. 72 percent of teens expect their next smartphone purchase will be an iPhone, while 60 percent expect their next tablet to be an iPad. Comparatively, interest in smartphones and tablets from other companies remains low. 21 percent of teens expect their next smartphone purchase to be an Android, and 16 percent plan to buy an Android tablet. Interest in

Apple Reportedly Has Small Team Working on Augmented Reality Projects

Piper Jaffray analyst Gene Munster claims in a note to investors that Apple has a small team working in and exploring the augmented reality field. Munster believes that while augmented reality is still a decade away from broader consumer adoption, Apple is preparing for the next evolution in computing and will be able to offer fashionable wearables that people will actually want to wear."While it is limited, we believe Apple has a small team of engineers exploring augmented reality applications. We believe that at the core, the group is likely trying to understand a wearable interface that design would ultimately make fashionable/socially acceptable. At this point, we believe it is difficult to determine if or when these experiments might yield a product."Google Glass is perhaps the most notable example of a wearable that, while revolutionary in many aspects, created some uncomfortable situations for those wearing the device in public. Glass Explorer Edition was quick to be banned from several public establishments, including movie theaters, casinos, restaurants, hospitals, sports venues, schools, banks and more due to its ability to discreetly take photos and record videos. Munster remains skeptical about whether Apple's focus on augmented reality will result in a future product, as it is common for the company to research and develop new products and technologies that are never released to the public. Munster also has a less than impressive track record at divulging Apple's upcoming plans, so his predictions should be treated with a proverbial grain of salt. Apple

Gene Munster Still Believes in the Apple Television Set, Thinks 2016 Launch Likely

After numerous failed attempts at predicting Apple's first foray into television sets, Piper Jaffray analyst Gene Munster has not yet given up hope that the company will deliver. During an interview at Business Insider's 2014 Ignition Conference earlier this month, Munster made yet another prediction on the rumored Apple technology, citing a two-year wait for Apple's own television set. Munster regarded this year's prediction as an "annual penance" for being consistently incorrect in guessing the release date for Apple's rumored television set. Instead of the usual one-year prediction Munster has been throwing out the past few years, the analyst looked into the past to further support his two-year suggestion for Apple's next big product. "Apple takes a long time in-between products. If we look back over the last decade, it's 3-6 years between major products. And so, ultimately the Watch is what hit this year, they're gonna refine that next year along with payments. And then that probably gets us into 2016 as more of a time frame for the actual television." Though it may seem a bit behind the game for Apple to launch a television set when connected TVs are already becoming ubiquitous and prices continue to decline, Munster looks at the lack of innovation and the true potential of Apple entering the market as significant positives for the company. "So far the connected TV market really hasn't done much, they sell a lot of units but people don't really use the connected TV part unless they're accessing Netflix. So the concept of what the opportunity can really hold

U.S. Customers Unsurprisingly Delaying New iPhone Purchases as iPhone 6 Launch Nears

A study from Piper Jaffray analyst Gene Munster unsurprisingly shows that interest in the iPhone is waning as the current lineup ages and users are increasingly looking toward an expected fall launch for the iPhone 6. The survey asked 1,016 U.S. consumers about their plans to buy a new smartphone in the next three months. According to Munster, only 34 percent of surveyed consumers plan to buy an iPhone in the coming months, down from the 50 percent reported shortly after the iPhone 5s and iPhone 5c launch in September of last year. While interest in the iPhone wanes, consumer attention towards Android has increased as the balance shifts toward the newest handsets. Leading Android vendor Samsung introduced its latest flagship Galaxy S5 handset in February ahead of a launch last month. This declining interest in the iPhone is not surprising, given the cyclic nature of product launches. With the iPhone midway in its product cycle, consumers may be delaying their purchase of a new iPhone due to rumors that suggest Apple's iPhone 6 is likely to arrive this fall. The effect of rumors on a consumer's purchasing decision is nothing new -- Apple CFO Peter Oppenheimer blamed rumors for declining iPhone sales in the months preceding the launch of the iPhone 4S. The iPhone 6 also appears set to bring a larger than normal upgrade spike as the device moves to a significantly larger display. Even with U.S. customers delaying their purchases, Piper Jaffray still sees reason for optimism with continued strong international sales and even U.S. planned purchase rates remaining as

