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Monthly Apple Users

In the postmodern computing world that we live in, the measure of success isn’t revenue or profit or units sold but the number of users that an ecosystem can attract. Therefore the monthly active user (MAU) unit of performance seems to be in vogue right now. E.g.:

  • Facebook claims Messenger has more than 200 million MAUs
  • WhatsApp has 500 million MAUs, 48 million of whom are in India
  • Line last month announced that it had 400 million users (active or not)
  • WeChat claimed 355 million MAUs
  • Viber claims 105 million MAUs

Startups are aggregating these millions of MAUs in order to obtain valuations for raising capital[1] and the faster the growth in MAUs the more “successful” the company is considered.

When companies are acquired it’s common to take the transaction value and divide it by MAUs to get an idea of “what an user is worth”. This is because there are no revenues to measure and MAUs are taken as a proxy. However, the process by which a MAU becomes a dollar of profit is, to put it kindly, circuitous.

For most (all?) it’s not yet clear how it happens especially since not all MAUs are created equal and MAU loyalties can change rapidly and if we added all the projected revenues each MAU will contribute to each app on her device we might reach some absurdity. In actuality, today, for the companies listed above, there are no revenues at all directly from their services.

In violation of this convention, there are some companies which manage to obtain revenues from their users. Two such are Apple and Amazon.  In the last quarter Apple reported having 800 million iTunes accounts.[2]  These aren’t MAUs since the activity level is not noted, but we do know how much is spent on iTunes and services. In addition, Amazon cites 244 million active customer accounts  representing accounts which generated purchases within the last 12 months.

This allows us to compare Apple and Amazon in terms of accounts, revenue per account, and, via some analysis, even profitability per account.

The following graphs tell this story. First, the total number of accounts:

Screen Shot 2014-04-29 at 4-29-11.25.29 AM

Note that I added trend lines to both graphs and their formulas.

The following are the revenue per account for iTunes (further broken into estimated iTunes segment revenues per account.) and for Amazon. Note that the vertical scales are different.

Screen Shot 2014-04-29 at 4-29-12.05.06 PM

This view shows just how different the economic value of users can be. In the case of Apple, it’s growing its user base at (literally) exponential rates. The revenues per user does, understandably, decline. This is because new/later users don’t spend as much as early users. There might be some stability toward the later stages of adoption in revenue per user. The other point about iTunes data is how the mix of revenues has shifted from music to Apps and Services pointing out how users can be migrated across revenue sources over time.

In the case of Amazon it’s growing its user base at a linear rate (note equation). The revenue per account remains very steady however.

Broadly speaking, it would seem logical that the speed of user growth has an effect on the quality of those users. This relationship should guide further thinking about the quality of hundreds of millions of users acquired within a few months.

Apple’s user growth is a function of expanding its device portfolio and distribution. Apple has shown that there are limits this type of growth. Achieving 830 million or so iOS device sales within 7 years is an amazing feat and one can forgive not having achieved billions more since they managed to obtain significant hardware and service/content revenues from most of them and that those who reached higher figures more quickly didn’t manage the same revenue per user.

Amazon’s user growth is a function of expanding its logistics and merchandise mix. This is also not easy to do globally. Arguably, Amazon cannot scale in the exponential rates seen by Apple or the other MAU aggregators because it has to depend on trucks and roads and regulators to complete most of its sales.

I suppose, in conclusion, that there is no “right” or “wrong” business model for a user base. Both Apple and Amazon are doing well in building their customer bases and creating loyalties which will serve them well in the future. However whereas there is no right or wrong revenue structure per user, it seems to me that there ought to be some such structure. In most cases this remains a matter of faith rather than reason.

Notes:
  1. It’s been said that it’s difficult to get funded with only 10 million MAUs []
  2. adding, for some unknown reason, that most of them have credit cards. []
  • ronin48

    Thanks Horace!

    And it looks like iTunes accounts could reach 1 Billion by late 2014 or early 2015.

  • LTMP

    Regarding footnote #2, I would think that the fact that most iTunes users have credit cards is an indication that they are either making purchases or at least readily able to.

    An iTunes account without a credit card could easily be a ‘dead’ account with little or no value.

    • Mark Jones

      Agree it “could easily be” but just wanted to point out that it is doesn’t necessarily have to be. My kids receive so many iTunes cards as gifts (birthday, Christmas, etc) that I removed my credit card from our family iTunes account.

