Report: iTunes costs Apple $1.3 billion a year to run

In an analysis, market research firm Asymco estimates that it costs Apple $1.3 billion a year to maintain iTunes and the App Store.

Lance Whitney/CNET

Apple spends approximately $1.3 billion per year, or $113 million each month, to run iTunes and its App Store, according to data compiled by Horace Dediu of market research firm Asymco.

Analyzing numbers provided at Apple's Worldwide Developers Conference last week, Dediu factored in the average price of songs and apps, the split between the company and its developers, and word from Apple that it runs the store at or slightly above the breakeven point.

Much of the money that Apple spends on the store goes toward serving content and payment processing as well as support. But Dediu said he believes the company still has a lot left over to invest in increasing capacity, including the new data center that recently popped up in North Carolina.

Other analysts have pointed out that the App Store has never been a huge profit source for Apple. In a report issued about a year ago , Piper Jaffray analyst Gene Munster confirmed that Apple just more than slightly breaks even on the App Store. At the time, Munster calculated that the store has added only around $189 million to Apple's total gross profit since its launch.

About the author

Journalist, software trainer, and Web developer Lance Whitney writes columns and reviews for CNET, Computer Shopper, Microsoft TechNet, and other technology sites. His first book, "Windows 8 Five Minutes at a Time," was published by Wiley & Sons in November 2012.


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