it seems reinstall and app updates also counts - it's not just 1 million new app install a year but probably also:
1. You made a one time paid app. If in the first year you got 2M installs and sold app for 5$ you are profitable, but next year if those users who already paid will make an app update then you will own ~$1M to apple for those app updates even if you didn't make any new money from those users. You would be forced to change your business model to subscriptions.
2. If user has iPhone, iPad, apple watch and your app support all those platforms then probably this will be counted as 3 installs.
3. By default app store updates app automatically - if user has still some old iphone/ipad that uses from time to time this is getting even worse.
"A first annual install may result from an app’s first-time install, a reinstall, or an update from any iOS app distribution option — including the App Store," [0]
So update do counts it just in a year (12 months) install, reinstall and update is counted as one. But once user bought a paid app and installed it then next year if that user update app developer will have to pay for this update
1. You made a one time paid app. If in the first year you got 2M installs and sold app for 5$ you are profitable, but next year if those users who already paid will make an app update then you will own ~$1M to apple for those app updates even if you didn't make any new money from those users. You would be forced to change your business model to subscriptions.
2. If user has iPhone, iPad, apple watch and your app support all those platforms then probably this will be counted as 3 installs.
3. By default app store updates app automatically - if user has still some old iphone/ipad that uses from time to time this is getting even worse.