      • LTMP

        A good point. I wonder why AAPL doesn’t just say “with a method of payment”. I’m sure that a significant percentage are in the same boat, and kids are prolific spenders.

      • melci

        It is also pertinent to highlight this fact that a very significant proportion of iTunes accounts are shared family accounts off a single credit card used by both parents as well as the kids so in fact represent even more users than raw iTunes account numbers imply.

        This has a direct bearing on comparisons with FaceBook, WhatsApp and the like where in contrast, virtually every account represents a single individual.

      • neutrino23

        Good point. But consider that some people have more than one account. I have no idea how to resolve this, I’m sure Apple does.

      • melci

        It’s certainly possible some non-zero number of users have multiple iTunes accounts, but I would severely doubt they both would be tied to credit cards in most cases. I would also think that shared family accounts would vastly outnumber these considering the advantages of purchases on the one iTunes account being able to play/run on up to 5 computers/iPods/iOS devices throughout the family.

      • charly

        Up to 5 doesn’t sound so hot when you already have an ibook/ipad/iphone

      • melci

        I wasn’t very clear there. Each Apple ID can have up to 10 devices and computers (combined) associated with it, with a maximum of 5 computers at any time. Sound better? :-)

      • davidnkeng

        A good point, indeed. I just read Ben Thompson’s post on “The Trouble with Payments,” discussing the complications of building a profitable payment system on top of the current credit card based system–iTunes included. He writes about the Octopus Card in Hong Kong as being a prepaid mass transit card that has evolved into a preloaded debit type NFC based card for many retail businesses including transit.

        You can buy iTunes Gift Cards almost everywhere. 800 million people (families?) have iTunes accounts. What if the gift cards were called something else other than “gift” cards.

        In Hong Kong you can recharge your Octopus Card at the checkout counter of a 7-11 store by just asking to add money to your account.

        Might Apple be able to bypass the credit card companies by encouraging purchases using a prepaid balance. They could offer discounts on “gift card” loads to incentivize it. Maybe they could modify the “discount” such that you could achieve a, say, 2% savings on your purchase by linking an ACH transfer from your checking account to your iTunes account for a particular purchase. This bypasses the credit card fees completely without the need to pre-pay.

        I’d link in a heartbeat. It’s less than the credit card transaction fees and I’d be saving a sweet 2% up front. That’s better than almost all of the credit card rewards programs.

      • charly

        Itunes cards can be bought for less than their face value so why pay per creditcard if you regular spend money on itunes?

      • davidnkeng

        True, but iTunes accounts can only (currently) be used for iTunes/App Store/Mac App Store content. If you were, for example, to use your iTunes account to buy lunch at Chipoltle Apple would no longer be able to afford to give you a 15% (the most you might get) discount on your iTunes Gift Card. 2% is possible because it compares favorably with credit card processing expenses.

        But the system would scale. I’m imagining an Apple Payment System based on iTunes that could be used on a widespread basis. 2% off the top would be great for consumers.

      • charly

        I have seen recently a 50 for 40 so that is 20% (or 25% depending on how you look)

  • obarthelemy

    I think a key difference is that Apple’s MAU are a direct consequence of Apple’s device sales. On the one hand, the minute you buy a Apple device you become a user of their ecosystem; on the other hand, if/when you switch brands, you cease to be. Other startups are purely software-based, and are not dependent on releasing successful devices. Even Amazon mostly sell other OEMs’ stuff, so though their “users” buy hardware, they can stick with Amazon to buy whatever brand.

    Apple’s system is emphatically designed to create lock-in. I’d argue it also creates lock-out and a disincentive to buy both hardware and content, since betting that you’ll still be using Apple devices a few years down the road is a lot riskier than getting ecosystem-agnostic content from Amazon and such, or ecosystem-dependent but brand-agnostic content from the Google Playstore.

    • Jonathan Mackenzie

      Much of Apple’s content is brand agnostic, too. I use the Kindle Reader and purchase books from Amazon, I useMicrosoft Office, and I also Netflix. All of these apps are examples of brand agnostic content even while being locked into an ecosystem dependent app store. So there may not be as much difference between Android and iOS in this regard as you suggest.

      • obarthelemy

        Indeed, as long as you don’t buy content from iTunes, you don’t get locked in.

      • pesc

        How is music bought on iTunes contributing to lockin?

    • melci

      And yet Apple continues to capture 60-70% of worldwide digital music sales and generates 500% more revenue for app developers than Google.

