Dediu’s fundamental principle in making the estimate is Apple’s assertion that iTunes does not generate an income and instead its sales are re-invested back into operating and improving iTunes. Using figures that were announced at WWDC such as 15 billion tracks downloaded, 14 billion app downloads, and $2.5 billion paid to developers, Dediu was able to roughly estimate on a monthly basis how much Apple was earning in revenue and paying out.
It worked out at approximately $313 million per month and $1.3 billion a year.
Obviously there is a wide margin of error as Dediu isn’t privy to Apple’s actual operational costs or margins but the $1.3 billion sum does give an interesting ball park figure.
But the question remains, if iTunes gets approximately $1 billion re-invested in it every year then why does it still kind of suck?