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Competing iPhone stores negligible, says Needham

updated 03:55 pm EDT, Mon March 9, 2009

Needham on App Str. rivals

The emergence of unofficial app stores as an alternative to iTunes does not pose a serious threat to Apple's bottom line, according to Needham analyst Charlie Wolf. Services such as the Cydia Store could in theory deprive Apple of its 30 percent commission made via the App Store, but Wolf proposes that the alternatives will be unable to sell sanctioned titles, which already number over 25,000. Instead, third parties may be limited to potentially offensive or poor-quality apps.

Apple may not even be especially concerned if it loses out on profit, says Wolf. Mirroring strategies at the iTunes music and video stores, the App Store is said to be meant solely for keeping people using iPhones, leaving paid apps useless when a person chooses a rival device. Apple needs only to break even on the App Store -- and keep selling iPhones -- in order to make it beneficial, Wolf argues.

In that regard unofficial apps may actually aid Apple's cause, by luring in an larger audience equally tied to the iPhone as a platform. Wolf notes that Needham is maintaining a $200 target on Apple stock, and predicting EPS of $5.50 in 2009 and $6.40 in 2010. AAPL is currently valued at approximately $85.

by MacNN Staff





  1. eldarkus

    Joined: Dec 1969


    Captain Obvious...

    we salute you!

    Comment buried. Show
  1. MegaPoker

    Joined: Dec 1969


    MegaPoker Online - Texas Holdem Poker

    Hey, try MEGAPOKER ONLINE - Texas Holdem Poker for iPhone and iPod Touch. It's a great multiplayer game.

  1. OS2Guy

    Joined: Dec 1969


    Legitimate iPhoners Lose

    Needham fails to mention the cost these errant illegal apps cause the legitimate iPhone user. It leaves them open to a myrid of complaints, problems, bugs, virus, trojans, worms and actually hands thieves money for stealing code from other legitimate developers. Encouraging articles like this only hurt the iPhone community.

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