      Looks like FAR more users aren’t concerned about being locked into Apple’s ecosystem than buy “agnostic” content from Amazon or Google.

      • charly

        You are wrong with respect to app developers. What you are claiming is that sales are 5 times as high on itunes compared with google (is that even true) but most app developers are not paid out of direct sales..

        ps. The amazon fire is lock-in squared. Is that the reason you picked it?

      • melci

        All the data indicates that even in ad revenue, the iOS platform obliterates Android:

        In terms of app platform, Apple continues to destroy Android:
        - iOS developers make 500% more revenue than Android developers in 2013 (Minyanville)
        - In-App purchase revenue is 4x greater for iOS developers than Android in 2013 (BI Intelligence)
        - 84% of mobile games revenue is generated by iOS (NewZoo)
        - iOS games revenue is almost 3x greater than Android in Q1 2013 (IDC and AppAnnie)

        Developers, content providers and publishers are not making up the difference in advertising:
        - 63% of ad impressions within apps came from iOS in 2012 while Android plummeted from 53% in 2011 to 37% in 2012 according to Velti.
        - 94.6% of Tablet web browser share is iPad (Chitika)
        - 69% of mobile ad viewing share is iOS vs 29% for Android (Chitika)
        - 51% of in-app and web ad revenue is generated by iOS (Opera)
        - MoPub reports that 75% of ad revenue is generated by iOS users.

        And iOS users are far more lucrative for advertisers, developers and content providers:
        - 1,790% greater FaceBook ad profitability (ROI) for iOS in 2013 (Nanigans)
        - RPC [revenue per click] on iOS averages 6.1 times higher than Android in 2013 (Nanigans)
        - CPM rates are twice as high for iOS devices compared to Android

      • obarthelemy

        lots of these figures are US-only.

      • melci

        Only some of the data is US-only, the rest is worldwide

      • melci

        ps. I mentioned Amazon as they are the subject of the article’s comparison with iTunes.

      • obarthelemy

        Factually wrong, Google play alone generated 55% of iOS’s App Store revenues, then add the alternative stores (Amazon; 360, Xiaomi, Baidu, TenCent and others in China; the OEMs’ and carriers’…). So the iOS app stores generates less than double Google’s PlayStore revenue, and probably only a bit more than Android in general when all stores are taken into account.
        http://gadgets.ndtv.com/apps/news/google-play-leads-app-store-in-downloads-catching-up-on-revenues-report-509452

      • melci

        Depends which analyst you talk to though this data is 9 months old: http://venturebeat.com/2013/07/17/comparing-apples-and-googles-the-app-store-vs-google-play-infographic/

        “Apple… banks almost 500 percent more than Google, pulling in a sweet $5.1 million in revenue each and every day. Meanwhile, Google … only takes in $1.1 million per day.”

        Even your data demonstrates that Apple’s iOS generates almost double the revenues of Google’s Ecosystem (other App Stores don’t fill Google’s coffers) and even together are still less than Apple.

        My argument – particularly the Music and media stats which you didn’t address – still stands.

      • obarthelemy

        Yo did say “generates 500% more revenue for app developers than Google.” when it’s in reality below 100%, probably 50% tops.

      • melci

        The link you provided from AppAnnie shows Apple’s App Store generating 200% the revenue of the Play store and the link I provided from 6 months earlier from a different analyst shows the App Store generating 500% the revenue of the Play Store. I’m not sure where you’re pulling the figure of 50% from.

        In any case, all of these figures show the App Store generating significantly more than the Play Store and together with the 60-70% market share figure for the Music store fully support the argument that a large number of users (represented by 800 million accounts to be precise) are more than happy it Apple’s “lock-in”.

    • handleym

      “Apple’s system is emphatically designed to create lock-in.”
      Asserting something doesn’t make it so…
      EMPHATICALLY designed? Really?
      Which is why on my iPod (and iPhone and iPad) pretty much every piece of content I view, from podcasts to iTunes U to streaming video to PDFs is something I could view elsewhere if I wanted?

      As far as I can tell you have ZERO interest in actually understanding Apple. You insist on continually make these wild conspiratorial claims, regardless of reality.

      I guess in your imagination PDF is some sort of proprietary spec where MS Word is an “open” format? h.264 is proprietary whereas WMV is “open”? OpenGL is proprietary whereas D3D is “open”?

