Rishi Khaitan

The Steve Jobs Keynote this morning left most, including many Apple die-hards, wanting a bit more to talk about. The item that caught my attention the most was Steve’s announcement that Apple had sold its 1 billionth song on iTunes. Pretty amazing.

I dug up some fun facts about iTunes:

• “The billionth song Speed of Sound was purchased as part of Coldplay’s X&Y album by Alex Ostrovsky from West Bloomfield, Michigan. As the grand prize winner he will receive a 20-inch iMac, 10 fifth generation iPods (5 white/5 black) and a $10,000 gift card good for any item on the iTunes Music Store. In addition, Apple will establish a scholarship to the world-renowned Juilliard School of Music in his name to commemorate this milestone.” Lucky bastard! (Wikipedia)
• 42 million iPod products have been sold. That’s approximately 25 iTunes downloads per iPod sold.
• At last measure, approximately over 3 million songs sold per day or over 2 thousand songs sold per minute!(Pocket-lint.co.uk)
• In it’s first year, Jobs predicted iTunes would sell 100 million songs. iTunes fell short selling 70 million songs.
• iTunes has 83% of the $1.1 billion online digital music market (Red Herring article)
• It’s estimated that Apple’s profit margin on each song is in the low single digits, or in other words, a few pennies per song sold. Assuming 5%, 1 billion * .05 = $50 million profit since iTunes launch
• Only iPods are compatible with Apple’s DRM. Why? The purpose of iTunes is to sell iPods, not to sell music. The fact that Apple is able to turn a profit on iTunes is all gravy. However, while it’s not really an apples-apples comparison, one could say that the purpose of MacOS is/was to sell Mac hardware….that didn’t work out to well in the long-term.