iTunes makes $570m; Austria iPhone date; Japan iPod investigation
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Apple's iTunes media store drew in more than half a billion dollars across 2007 and is a small profit machine for Disney, say new estimates. Also, Austria may learn deals of its iPhone launch this week, and Japan is investigating an iPod nano breakdown.
Although Apple has often maintained that the iTunes Store is a vehicle for sales of the iPod rather than a source of profit, the company may have earned $570 million for 2007 alone, according to calculations by the music chart keeper Billboard.
Using as a yardstick Apple's recent revelation that it had sold four billion songs since the store opened in April 2003, the publication estimates that Apple sold about 1.7 billion tracks last year. This amounts to more than just $1.7 billion, however: as stores in Europe and elsewhere often charge more than 99 US cents per track, Apple is more likely to collect $1.9 billion.
After factoring in Apple's roughly 30 percent direct earnings from every song sold, this leaves the Cupertino, Calif.-based company with about $570 million of its own versus the 70 percent left to the labels.
The income doesn't translate to a similar amount in pure profit for iTunes, however. Apple has explained in the past that its portion of the song price is largely used by bandwidth and maintenance costs, though the company has never broken down its revenues in public statements.
Analyst: Disney earns $123 million in iTunes sales since debut
As unclear as Apple's revenue stream may be, its close partner Disney has been making a small but tangible profit on videos from iTunes, estimates by Pali Research show.
Studio chief Bob Iger's claims to have sold between four million movies and 40 to 50 million total videos since movies became available from iTunes in fall 2006. If taken literally, Disney has earned about $122.8 million after casting aside Apple's portion of each purchase, Pali analyst Rich Greenfield says.
The number is just a small fraction of Disney's total $35 billion in sales for 2007 alone, but is easily sustainable. Without the normal marketing and manufacturing costs associated with feature films and DVDs, virtually all of the income is considered a supplement to Disney's core movie-making business rather than an essential focus.
Newspaper claims iPhone Austria announcement by Friday
Austrians will hear of plans for the iPhone's launch at the same time as the Irish launch, according to a report in the national newspaper Der Standard.
The publication refers to anonymous industry sources who claim that T-Mobile Austria will sell 8GB and 16GB iPhones at the same prices of 399 and 499 Euros as for French, German, and Irish offerings. Like most iPhone subscriptions, owners will be tied to a two-year contract and will pay between 50 and 60 Euros a month.
T-Mobile has not confirmed the dates, though chief Hamid Akhavan pledged a release in the first half of 2008.
Japanese officials to investigate iPod nano sparks
An incident with a first-generation iPod nano has triggered an inquiry into the safety of the player by the Japanese Ministry of Economy, Trade and Industry.
The player reportedly shot sparks while it was being recharged, prompting concerns that other users may have encountered the same problem. No one has been injured, though Apple reported the issue to Japanese officials late last week.
Roughly 420,000 of the iPods were sold in Japan between 2005 and 2006. Later second- and third-generation iPod nanos aren't part of the current investigation.