First, Mr. Dediu arrives at the $1.8 billion figure by making guesses about the number of ebooks sold each month, and he also made a WAG about the average selling price. But let's skip that and focus on the bigger error that Mr Dediu made at the very beginning of his analysis. Let's see if you can spot it:
In June of 2011 Apple announced that 130 million ebooks were sold through iTunes. In October of 2012 it announced that 400 million sold.
If you've followed Apple news then you know they don't announce the number of ebooks sold; Apple has announced the total number of downloads (example). That is not the same thing.
Downloads includes all the free ebooks that don't generate revenue. And if the statistic I found while writing about Amazon's changes to their rules about free ebooks promotions was any sign, free ebooks outnumber paid titles by at least 15:1 and possibly as much as 100 to one (according to Smashwords).
So the short of it is the billion dollar figure that Asymco is reporting today is complete bunk. And that's a shame because this was potentially a very hot story.