Those wouldn't be rare gross margin percentages based on price/simple cost in much of retail. However, that simple gross margin calculation can be pretty far a

Those wouldn't be rare gross margin percentages based on price/simple cost in much of retail. However, that simple gross margin calculation can be pretty far away from realized gross margin or net profit. Once you're talking around 35%-45% gross margin, you're often times simply talking about potential: GM = (Retail Price - Vendor Cost)/Retail Price. That gives you the potential margin, but excludes actual performance including things not directly related to item performance (general administrative costs, losses due to shrink, returns, landed costs, etc.) So the realized margin at the end of a reporting period narrows from that gross margin approximation quite a lot sometimes. I once ran an IT group for a start-up retail chain where we manufactured a number of the more popular product lines in our assortment. We were running up to 98% simple GM on products on the retail side in those lines and still ended up going out of business after a few years. The simple GM number was great, but the realized gross margin was maybe 50% so all of those other costs more than made up for it. And in the end, those products weren't the ones product management needed to be the most popular (they were pretty low dollar value). A more interesting number on these lines would be GMROI (Gross Margin Return On Investment) along with Apple's typical GMROI numbers. The reason this value is more interesting is that gross margin doesn't really tell you how important a product is to your business. For example if I sell a single item at 98% margin over the course of a year, that's great GM, but the item I sell 10000 times over the same period with a GM of 25% is probably more important to my business (just one example of how GM might be misleading in this regard, there are other factors, too). To get this value you basically do GMROI = ((Item Revenue - Item Costs)/Item Revenue)/Average Inventory Cost (for quarter, year, etc). That's how you'd know if Apple were really hurting themselves moreso than not by not carrying this product line. [edited for clarity of point]