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Apple's Download Numbers Seem Phony

I saw the report that Apple (AAPL) is claiming three billion app downloads by iPhone and iPod Touch users. As I looked at the data I've seen over time, particularly with respect to the number of products sold, I've come to wonder whether the numbers are legitimate, or if there's a lot of smoke and mirrors used in a way to effectively inflate the real results.

Start with the actual number of units sold. As I recently noted, the number of iPhones sold through September was about 40 million. Mind you, that's not necessarily customers, but units, as I suspect that as new models arrive, a significant percentage of purchases are upgrade by current users. That doesn't account for the iPod Touch, which runs the same OS. So let's do some triangulation.

According to analyst Gene Munster from Piper Jaffray (who is not necessarily the most accurate of Apple analysts), the company will have sold about 78 million iPhones and iPod Touches as of the end of 2009. In terms of iPhone sales, analyst estimates for last quarter have ranged from about 8 million to just over 11 million, so let's agree for the moment on 10 million. That would bring the number of iPhone units through 2009 to 50 million. That would leave 28 million iPod Touches, or about 35.9 percent, with iPhones representing 64.1 percent of sales. That would suggest a total of 62 million iPhone OS units by the end of September.

At the end of September, Apple announced that it had broken the two billion app download mark. That would mean an average of over 31 apps downloaded per device. Now, just into 2010, we hear that although it may have an additional 16 million units, suddenly the rate of downloads picked up so fast that the company now sees an average of over 38 apps per device, and that the increase happened within three months. Although the estimated number of units increased by roughly 20.5 percent, app downloads increased by double that in a quarter.

Assuming that the new owners were downloading in roughly the same way as those who purchased before, the average number of apps per handset, not even accounting for units that were purchased by people who already owned a device, increased by more than 16. Putting it differently, all the previous owners continued to download an average of five new apps per month. And if that were the case, they'd be downloading 60 apps a year and 3 billion aggregate would be too low.

I simply don't believe it. The way Apple reports download numbers leaves open big questions that would affect how companies plan on developing for the platform. Here are the ones I emailed to two different Apple PR reps much earlier today and to which I've yet to receive a response:

  1. Does the number include music titles?
  2. Does the number include firmware and other upgrades/updates for the iPhone and/or iPod Touch?
  3. Does the count include upgrades/updates for apps that people have already downloaded?
  4. What explanation does Apple have for announcing 2 billion apps in September and then another billion within the last four months? The number of sold units has grown, but not by 50 percent in the same amount of time.
  5. How many individual iPhone users does Apple estimate that it has, separate from the number of units it has sold?
Depending on the answers, the picture of what is happening on the app front could change radically.

Image via Flickr user love♡janine, CC 2.0.

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