Thursday, February 25, 2010
Apple Plans "Big, Bold" Steps, Says Jobs
Whatever else might be said, Apple already has reinvented itself. Apple used to be thought of as a "computer manufacturer." These days, sales of Macintosh computers probably represent about 18 percent of the company's equity value. The iPod, which not so long ago was the rising company star, now represents about three percent of the company's value.
Even the new iPad, which has just launched, represents four percent of the company's value.
These days, Apple has suddenly, dramatically, become a "mobile handset" company. Sales of the iPhone now represent about 52 percent of the company's equity value.
The iTunes and iPhone App Store represent about 5.6 percent of company equity value.
So what about Apple's purchase of Quattro, a company providing mobile advertising for Apple, Android and other smartphone devices?
Apple probably is less interested in profiting from ads than in making the iPhone the most attractive device for developers to build applications. And money might have a lot to do with that. Right now, eighty to ninely percent of app store downloads are of "free" apps. That isn't such a great business model for a software developer.
Eighty percent of the three billion downloads from Apple’s App Store are free, for example. By offering a way to sell ads, Apple can help entice developers who will have another way to make money, other than selling software.
Apple executives said recently during their quarterly earnings call that the firm had no idea whether mobile advertising would develop as an actual revenue stream for Apple or whether it would simply help reinforce its App Store operations.
"I honestly don’t know," says Peter Oppenheimer Apple CFO. "We will have to see."
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