01Jan2010

Apple to hit $2B in App Store gross revenue in 2011?

Financial giant Citibank has released its US Internet Stock 2011 Playbook, and inside there is good news for Apple and holders of AAPL stock: the banking giant estimates that the company’s App Store sales will grow to $2 billion in annual gross revenue in 2011, says Boy Genius Report.

In June at the Worldwide Developer’s Conference, Apple CEO Steve Jobs announced that the company had already paid developers over $1 billion since the store’s opening two years earlier. While total cumulative sales are likely to have surpassed $2 billion by the end of 2010, Citibank’s forecast represent a significant estimated growth rate for the store.

Credit for the growth is given to the rapidly-expanding smartphone market, which grew 53 percent in 2010, according to the same report. While smartphones will continue to grow in 2011, Citibanks estimates a more modest growth of 29 percent. Apple, with the largest, most diverse and most popular of the mobile app stores, will continue to benefit from the growth — a market business analysts Gartner say will be worth $27 billion (including all competitors) by 2013.

Apple presently takes a 30 percent cut from all app sales at the App Store, though it does not charge any fee to host free apps. While the store’s profitability has been low — about one percent of Apple’s annual gross revenue — it is seen by the company as a vehicle to drive hardware sales and increase value, similar to the iTunes Store, and has seen similar growth and popularity. [via BGR]

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