As analysts and investors continue to wonder whether present-day Apple
(NASDAQ:AAPL) has what it takes to stem Google's
(NASDAQ:GOOG) massive market share with its Android platform, one Cupertino division has proven to be a continued success year after year. So much so that its gross revenues would rank it 130th in the Fortune 500 if it were a stand-alone company.
According to a recent study
by Asymco, iTunes revenue in 2013 is estimated to be $23.5 billion, giving it a growth of 34% year-over-year. To put that in perspective, Asymco's Horace Dediu stated that on a yearly basis, iTunes and the revenue from its software and services is "nearly half of Google's core business," which doesn't include Motorola and segments referred to as "Other."
And compared to other Fortune 500 companies, a stand-alone iTunes would rank between Alcoa
(NYSE:AA), the world's third largest producer of aluminum, and the pharmaceutical company Eli Lilly
(NYSE:LLY), and tie with energy company Exelon
Dediu attributes the solid growth to increases in app sales as reflected in both the expanding install base of iOS devices as well as the growing number of available third-party iOS apps.
Not everything under the iTunes banner is seeing gains, however. Dediu indicates that net sales of digital content -- which includes music, movies, TV shows, and books -- have remained relatively flat in the first quarter of 2014 compared to the first quarter of 2013. And Apple's decision to make OS X Mavericks and iWork free downloads cost it roughly $350 million for the final quarter of 2013.
Nevertheless, iTunes' continued success is undeniable, making it an integral reason why Apple is sitting pretty at #6 in the Fortune 500.
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No positions in stocks mentioned.