iPhone App Store Downloads Worth Less Than One BillioniPhone App Store Downloads Worth Less Than One Billion

Ever since investment banking analyst Gene Munster predicted that Apple's iPhone App Store could become a $1.2 billion business by 2009, the Apple universe has been wondering if and when that revenue number would be reached.

Not for a long time -- a very long time, according to venture capitalist Jeremy Liew of Lightspeed Venture Partners. In a recent analysis, Liew came to the conclusion that Apple so far has made less than $45 million from the more than 1 billion downloads that have been made by iPhone users.

That's still a pretty impressive number, and there's the issue of collateral benefits for Apple -- namely, the number of iPhones and iPods the App Store helps sell.

"About a month ago Apple announced that 1 billion iPhone apps have been downloaded in the first nine months," Liew wrote in a note this week. "That's an amazing number." Liew set about analyzing the statistics in a survey conducted by publisher O'Reilly, which found a mean price of $2.65 for paid iPhone apps.

Liew then calculated the cumulative revenue from paid iPhone apps at between $70 million and $160 million. With Apple collecting some 30% of that, the final amount accruing to Apple was likely between $20 million and $45 million.

"Given that Apple sold 13.7 million iPhones in 2008 the App Store is not a meaningful direct contributor to their overall revenue," Liew added. "Much like iTunes, Apple is using the App Store to drive demand for their hardware."

Liew's numbers don't mean that Piper Jaffray analyst Munster was necessarily off base, because his $1.2 billion prediction was at the high end of different scenarios, some of which predicted much lower more reasonable numbers for iPhone download revenue.

Looked at from any vantage point, the App Store has been a phenomenal success.

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