Mac Sales Remain Flat in July, 5% Year Over Year Drop Expected for September Quarter

Apple's Mac sales continue to come in flat year over year, according to a new report from Piper Jaffray analyst Gene Munster who looked at July data from market research firm NPD. Based on the data, he maintains his outlook of a 5% year over year drop in Mac sales for the September quarter and continues to note that Mac sales are becoming less significant in light of iPhone and iPad sales, representing just 15% of Apple's total revenue. As with his previous reports, Munster notes that it remains difficult to extrapolate NPD data to Apple's global sales performance, but he views the July data as “neutral to slight positive,” down from slightly negative in a June report.Overall, we believe this July data point is likely a neutral to slight positive given that Macs should have a slight tailwind from updated Macbooks in June. We remain comfortable with our down 5% y/y estimate for Macs in the September quarter.As for iPods, Munster's analysis of NPD data suggests that units are down 41% year over year on a global basis and that iPods will remain down 20% year over year for the September quarter. Because iPods now represent just 2% of all Apple’s revenue, the overall impact of this sales decline is

Analyst Predicts No Siri on iPhone 5C, Fingerprint Scanner Solely for Device Unlocking on iPhone 5S

Piper Jaffray analyst Gene Munster late yesterday released a new research note to investors centered around Apple’s upcoming product launches for the rest of the year, including key predictions on the anticipated low-cost iPhone, potentially named the iPhone 5C. In his note, Munster predicts that the iPhone 5C will not come with Siri, the intelligent personal assistant within iOS, and that the device will replace the iPhone 4S at the bottom of the iPhone lineup. Munster also believes that the lower-cost iPhone will sell for an estimated $300 off-contract.In terms of the phone itself, we expect the cheaper phone to have a plastic casing, 4" display, and lower end internal specs (processor, camera, memory, etc.) than the 5S/5 line up. Additionally, we believe that Apple may exclude some software features, such as Siri, which we note was not an option on the iPhone 3GS or iPhone 4 upon launch. Munster apparently believes that omitting Siri from the iPhone 5C would help differentiate the lineup enough to limit cannibalization of Apple's more expensive iPhones by the cheaper 5C model. It would, however, seem to be an odd move given Apple's efforts to promote Siri and other voice functionality, as well as the fact that the cheaper iPhone 4S currently on the market already supports Siri. The analyst also makes remarks on the iPhone 5S, stating that the phone will indeed incorporate a fingerprint sensor into the home button, but that the feature would be limited to user authentication.We expect the iPhone 5S to include a fingerprint sensor with a basic unlocking feature,

Analyst Predicts New iPhone 5S in June, Low-Cost iPhone in September

Piper Jaffray analyst Gene Munster has something of a mixed track record predicting Apple product releases, having expected an Apple television set for several years now. Regardless, in a research note today, Munster predicted an iPhone 5S will be released in June, and a low-cost iPhone in September.He believes the 5S will have incremental upgrades with a faster processor, better camera, and "an outside chance" that the device will gain an NFC chip as part of a digital wallet initiative. He also notes that some kind of biometric security feature is a possibility, but believes that is more likely in a future iPhone 6. Regarding the lower-cost iPhone, Munster writes:We continue to believe Apple will have a cheaper phone product to address the emerging markets. In recent public comments, Tim Cook noted that the original iPod cost $399 and eventually the company released a $49 iPod Shuffle which addressed a broader market. We believe Apple will likely introduce a cheaper device in the September quarter.Earlier this year, KGI Securities analyst Ming-Chi Kuo -- who has a very good track record in recent years -- also predicted an iPhone 5S in June or July, with a lower-cost iPhone around the same

Apple to Target Emerging Markets with Low-Cost Phone to Launch in September at $199?