      • obarthelemy

        yep, the lock-in (well, stickiness) part was even mentioned in the internal Apple memo. Being “best” wasn’t.
        I’m surprised that email hasn’t got more press, it’s full of nuggets: “catch up with Android notifications”, “Google and MS are further along in the technology”, “catch up to Google with MobileMe”…

    • Mark Jones

      If an Apple device user likes the Apple service, he can use it. If he wants another choice, he is offered lots of them, including those offered by Google and MS. If he’s thinking about switching a few years down the road, he is free to use those other choices on his Apple device. (Because of the highly enjoyable experience of using Apple devices, most Apple users find negligible risk in betting that they’ll still be using Apple devices a few years down the road.)

      • charly

        Most people just don’t invest much in services outside the cost of an iphone so switch cost are not that big of a deal. For 10% of the price of an 5S you could probably buy everything you bought on itunes. if you are no a whale

    • Sam

      Amazon has DRM on the same services as Apple, Movies, TV Shows, eBooks.

      Yet Amazon’s DRM are available on iOS, so it’s less locked-in.

      Amazon’s DRM services, minus Kindle books, the Movies and TV show are not even “supported” on Android. So Amazon locks-out non-Fire devices, non iOS, almost as much as Apple.

      Amazon is not any more ecosystem agnostic than Apple with the exception of eBooks.

      Android users are more likely to switch to iOS, than vice versa, so most iOS users aren’t worried.

  • http://www.isophist.com/ Emilio Orione

    Would be interesting to know Apple’s iMessage MAUs, a whatsup competitor, and Apple’s FaceTime MAUs, a Skype competitor.
    Both services are free but a revenue structure is in place trough device sales.

  • charly

    Apple is world wide. Amazon is only in a few selected places (North America, Japan, Part of the EU & Australia). I also think Amazon accounts are more shared than itunes acounts

  • jameskatt

    But: How much of this per user revenue is PROFIT? Graph that please.

    Since Amazon is headed into a loss, we should see a red negative column next quarter for profit, and very short columns leading to this negative.

    Apple would simply remain profitable – so much so, it has to buy back its own stock since it has nothing better to do with the money pouring in.

    • http://www.asymco.com Horace Dediu

      Apple probably has some profit from the Software/Services component but selling other people’s content is probably break-even. As is Amazon’s.

  • GuruFlower

    I’ve been considering a similar line of inquiry since the 800 million number was mentioned because I’m wondering what it might take for Apple to double revenues. I looked at TTM revenues of $176,035 billion and found that the average iTunes account holder may have spent ~$220 last year, a little below the average Amazon user who appears to have spent ~$274. (Of course, an Apple to Amazon comparison is not comparable because Apple’s customers buy Apple’s products whereas Amazon’s customers buy other companies’ products for a small service fee paid to Amazon.) As a sort of rough check I totaled my family’s American middle class contribution to Apple’s revenues over the past 7.5 years and came up with $446/person annually.

    So, could Apple double revenues simply by doubling its user base to 1.6 billion souls? Would it require that every user double his cash outlay to Apple so that they more nearly approximated my family’s contribution? This might be an interesting line of pursuit for Horace because he has the granular data to show the trends. The user base will likely continue to grow to some maximum percentage of the world’s population and there’s certainly an upside limit on dollars spent annually. What might those numbers be?

  • crustyjusty

    There is another layer to this that is interesting. Part of the reason the iTunes accounts are growing exponentially is because the accounts are used to buy digital goods that are $.99, and can be consumed by people of all levels of wealth and status. So, Apple has convinced almost 800M people to link payment information to these accounts. Amazon’s accounts are typically for more expensive physical goods that require delivery and other logistics not available for every buyer.

    By going from simple –> complex, Apple is in a fantastic situation to switch these customers from buying small digital goods to more expensive physical goods, because they’ve spent over a decade training users and building trust. If Apple allows other sites to use an “iPay” widget for the purchase of physical goods, I believe they’ll succeed where others have failed.

    • Christian Peel

      I love the iPay idea, maybe ‘iShip’ is better name? I imagine a shipping partner, and some program by which a vendor gets certified to work with the iShip shipping partner. After looking at a shirt or laptop or toy on your iPad or iTV, you just order it! This would be wonderful, and would not require the centralized infrastructure that Amazon is building.

      • handleym

        Not as easy as you might think. The problem is that Apple then gets tarnished with either lousy quality goods or lousy fulfillment.

