That's not what he is saying. He is saying that Apple is closer to being a credit card company than a retailer. When you buy something at Walmart, Walmart gets

That's not what he is saying. He is saying that Apple is closer to being a credit card company than a retailer. When you buy something at Walmart, Walmart gets a cut, and the credit card company gets a cut. But Walmart's cut covers the costs of what they add to the transaction, which includes shipping and warehousing the product, providing a store, staffing the store, providing heating and air conditioning to the store, etc etc. The credit card company presumably takes a much smaller cut, because the costs of what they add is much less. With Walmart, if the store is charging a lot over their costs, the consumer can choose another store. If the credit card company is charging too much, people can pay cash (or stores can refuse that card, etc). It isn't perfect, but at least there is some degree of competition forcing the price toward the costs of providing the various services. Ultimately the reason Apple can charge so much is because consumers have limited alternatives. Bundling, application barrier to entry, etc.