Filloux: Don’t pooh-pooh Apple’s ARPU

According to Frederic Filloux’ Monday Note, average revenue per user (ARPU) is the most important metric of all.

From The ARPUs of the Big Four Dwarf Everybody Else.

Apple arpuClick to enlarge.

To put it another way, with its service business (music, apps, etc.) Apple is making 10x more than a decent publisher makes on advertising. And given the growth (+17 percent Y/Y), Horace Dediu does not exclude a service-related ARPU of $50 per device owner and per year in the near future.

My take: Amazon may be the king of ARPU, as Filloux dubs it, but Apple’s $194 per user is nothing to sneeze at.

While we’re comparing apple and oranges, here’s how Filloux says the New York Times stacks up against Google and Facebook:

apple arpu

In other words, for each dollar of digital ad growth between 2011–2018, the NYTimes took 32 cents, Google took $1.00 and Facebook took $3.70.

10 Comments

  1. Jonny Tilney said:

    I wonder how many people apart from myself are nearing the red line when it comes to online advertising..?
    For example, this morning on Twitter:
    “When my partner and I found out we were expecting our first child last February, we resolved to keep it a secret from the internet. We quickly found that in the eyes of Facebook and Google, our child was a product that needed to be ruthlessly monetised.”
    https://www.wired.co.uk/article/the-internet-hates-secrets

    0
    February 11, 2019
  2. Jonny Tilney said:

    And yes, we do doubt Apple has…
    “In case anyone doubts it: the FAANG (Facebook, Amazon, Apple, Google) has been making a killing thanks to their domination of the advertising business.”

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    February 11, 2019
  3. David Drinkwater said:

    “In other words, for each dollar of digital ad growth between 2011–2018, the NYTimes took 32 cents, Google took $1.00 and Facebook took $3.70.”

    How does this math work? The total of the individual earnings has to be a dollar ,doesn’t it?

    Unfortunately, these are Frederic Filloux’s words direct form the cited work, but perhaps someone can make sense of this for me. There are certainly some issues lost in translation/expression, but what can one do about that?

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    February 11, 2019
  4. David Emery said:

    It would be interesting to see a breakout of AWS separate from ‘Amazon the store’. I heard a piece on the radio where someone tried to totally avoid the FAANG part of the Internet, and AWS was the hardest of all to avoid, because so many websites are hosted on AWS.

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    February 11, 2019
    • Turley Muller said:

      Impossible to avoid AWS. Everything is on there. Including iCloud. AWS is 11% of AMZN business, or about $25B for last year.

      1
      February 11, 2019
  5. Gianfranco Pedron said:

    ARPU schmARPU! … can’t use it to pay for groceries or anything else for that matter until you turn it into profit.

    About as useful as using marbles as a metric for business performance.

    1
    February 11, 2019
  6. Gregg Thurman said:

    Its very useful for determining customer engagement.

    Are the firm’s customers one time buyers (razors) or do they keep coming back for more (razor blades).

    Another way of looking at it is this, if Apple sold 900 million iPhones in 2007, then sold nothing thereafter, its iPhone business would be worthless.

    There are a finite number of NEW customers. We’ve just about exhausted that supply. Apple’s future depends on selling its existing customers more products.

    Microsoft (think Steve Ballmer) lost out to Apple when it failed to develop anything new to piggyback Windows, and the computer industry ran out of new customers.

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    February 11, 2019

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