Running a massive music download service that provides billions of song sales per year and various application downloads is not a cheap endeavor, in fact a recent report by Horace Dediu estimates that Apple spends $1.3 billion per year to operate their iTunes platform, an amount equal to $113 million per month.
Dediu found their numbers via Apple’s Worldwide Developers Conference and then used past data to determine iTunes cost of operation including Apple’s split of music and app sales while taking into consideration that Apple claims an at or slightly above break even basis for operation.
According to the report Apple spends most of their operating expenses on content serving and processing transactions, while left over capital is placed into capacity increases necessary to store the company’s massive amount of data required to house songs and apps.
