Asymco has calculated that if iTunes were a standalone business, it would be ranked 130 in the Fortune 500 list of top U.S. companies after its gross annual revenue grew 34 percent year-on-year to $23.5B. This would put it between Alcoa and Eli Lilly in the rankings, and is almost half of Google’s core search business – not bad for what was originally intended to be a break-even operation …
Growth was driven by increases in revenue from App sales reflecting continued growth in the installed base of iOS devices and the expansion in the number of third-party iOS Apps available. Net sales of digital content, including music, movies, TV shows and books, from the iTunes Store was relatively flat in the first quarter of 2014 compared to the first quarter of 2013.
Asymco also calculated the cost to Apple of making both the Mavericks update and iWork software free …
During the last quarter Apple changed the pricing for iWork and OS X to zero. I estimate the net effect to have been a reduction in revenues from those software titles of about $350 million for the quarter.
Flat revenue from media likely reflects the gradual trend away from downloads in favor of streaming services. Data published at the end of last year by Billboard magazine suggested that music downloads may have peaked in 2012.
Businessweek last year calculated that iPhone as a standalone business would be bigger than Microsoft, Coca-Cola and McDonalds.