iTunes Makes Big Bucks for a “Break-Even” Business

When Apple last reported earnings, the company said iTunes billings for the quarter came it at over $4 billion. Apple expects to post similar billings in the quarters ahead for a $16 billion annual run rate. That’s an awfully big number. How does it break down on a per-user basis?

Asymco’s Horace Dediu has done the math and come up with a number: About $40 per year, on average. Seem low to you? Does to me, but that’s from my own cord-cutter perspective. But taken together with all gross content revenues — including services & software — Apple’s iTunes business cleared over $5.5 billion in the last quarter (Caveat 1:That big number is as large as it is thanks to significant growth in app sales; Caveat 2: iTunes’ sales growth may be slowing).

Not bad for what Apple conceived as a “break-even” business, one that it doesn’t yet view as a leg on its three-legged stool. Perhaps it’s time for the company to upgrade that analogy to four-legged chair — or throw in the iPad as well and make it a recliner …