        To compete with that you have to do the Amazon bending over backwards to take back shoddy goods, deal with complaints, offer replacements, soothe upset feelings. That costs a LOT and to do it at scale is really tough. It’s like believing that all it takes to compete with Walmart is opening your own general store “heck, I know the people in this town, so I already have a great advantage over faceless Walmart”…

        They could maybe scale it out very slowly with a few trusted partners, but then it’s even worse because Apple is kinda implicitly guaranteeing that those partner products don’t suck. Who do you trust will not ship at least a few garbage products? Heck even Apple does (*cough* POS wireless keyboard with broken battery spring design *cough*).

      • Christian Peel

        Thanks, great comments. Apple doesn’t take all the blame for bad games on the Apple store, and it seems that if a shipping partner were made available, the shipping partner and the seller would take the major part of the responsibility for delivering.

        As you say, this is not easy; I’m just trying to imagine a way to compete with Amazon in a decentralized way.

      • charly

        Apple sells games made by a large number of companies but in handleym case they would start out with a selected number of companies. So to say hand-picked and as such a higher quality is expected (the absolute crap should be missing but that is hard to do)

      • crustyjusty

        Again, I would think Apple would never get into procurement, but would just take over pieces of the payment processing experience. Use TouchID, link it to a bank account, and suddenly 3rd party websites can make buying physical goods as simple as using Amazon.

      • mieswall

        There should be a whole scope of third party goods suitable to be distributed using the AppleStore infrastructure. Imagine: wholly secured purchase with touchId, wait a couple of days and then go to your registered favorite Applestore to pick up your stuff. If people is not satisfied enough, and too much complaints arise from customers from a score-based evaluation, the vendor looses Apple’s partnership. Win win situation for Apple (commissions and attracting people to stores, a physical ecosystem), vendors (Apple as your front-end) and customers (quality, convenience, etc). And with Angela giving a chick aura to all this… wow.

    • Walt French

      Wait… Apple should go into the ultra-mass-market, ultra-low-margin business of shuffling bits around?

      Check out a recent stratechery blogpost on the topic; I think you’ll see that the day is pretty far into the future.

      • crustyjusty

        Walt: Maybe I didn’t explain myself well…I’m not implying that should go into procurement or shipping, but that they become a payment processing company.

        If they can make buying diapers as easy as buying a song or app, they should be able to capture very good margins on facilitating the purchase of physical goods. No log-in, no account creation, etc.

        I’m thinking Visa like margins (Gross Profit of $9.8B on $11.8B of revenue) , particularly if the security model (TouchID, etc.) reduces fraud to much lower levels.

        Visa gets around 2% of most transaction, right? I think 3rd party websites would pay 5% to reduce the barriers to purchase to iTunes-like simplicity…thus helping them compete with Amazon.

      • Walt French

        Read the Stratechery post—Ben’s pretty good—and THEN come back with a proposal that could work.

        By “shuffling bits” I meant sending payment/debit info. That’s a huge volume activity, with 99.9999% accuracy and other standards mandatory. (The bank where I once worked told me that if they don’t decline a credit request within a second, they protect the merchant—eat the costs of—any chargeback.) Apple does NOT have skill in that level of volume and timeliness!

      • charly

        TouchID is not good security. Apple is not good at security so why would you expect lower fraud with Apple? Apple has also a problem with vice etc. Especially that last bit could bit them when you can’t buy a playboy with Apple’s payment service

      • Space Gorilla

        I read that Stratechery post, and wondered why a payment system couldn’t be built on top of debit cards, rather than credit cards. In Canada anyway we’ve all (mostly?) got debit cards with a chip and a PIN. If there was some way to make my iPhone my bank card and make it even more secure, that seems like something I’d use a lot. But perhaps there are reasons that isn’t practical.

    • Frank

      Such retail could be accomplished via third party apps. Apple could receive a cut.

