Apple released it's financial  results and held a conference call for investors yesterday, you can see a liveblog of the call here. The most interesting bits of information overall are:

Total revenue for Q3: $7.46 billion

Total profits for Q3: $1.07 billion

Mac sales for Q3: 2.496 million (including laptops and desktops), 41% up from last year.

iPhone 3G sold 1 million devices in 3 days, the first iPhone took 74 days to achieve the same.

Apple is forecasting 10 million iPhone 3G's sold in 2008, and they are aiming to sell it in over 70 countries by the end of the year.

There are about 900 applications in the App Store, total downloads already over 25 million.

Apple also hinted that there is "a significant product transition" coming during the next quarter, though nobody knows what it will be.

Now, since we are on a gaming site, some additional information. It seems that the top paid apps are quite universally games, with SEGA's Super Monkey Ball, Apple's Texas Hold'em and Vivendi's Crash Bandicoot Nitro Kart 3D being perhaps the overall top 3 (there is no single worldwide top list that I could find, but I might at some point compile the top lists from all countries). There's no information on how the 25 million downloads are distributed between free and paid apps, but we do know that 20% of the 900 apps are free, and 90% are under $10. Most likely the free apps are overpresented in the downloads by quite a margin, but if we assume that Super Monkey Ball has only managed to capture a promille of the downloads, that would mean 25 000 copies in 10 days at $9.99/€7.99 each. For simplicity's sake, let's assume a fixed price of $10, Apple takes 30% of that to cover their expenses, leaving SEGA with .7*10*25 000 = 175 000 dollars. I know this is all pure speculation, but it does seem like companies can make money out of iPhone games. I don't think it cost SEGA that much to make Super Monkey Ball for the iPhone in the first place, and it has a lot of time to sell still.

Also, when asked if Apple plans to profit much from the App Store they said that while it will generate revenues, just as iTunes store makes iPods more attractive, they're hoping the App Store will make iPhones and iPod touches more attractive. I don't expect iPhone and App Store to directly compete with DS or PSP, but I'm very optimistic that they will expand the gaming market. As with iTunes, buying applications from the store is about as easy as it can be: a couple of clicks to find and select the app, enter your password, and the app downloads and installs itself on your iPhone. That's all and you're ready to go.

I think, as I've said earlier, that Apple is going to change the software marketplace. Disrupt it, if you will, although I can't see how the App Store would be worse than traditional retail channels. Yeah, you can't redownload your purchases (AFAIK), so you need to maintain backups, but to me that's hardly a downside, especially considering it's a phone. Anyway, it seems clear that the App Store is already a huge success, 25 million downloads in about two weeks proves that. If their forecast comes true, they will more than double their current installed base by the end of the year, and who knows how many downloads they will have then. Do you think this will force some kind of response from Nintendo/Sony, or will they be content with their current model of distribution?

The question is how much legs does this initial sell-through have. After a while, the sales will plateau. I feel that they will stablize at a low number.

The reason is that there appears to me that there is great competition for this type of phone (I see LG Dare ads from Verizon as I type this). So phone gaming is probably going to remain separate from regular gaming.

Also, the price point (unit plus two-year contract) will prevent people from buying this as a gaming device. After all, did Palms/PDAs kill portable gaming? iPhones are going to the same basic crowd.

Mike from Morgantown

Well, I did say I don't think the iPhone is in direct competition with DS/PSP. But the thing that iPhone has against the competition is the software: the iPhone OS and the App Store and everything in it. It is certain iPhone won't kill portable gaming, but it MIGHT bring games to a new crowd.

About the software sales plateuing: Apple is planning to sell 10 million phones by the end of the year, that's about 1.5 - 2 million phones each month, and the people who buy those phones are going to buy software, too. I don't know what is the installed base of iPhone OS 2.0 currently, but since there were 6.124 million iPhones sold by the end of Q3, and by all accounts a significant number of those were jailbroken, I'd say it's 6 - 8 million. That works out to 3 - 4 apps per device, and if the same kind of attach rate continues, the total software sales should be at least 48 - 64 million by the end of year. That's assuming that the current owners stop bying. Sure, the sales will be lower than the first days, but as the installed base grows, I believe the software sales will follow.

Just thought I'd point out that the App store sells to iPod Touch owners as well as iPhone owners, unless I'm mistaken. So your software attach rates get even more complicated. How many Touches have sold? How many have the right system software? It costs $10 last I heard, is that counted among the paid App Store downloads?

I've gotta hand it to Apple, I don't think many people expected the iPhone to perform like this.

Interesting but why wont Apple release some sales numbers ? That would be interesting :)

That's a good point, though I don't have any information about the number of iPod Touches upgraded to the 2.0 OS. I myself have both the iPhone 3G and an iPod Touch which I'll give to my wife now, but since the Touch only has Wi-Fi and no GPS, camera, speakers or built-in mic, a lot of the cool apps won't be so cool on it. So I expect the overwhelming majority of the apps to be made solely for the iPhone, and that whould be reflected on the sales as well. But then again, for games the connectivity and other stuff is not that important, so maybe the Touch owners will want them and upgrade in numbers, who knows. Anyway, since the upgrade is not free, and has been available for so little time, I don't think the attach rates are that much off for now anyway.

@hunter_alien

I think Apple has always been quite secretive about their exact sales numbers by platform, and I believe the App Store contract prohibits 3rd parties from disclosing actual sales numbers, too. On the other hand, in the App Store on my iPhone, on each individual App Page, there is a title called "Popularity" or something like that, I see it in Finnish, which currently reads "0 downloads" for each App. So I wonder if Apple is going to publish that information at some point.

>Total revenue for Q3: $7.46 billion

>Total profits for Q3: $1.07 billion


that's some ridiculous profit margin right there. Looks like someone's paying way too much for their IPhone.

Could be ;) But of course that figure includes loads of other things besides iPhone. And given that Apple sells both hardware and software, a profit margin of 14.3% is quite good but not spectacular.

 Oh, Kinofwale, your stubborn refusal to accept the notion of value as distinct from cost is cartoonish and endearing.