Apple claims 500M app downloads from iTunes Store

By Mickey Alam Khan

January 19, 2009

Apple ad in The New York Times. Photo credit: Silicon Alley Insider

If Procter & Gamble Co.'s Gillette brand generates revenue not just from the sales of its razors but its blades, then Apple Inc. surely has a winner on its hands with the iPhone and iPod.

The computer and mobile phone maker took out an advertisement Friday, Jan. 16 in The New York Times' business section to thump its chest: 500 million application downloads from its Apple iTunes Store.

The record is impressive. It was only Dec. 5 when Apple said iPhone and iPod users had downloaded 300 million apps from the iTunes Store.

The holidays played a major role in the download of these apps, some free and some paid.

Add to that the increased number of iPhones and iPods bought from Dec. 5 through last week.

Apple's iPod touch is a hit

But what these numbers prove is the rapid acceptance of the iPhone and iPod as a device to access content on mobile.

Such rapid growth also emboldens third-party developers to create apps for the iPhone and iPod, thus increasing their market share of the burgeoning smartphone market.

Appy days
According to Apple, it took 61 days for the company to record 100 million app downloads and 43 days to climb to 200 million.

Apple is betting that in-app advertising will continue to grow in profitability

Forty-three days later, the number of apps downloaded from the iTunes Store was 300 million.

The recent milestone ad was taken out in the midst of negative media coverage following Apple CEO Steve Jobs' move to take a sabbatical from the company.

A week after his first letter on the subject, Apple Inc. CEO Steve Jobs on Jan. 14 sent a memo to his staff explaining his decision to take a medical leave of absence through the end of June (see story).

In his email, Mr. Jobs blamed both the unwanted attention over his health as well as medical problems for his decision to take a five-month sabbatical from day-to-day Apple operations.

"Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well," Mr. Jobs said in the email. "In addition, during the past week I have learned that my health-related issues are more complex than I originally thought.

"In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June," he said.

Timothy Cook, Apple chief operating officer since 1998, will take over Mr. Jobs' day-to-day responsibilities in the interim period.

Mr. Jobs' departure is not expected to affect iPhone or iPod sales, although his absence at the helm may rob Apple of its mascot.

The rapid downloads of iTunes apps bodes well for the Apple iPhone and iPod, making switching costs harder for consumers looking to migrate to other rival mobile devices.

As of late last week, Apple claimed 15,000 apps on its iTunes Store, up from 10,000 on Dec. 5.

Apple will discuss its first fiscal quarter results in a conference call Jan. 21.