  • melci

    I’ve posted this elsewhere, but it helps to broaden the analysis:

    Morgan Stanley had a few other comparisons from mid-2012 that help to flesh out this picture to illustrate just how dominant Apple is:

    Revenue per user:
    Apple = $329
    Amazon = $305
    eBay = $125
    Netflix = $123
    Zynga = $7
    Pandora = $7
    FaceBook = $5

    Account Base (millions):
    FaceBook = 1,056 (not credit-card enabled accounts so much less valuable)
    Apple = 500 (remember these are 2012 figures)
    Amazon = 200
    Zynga = 180
    Paypal = 123
    ebay = 112
    Pandora = 66
    Netflix = 29

    Account growth in 2012:
    Apple = 55%
    Pandora = 39%
    Facebook = 25%
    Amazon = 22%
    Netflix = 20%
    Paypal = 15%
    ebay = 12%
    Zynga = 10%

    Free cash flow per account:
    Apple = $95
    ebay = $23
    Amazon = $9
    Facebook = 0
    Pandora = 0
    Zynga = -1
    Netflix = -2

    Notice that Google isn’t even mentioned in these figures. That’s because they only have an unbelievably minuscule 50-100,000 users for Google Wallet, the mobile payments system that they’ve been spending hundreds of millions of dollars on for the last 3 years. This has to be just about the biggest failure in Tech Industry history.

    Also, by my count (including estimated iPod touch sales) Apple is now at 844 million iOS devices. Not bad compared to the 1.5 billion Android activations Google has seen since 2008.

    • El Aura

      You throw in the number of users of Facebook; the fair number to compare with that is people with a Google account (Gmail). Of course, people are much more likely to have multiple Gmail ‘accounts’ than multiple Facebook accounts.

      Google is trying very hard to condense them all into one ‘personality’ with their “Log in once, and have access to all your accounts/email addresses)” campaign. Once you have logged into one account you cannot even log into another account without linking the two accounts unless you delete all/relevant Google cookies.

      I wonder though why they do this, even without cookies, with different accounts from the same IP (or set of IPs), particularly if spread over different devices, it should be pretty clear to them which accounts belong to the same person. And thus even the difference of wether you are logged into a Google account or not while using Google products should not really make much of a difference to how they can link things to you. Using Chrome likely gives them additional information.

      Thus, the number of monthly users of any Google service (in particular search) might be another one on which Google could be compared.

      • melci

        I think Morgan Stanley only included FaceBook in their figures as a point of comparison in terms for sheer size of user base because it is certainly the case that FaceBook accounts are not tied to credit card accounts unlike Apple’s iTunes accounts. The difficulty of weeding out multiple accounts for free email services like Gmail would certainly pose a challenge.

      • charly

        Are the overwhelming majority of itunes acounts linked to credit cards? I doubt that.

      • Walt French

        “Cook revealed that there are now almost 800 million iTunes accounts, most of them with credit cards on file.”

        It seems likely that the fraction is closer to your “overwhelming majority” than a bare-bones 51% because most users actually buy a game, some music, extra photo space or an iBook from time to time.

        It’s possible Apple gets higher revenues from a small number of ultra-frequent game players or music addicts but They’d need to be really rabid if their numbers were so small, to still have averages so much higher than Android’s.

      • Tatil_S

        Some accounts are probably funded by gift cards, rather than credit cards. I am not sure if that changes the spending pattern that much, but having to go out and buy cards must be adding some friction.

      • charly

        But they reduce friction when bought.

      • El Aura

        From the outside, yes. As I said, Google could very likely figure out how many real people are behind all Gmail accounts.
        It would nice to think, they don’t do that explicitly, that they just calculate degrees of similarity and that they have a big cloud of very similar accounts and that all these accounts just get served similar ads and Google doesn’t care if a particular cloud of similar accounts belong to 50 or only 10 actual people.

    • http://www.asymco.com Horace Dediu

      We have not heard from Google on activations in quite a while.

      • melci

        True. Do you have any estimates yourself Horace?

        Plotting the growth curve in daily Android activations, it had been flattening off last year meaning the total should probably be around the 1.36 billion mark if it was still at 1.5 million daily activations level, hence my estimation of 1.5 billion total as a more generous outside estimate.

        I can see one of your lovely graphs itching to be drawn Horace. :-) Plotting the growth in Android activations against the 844 million iOS devices sold would be very useful.

        Android hit 1.5 million activations per day 9 months ago (July 19) but it took 9 months to get there from 1.3 million (Sept 2012) while in comparison, increasing the 300,000 from 1 million per day in July 2012 only took 2 months so we seem to be seeing a severe deceleration in growth occurring.

        However, we really need to hear from Google to confirm this.

      • Space Gorilla

        Not all the time of course, but often when a company doesn’t report a number, it means the number isn’t great.

