>but App Store gross margins are clearly likely to be in the 50-65% range, making its break even somewhere between 10-15% of developer revenues.
Apple dont booked their customer's revenue, only their receiving ( i.e ~30% ) end. So those are close to 100% Margin as well.
There are additional $10 per Mac, iPhone, iPad, Apple TV per unit to Services for their OS, Cloud, Siri and Map Usage. That is close to $3B revenue, and again Gross is close to 100% margin.
The only thing that aren't 100% Gross is Apple Music. Where it has a clear unit cost and margin are likely to be Sub 20%. ( You can take a look at Spotify for margins, and Apple also pay labels a little more than competitors because it isn't part of their profit making branches ) And Apple TV+ which is Apple giving away their Services Profits for something given out for "Free". ( Which is one reason I hate Apple TV+ )
Apple are now basically subtracting all of their Software and Cloud Services Cost from Services Segment. Apple could argue part of the reason why you get 5 years worth of iOS update are from those revenue stream.
And yes, none of these Gross Margin takes into account R&D, marketing, operation and other expenses.
Personally I have no problem with Apple charging 30% for Games like Fornite. Which is the industry Standard across all gaming platform. I just wish they lowered the Apps section in the App Store ( Gaming being already in a separate section ) to 15% rather than 30%. And 10% for Subscription.
Considering the cost of running the App Store, and Apple's promotion of App Store credit. I felt 15% is a much fairer deal.
The audited accounting is clear. Apple s gross margins on services are 68% on roughly $50B in service revenues. That’s roughly $16B in expenses.
Subtract $9B for Google safari payment, and you have $16B in expenses on $41B in remaining service revenues, or 60% gross margins.
Hosting and distribution of terabytes of data every hour costs money. Building and maintains hundreds of localized app stores costs money. Customer service costs money. App Review costs money. Developer support costs money. Maintaining Developer tools and store APIs costs money. Payment processing costs money, esp. on 99 cent purchases.
And why should Apple price these devices at a “fair price”? When you build a business from scratch that be ones far more successful than anyone thought possible, aren’t you allowed to keep the money people freely pay you?
Apple set the pricing at 30% day 1, and it hasn’t stopped a single developer from running to jump into the App Store goldmine. There has never been a more profitable software market for developers. I’d say Jobs clearly got the pricing right.
No one is saying the App Store isn’t allowed to be profitable for Apple. Just countering the misinformation from the post and the wrong assumption that the App Stores only make 60% margin.
Apple dont booked their customer's revenue, only their receiving ( i.e ~30% ) end. So those are close to 100% Margin as well.
There are additional $10 per Mac, iPhone, iPad, Apple TV per unit to Services for their OS, Cloud, Siri and Map Usage. That is close to $3B revenue, and again Gross is close to 100% margin.
The only thing that aren't 100% Gross is Apple Music. Where it has a clear unit cost and margin are likely to be Sub 20%. ( You can take a look at Spotify for margins, and Apple also pay labels a little more than competitors because it isn't part of their profit making branches ) And Apple TV+ which is Apple giving away their Services Profits for something given out for "Free". ( Which is one reason I hate Apple TV+ )
Apple are now basically subtracting all of their Software and Cloud Services Cost from Services Segment. Apple could argue part of the reason why you get 5 years worth of iOS update are from those revenue stream.
And yes, none of these Gross Margin takes into account R&D, marketing, operation and other expenses.
Personally I have no problem with Apple charging 30% for Games like Fornite. Which is the industry Standard across all gaming platform. I just wish they lowered the Apps section in the App Store ( Gaming being already in a separate section ) to 15% rather than 30%. And 10% for Subscription.
Considering the cost of running the App Store, and Apple's promotion of App Store credit. I felt 15% is a much fairer deal.