Apple Says Application Downloads Have Exceeded 40 Billion

Apple Inc. said customers have downloaded more than 40 billion applications from the App Store, with almost half of those in 2012, escalating a duel with Google Inc. over which company is gaining the most traction with users.

More than 2 billion apps were downloaded in December, a record, Cupertino, California-based Apple said today in a statement. Apple, with more than 775,000 apps available for its iPhone, iPad and iPod Touch devices, said it has paid more than $7 billion to those app developers. By comparison, Google’s Android software had about 25 billion app downloads from its store as of September.

Apple is counting on apps to help woo consumers who are choosing from an increasing array of lower-priced tablets from competitors, including Google, Inc. and Microsoft Corp. Apps can also help the iPhone compete against feature-laden phones from Samsung Electronics Co. and Nokia Oyj.

The growth in App Store users to more than 500 million active accounts, from 435 million in September, as well as the surge in downloads from 35 billion in October, “could help allay some recent demand concerns,” Will Power, an analyst at Robert W. Baird & Co., wrote in a research report today. He rates the shares outperform with a target price of $750.

Android’s Surge

While Apple pioneered the smartphone market with the iPhone, it now trails devices that run on Android. Handsets based on Android, which offered about 700,000 applications to users as of October, had 72 percent of the global smartphone market in the third quarter, compared with 14 percent for Apple, according to Gartner Inc. Google doesn’t disclose how much it has paid to Android app developers.

Shares of Apple slipped 0.6 percent to $523.90 at the close in New York, a third straight day of declines after a 31 percent increase last year. Barclays Plc cut its price estimate to $740 from $800 in a research report yesterday, while maintaining an overweight rating on Apple stock.

“Expectations are actually low and getting lower,” Ben Reitzes, an analyst at Barclays, wrote in the report. “Many investors fear iPhone sales will be relatively flat this year and that there will be no move into TV that moves the needle.”

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