Apple has suggested the App Store is just above break even [1]. I personally find this believable. I download at least 15 free apps for every paid app. It might

Apple has suggested the App Store is just above break even [1]. I personally find this believable. I download at least 15 free apps for every paid app. It might even be worse. Approving, hosting, and marketing all those free apps comes at a cost that adds up. By contrast Apple likes to mark up hardware at 100% over bill of materials. That is to say if $300 worth of components goes into an iPhone, Apples wants to sell it for at least $600. The major exception to this is the iPad which Apple takes less to keep pressure on the competition. Regarding iAds, I believe iAds was suppose to have sold around $65 million worth of ads for the initial launch. The revenue from that being split between Apple and the app maker. This is a tiny drop in the bucket. And there are reports Apple is having a hard time getting advertisers to renew. [2] [1] http://www.macobserver.com/tmo/article/apple_app_store_runs_just_above_break_even/ http://www.macobserver.com/tmo/article/apple_app_store_runs_... [2] http://www.macrumors.com/2011/02/10/apples-iad-program-struggling-to-fill-slots-and-renew-advertisers/ http://www.macrumors.com/2011/02/10/apples-iad-program-strug...