Apple 2.0

Covering the business that Steve Jobs built

How the App Store got to 1 billion downloads

April 23, 2009: 5:28 PM ET

1 billion celebrationThe App Store odometer that's been running on Apple's (AAPL) home page for nearly two weeks rolled over into 10-digits Thursday afternoon shortly before 5 p.m. ET (2 p.m. PT).

To hit a billion downloads in 9 months and 12 days is certainly a milestone worth trumpeting, and Apple's executives did their share of horn-blowing during Wednesday's quarterly conference call.

"We are within hours of reaching our 1 billionth download," said CFO Peter Oppenheimer. (It turned out to be nearly 24 hours, but who's counting?). "[It's] an astounding number given the short nine-month history of the App Store."

999999999One of the factors feeding that growth, and in turn being fed by it, is the size of the App Store's installed base. COO Tim Cook put it at 37 million -- a fact, by the way, that gives analysts a fresh handle on the number of iPod touches in circulation. (Because Apple has reported sales of 21.17 million iPhones over the past 7 quarters, we now know that it has also sold at least 15.83 million iPod touches.)

The other factor is the quality and sheer quantity of applications in the store -- more than 35,000 according to Apple (and 37,462 according to 148Apps, which keeps an independent running count). Developers clearly find a lot to like in this platform: a big installed base, a comfortable development environment, and a friction-free payment system whereby Apple handles all the back-office drudgery for a 30/70 revenue split.

How long can this breakneck growth continue? Although the rate at which new apps are being added to the store has started to slow, the rate of downloads is still accelerating -- as evidenced by the slopes of the curves in the fever charts below.

1billion apps

But all this could change in the next quarter. The new software development kit (SDK) and the new operating system -- iPhone OS 3.0 -- coming this summer could launch a new generation of more powerful apps. And if the rumors are true and the company has a new family of App Store-ready portable devices in the works, the flow of new applications could accelerate once again.

Apple may not be "years" ahead of Google (GOOG), Microsoft (MSFT), Nokia (NOK) and Research in Motion (RIMM), as Cook and Oppenheimer claimed at least four times Wednesday. But it is certainly many many months.

UPDATE: Apple issued a press release Friday and announced the grand prize winner of its one billion app countdown contest: Connor Mulcahey, 13, of Weston, CT.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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