The “iWork” apps are already on track to potentially generate more than $40 million in annual sales, according to our analysis of App Store sales so far.
And in the first month, they’ve probably already passed $3 million in sales, likely making Apple the most successful iPad developer, by revenue, so far.
Yes, $40 million is obviously a tiny number in the context of Apple’s overall iPad revenue, which could top $1 billion just this quarter.
But it shows there is a real appetite for serious apps on the iPad, a device that many have shrugged off as a toy. It also suggests that Microsoft and Google may want to make sure their office suites — whether Web-based or apps — work well on the iPad.
How’d we get that $40+ million estimate?
Apple’s apps have consistently been in the top 10 for paid apps since the iPad was released. Pages has been no. 1 for much of the time. All three have led the top-grossing listings as well.
So, we did some back-of-the-envelope maths:
- In a typical week… 7,500 downloads per app x 2 weekend days, and 2,500 downloads per app x 5 weekdays, = about 27,500 weekly unit downloads per app.
- We multiplied that by the number of apps — three — and the $10 per app Apple charges, and get about $825,000 per week. (We are assuming that the three apps are roughly selling the same number of units, even though surely the top-ranked app of the three is selling more units than the third-ranked app.)
At an annualized rate, that’s about $43 million. So, say $40+ million.
This obviously includes some significant assumptions: That the rate of iPad purchases and iWork app purchases remain the same. And this doesn’t take seasonality, international expansion, international pricing, exchange rates, price adjustments, or competition from other office apps/sites into account.
Again, we’re even assuming that the most popular app, Pages, sells the same number of copies as the lower-ranked apps, Numbers and Keynote, which obviously isn’t the case. (They’re probably not tremendously far apart, though.)
It’s merely intended to be a very rough estimate.
That said, if Apple really can achieve $40+ million in annual iWork-for-iPad sales, that’s great. For context, Google only generates about $50 million annually from its office apps across the entire world, not just on one gadget. (Meanwhile, Microsoft’s Office cash cow generated $4 billion of revenue and $2.6 billion of PROFIT last quarter.)