  • Space Gorilla

    I wonder how long it will take for some ‘analyst’ to write an article about how Monthly Active Users don’t really matter and in fact good performance in this metric is actually a bad thing (since Apple is doing well in this area)? We’ve already seen the word ‘innovation’ redefined and misused, in large part I think because many people desperately want to prove that Apple is not innovating. It will be interesting to watch, it seems almost a certainty that a negative spin will be crafted re: Apple’s MAU.

  • Walt French

    I’ll just toss out three observations. First, as I see melci has noted, these charts cover just a tiny part of Apple’s game plan.

    Second, the shift in music vs apps might be understood that by 2007, Apple had essentially saturated the digital music business, having gained essentially all the people who were willing to pay for music, that it would. People like me, who hear a great song on the radio or live performance at the symphony, and want it in our mix or the accompanying album ready to choose on a flight, bought iPods; people who like a more radio-type experience mostly weren’t iTunes customers, and especially with streaming alternatives, haven’t had a reason to become one — for music, anyhow.

    Third, people knock Amazon for pursuing growth without any (accounting) profitability, but Apple would seem to be actively destroying profitability by giving away some of its previously most-profitable iTunes products (software & services), which I presume would be its OS upgrades, iWork and “iPlay.” The drop in that category explains approximately 100% of the drop in the per-user total.

    • charly

      Software&Services is i assume mostly OSX. If you attribute that to the PC division instead of the itunes division than OSX upgrades wouldn’t be the most profitable product. Also stop selling upgrades saves money (fewer versions to support) and closes the hackinthosh hole and it is service consumers and software makers love.

      People don’t knock Amazon, they knock Wall Street for seeing it as good. For Amazon it is brilliant. It is easy to beat competitors if you operating expenses is much lower (because you don’t need to make a profit)

      • ptmmac

        You don’t need to make more money when you finance your acquisitions with inflated stock prices and inexpensive borrowing. I think that if Amazon gets into the devices market, then it may find that it’s ability to make money may be limited by it’s lack of access to capital. The other driver of Amazon’s business model has been dropping costs for it’s services over time. This has been driven by economies of scale and improving robotics technology.

        If you were to look back over the years at how many companies set their sights on the cell phone market and then were wrecked by it’s extreme competition and pace of innovation, you would not see Amazon as a likely success story in this market. Apple was an innovator who saw the cell phone market moving into it’s market place and planned accordingly. Amazon is simply following Apple with a service that it sees as necessary to keep a compelling on line presence.

        A doubling of interest rates for future debt would not hurt Apple, it would make owning it’s long term capital reserves a more profitable problem. Amazon will be forced to continue borrowing money with rising interest rates at the market rate or accept less growth and slower cost improvements.

  • Chaka10

    Melci notes below that the data doesn’t include Google info. Is that data available –how many MAUs for Google services?

  • stefnagel

    Horace, at what point, when Apple hits a short scale billion users in the next calendar year perhaps, does quantity transmute into quality? Ecosystem into “econsystem”? Here’s some of the attributes of this billion users:
    * self selected, not cultural or commandeered members
    * credit card carrying, not coupon clippers or children
    * global, not nationally focused
    * economically dedicated, not coerced taxpayers
    * technically engaged to some degree, not simply couch potatoes
    * educationally engaged at some level, not simply consumers
    * continually communicating with Apple
    * persistently connected with Apple

    In a week when a Princeton and Northwestern US study concludes
    “… mass-based interest groups and average citizens have little or no independent influence…” and
    “When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose.” and
    when the US is described as an oligarchy and not a democracy,

    these attributes are striking or at least fascinating, no?

  • http://www.informerly.com Informerly

    Isn’t “projected revenues for each MAU” just customer lifetime value (a previously in vogue metric)?

  • Rarild

    Who is your daddy? Apple and Amazon sell goods, material and immaterial, to customers, who pay. Facebook, Snapchat et al provides free services to users, and an audience to advertising corporations, which are the customers who pay. If Facebook and Snapchat charged for services provided, their users would also count as customers, but, importantly, the social network services business per se is completely different from the general-merchandise-and-digital-content business of Amazon and high-end-electronics-and-digital-content business of Apple. So, revenue structure follows from attractiveness of goods and services on offer in the market reached. Social network services companies appear to be offering attractive audiences to companies in the advertising market. In one business model, MAU is a market of potential consumer-customers to the first party. In the other business model, MAU is an audience of third-party potential consumer-customers to the second-party corporate customer, the advertiser. Between the different business models, revenue structure per user is fundamentally incomparable.

  • Chris Walter

    Alibaba lists 231 million active users