Piper Jaffray analyst Gene Munster late yesterday issued a new research note using average low-end smartphone pricing in emerging markets to argue that Apple's rumored lower-cost iPhone will launch in September with a price tag of around $199 unlocked. Munster examined smartphone pricing on 15 different models across six international markets (Germany, UK, France, China, Brazil and India) to find that lower-end smartphones average slightly over $200 unsubsidized. In China and India, the average prices are $138 and $140 respectively, while Apple's cheapest existing phone, the iPhone 4, averages over $500.We believe the last finding demonstrates that the biggest pricing gap for iPhone exists between the cheapest iPhone and the average low-end smartphone. This low- end segment is important given we estimate it is a $135B market in 2013 that Apple is currently not participating in (60% of smartphones, or 540m units at a $250 ASP).Munster predicts Apple will announce its low-cost handset in September, and estimates that a $199 price tag would generate sales of 37 million phones in the rest of 2013, 96 million in 2014 and 170 million in 2015. While an iPhone at that price would carry much lower profit margins for Apple, Munster believes that the opportunity is so significant given the size of the potential market that Apple will be willing to focus on gross profit through volume rather than margins. While rumors of a lower-cost iPhone have been picking up steam in recent months, a price point as low as $199 would seem to be overly aggressive for the company given its

Apple Reportedly Investigating Television Set Components as Anticipation Builds

Piper Jaffray analyst Gene Munster, whose long-standing claims of an Apple television set have been gaining steam in recent months as new rumors have surfaced in support of the idea, issued a research note late yesterday (via AppleInsider) discussing some new developments with Apple's work. Specifically, Munster notes that he had recent discussion with a "major TV component supplier" which disclosed that Apple had contacted the company to inquire about their products. The disclosure adds another data point to rumors from Asian supply chains that Apple has been working on a television set. The relevant portion of Munster's report is quoted by Barron's:In Jan-12 we spoke with a major TV component supplier who has been contacted by Apple regarding various capabilities of their television display components. We see this as continued evidence that Apple is exploring production of a television. This latest data point follows Jan-11 meetings in Asia that led us to believe Apple was investing in manufacturing facilities for LCD displays ranging from 3.5″ mobile displays to 50″ television displays. In Sept-11 we met with a contact close to an Asian supplier who indicated that prototypes of an Apple Television are in the works. We believe TV hardware could be ready for a late CY12 launch, but the timeline and scope of a revamped content solution is more uncertain.Observers have been looking for Apple's next major product line even as the iPad and iPhone experience booming sales and the Mac continues its resurgence with long-standing steady growth easily outpacing that of the

Speculation on Apple's Television Set: Range of Sizes, Device Integration, Premium Pricing

Piper Jaffray analyst Gene Munster has long been one of the strongest advocates for an Apple-branded television set, and with increasing claims of just such a product pointing to a launch as soon as the second half of next year, it seems that his persistent confidence in the idea may be panning out. Keeping in mind that Munster does not have specific knowledge of Apple's ultimate plans for its television sets, he does have ideas about what he thinks Apple will do with the product. Business Insider reports that he shared some of those ideas at a conference this morning, going as far as to recommend that anyone thinking of buying a TV wait until Apple shows its hand. Among Munster's predictions: - Full-fledged television set. Given that Apple seeks to streamline the user experience and its recognition that users don't really want yet another set-top box, Apple will almost certainly be going for an all-in-one solution. But given that Apple does not currently offer a full suite of television content offerings, most users will likely not be able to cut ties to their cable or satellite providers. Apple's TV will instead serve as an advanced interface that still draws upon the standard signal coming in from a cable box. - Range of sizes and twice current pricing. Munster believes that Apple will introduce its television in a range of sizes, recognizing that customers have different needs. He also believes that Apple will price its television at approximately twice the prevailing market price of similarly-sized televisions. The price premium would cover the

