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>Apple rarely (never?) releases products as loss leaders Ever heard of the iTunes music store? Minimally profitable and repeatedly referred to as a driver for
by TetOn 16y ago
>Apple rarely (never?) releases products as loss leaders
Ever heard of the iTunes music store? Minimally profitable and repeatedly referred to as a driver for iPod/iWhatever sales rather than a profit center. Without the iPhone's popularity, the same concept would apply to the App Store as well. When announced, it was directly compared to the music operation, and not expected to make any measurable impact on the bottom line.
This analysis (though obviously flawed by Apple's own sales data release policies) largely backs up these statements:
http://seekingalpha.com/instablog/255967-timeline-strategy-consulting/1234-how-much-profit-is-apple-making-from-the-app-store http://seekingalpha.com/instablog/255967-timeline-strategy-c...
- JunkDNA 16y ago>Ever heard of the iTunes music store? That was the whole point of my post. Lots of companies would be tempted to operate something like the iTunes music store at a loss, since it would be seen as driving sales (a marketing expense if you will). For example: Amazon has is known to sell a significant number of ebooks at a loss to keep prices low to drive Kindle sales. My understanding from everything I have read is that Apple at least breaks even, and may make a small amount of revenue. They do not lose any money on the iTunes store. If there is going to be a free component to MobileMe, they are going to try and generate profits from it somehow.