Analysts Dispute Supply Chain Conclusions of iPad Production Cuts

Earlier today, a report from JPMorgan analysts made headlines for its claim that Apple has slashed its fourth quarter iPad production plans by 25%, sparking speculation and rumors that Apple may be planning a price cut amid weakening demand. The Wall Street Journal notes, however, that several analysts have already spoken out against the conclusion, arguing that a single supply chain data point is insufficient to warrant such drastic production cut predictions. From Piper Jaffray analyst Gene Munster:We also note that previous calls based on sell-in or supply chain data have, for the most part, proven to have very little correlation with Apple’s results vs. consensus dating back to early iPod shipments (2003). We believe Apple purposely maintains enough suppliers and manufacturing partners to make any one supply-side data point inconclusive.Analysts also note that Apple appears to have actually accelerated production and bumped up third quarter orders to stockpile iPads heading into the holiday shopping season. Sources also indicate that Apple is likely to begin production of the iPad 3 at the end of the fourth quarter or early in 2012 and may be accelerating production now in order to ease that transition. Apple struggled with the transition from iPad to iPad 2 production earlier this year, with weak sales coming in the first quarter of this year as Apple scaled down production of the original iPad and was unable to meet heavy initial demand for the iPad 2. From Susquehanna analyst Chris Caso:We believe chatter regarding iPad production cuts are misleading –

Multiple Sources Suggest Apple Working on Television for as Early as 2012

Rumors of an Apple-branded television set were revived earlier this year by a former Apple executive, and we've long seen similar claims in the past. The frequency of these rumors, however, seems to be increasing, now with Venturebeat pointing to multiple sources suggesting the same. Venture capitalist Stewart Alsop who sits on the board of Sonos and was an early investor in TiVo told the site that "he has heard multiple sources throughout Silicon Valley that the Apple television project is underway." Piper Jaffray analyst Gene Munster also cites component suppliers as well as an internal Apple source to suggest the same -- that Apple is planning on launching a television in the 2012/2013 timeframe. Munster isn't the only analyst who has predicted an Apple television, and we've heard whispers from others. It seems that momentum is picking up for rumors that Apple is heading into the television marketplace. Yet as recently as 2010, now Apple CEO Tim Cook had said that Apple had no interest in the TV market, but did feel there is "something there" to the Apple TV, Apple's $99 set-top-box. Later that year, Steve Jobs had also outlined the challenges of infiltrating the television industry. Jobs, of course, had also denied that Apple had any interest in producing an Apple cell phone back in 2003, four years prior to the launch of the original

iOS App Store Booming: Per-Device Downloads and Average Sales Price Increasing

Fortune reports on a new note from Piper Jaffray analyst Gene Munster, who for some time has been keeping tabs on the performance of Apple's App Store using calculations of download rates and other metrics against number of devices sold. According to Munster, iOS device owners are increasing their usage of the App Store in 2011, downloading more apps as the average sales price for paid apps has rebounded after dropping last year.- More apps: The average iOS device owner will download 83 apps in 2011 vs. 51 in 2010, a 61% increase year over year. "Smartphone users are showing an increasing appetite to use apps to add features to their phones," Munster writes, "and iOS has the leading app ecosystem." - More expensive apps: The ASP (average selling price) per app is rebounding. ASPs are up 14% y/y in 20111 vs. an 18% decline in 2010. "After the initial race to the bottom in App Store pricing," says Munster, "we are seeing users pay up to add features and games to their iOS devices."Munster reports that 82% of App Store activity is from free apps, while the 18% of downloads that are paid apps carry an average selling price of $1.44. Munster notes that the recent increase in average selling price seems to be driven by the iPad, which in general sees higher average app prices than the iPhone and iPod touch. Apple last week announced that the App Store had reached 15 billion downloads since its inception three years ago. Still, App Store revenue represents only about 1% of Apple's overall revenue and is viewed primarily as a driver of Apple's hardware