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Do you have access to information the rest of us don't? Apple doesn't release the operational details of its AppStore in its financial disclosures. Shocking you

by ctvo 6y ago

Do you have access to information the rest of us don't? Apple doesn't release the operational details of its AppStore in its financial disclosures. Shocking you know a 10% fee isn't enough to maintain it. How about we do what's often suggested: we spin the AppStore off as its own non-profit governing body and they can disclose their operating costs and increase / decrease their fee as needed. The rules then apply equally to Apple vs. non-Apple companies.

valuearb 6y ago
Apple breaks out a services line in their financial reports. You should read them. Services has a gross margin of around 67-68%, but that includes a $9B check from Google every year with near 100% margins. So the App Store is very likely to be less than 67%, maybe as low as 15%. It’s not just payment processing. They provide other critically valuable services to developers such as App Review, Hosting, International Distribution, CoMarketing, Store APIs, Security, etc, etc, and they all have thousands of employees and cost billions to provide.
- ctvo 6y ago
  Please provide anything to back up these claims. Until you provide something, here's a breakdown from Forbes of an estimate of Apple's App Store revenue in 2019: https://dashboards.trefis.com/no-login-required/7JGMQ7wT/Breaking-Down-Apple-s-Services-Revenue- https://dashboards.trefis.com/no-login-required/7JGMQ7wT/Bre... (there's an adjustment to the take percentage to see their estimated revenue if it's lowered, feel free to play around with it) Apple Services: - AppStore $ 15 billion - Licencing $ 10 billion - Apple Care & Others $ 7.5 billion - Apple Music $ 5.4 billion - iCloud $ 4.5 billion - Third-Party Subscriptions $ 3.6 billion Total: $46 billion Remember, you're stating that Apple isn't able break even at a 10% fee for the App Store. Recall that Apple charges developers a yearly subscription (99 USD for non-enterprise accounts per year) to be able to submit something to the App Store. And additionally remember that your "co-marketing" cost should include the money Apple makes from advertisers on its App Store [1]. The items you mentioned as costs are standard for many similar internet service (hosting, security, customer APIs, etc. etc,.) that do not make nearly the amount of revenue Apple does with its App Store. Let's do a worst case and cut Apple's estimated App Store revenue from $15 billion to $5 billion a year to show how ridiculous the claim that they can't break even is. 1 - https://searchads.apple.com/ https://searchads.apple.com/
  - valuearb 6y ago
    Read their financials, the gross margins for services are listed in every one of their reports. And the $99 and ad revenues are service revenues. So their audited financials say, taking all of those revenues, that services expenses are roughly 32% of their revenues. Obviously this doesn’t include administration costs, interest costs or taxes. 32% of 30% is 9.6%, so it’s possible that’s their break even level, or even a little lower if App Store margins are higher than other services. But it’s unlikely because it’s likely the billions in the Google Safari placement check is close to 100% margin, meaning the rest of services has to have margins well under 68%.

by ctvo 6y ago

valuearb 6y ago

Apple breaks out a services line in their financial reports. You should read them. Services has a gross margin of around 67-68%, but that includes a $9B check from Google every year with near 100% margins. So the App Store is very likely to be less than 67%, maybe as low as 15%. It’s not just payment processing. They provide other critically valuable services to developers such as App Review, Hosting, International Distribution, CoMarketing, Store APIs, Security, etc, etc, and they all have thousands of employees and cost billions to provide.

ctvo 6y ago
Please provide anything to back up these claims. Until you provide something, here's a breakdown from Forbes of an estimate of Apple's App Store revenue in 2019: https://dashboards.trefis.com/no-login-required/7JGMQ7wT/Breaking-Down-Apple-s-Services-Revenue- https://dashboards.trefis.com/no-login-required/7JGMQ7wT/Bre... (there's an adjustment to the take percentage to see their estimated revenue if it's lowered, feel free to play around with it) Apple Services: - AppStore $ 15 billion - Licencing $ 10 billion - Apple Care & Others $ 7.5 billion - Apple Music $ 5.4 billion - iCloud $ 4.5 billion - Third-Party Subscriptions $ 3.6 billion Total: $46 billion Remember, you're stating that Apple isn't able break even at a 10% fee for the App Store. Recall that Apple charges developers a yearly subscription (99 USD for non-enterprise accounts per year) to be able to submit something to the App Store. And additionally remember that your "co-marketing" cost should include the money Apple makes from advertisers on its App Store [1]. The items you mentioned as costs are standard for many similar internet service (hosting, security, customer APIs, etc. etc,.) that do not make nearly the amount of revenue Apple does with its App Store. Let's do a worst case and cut Apple's estimated App Store revenue from $15 billion to $5 billion a year to show how ridiculous the claim that they can't break even is. 1 - https://searchads.apple.com/ https://searchads.apple.com/
- valuearb 6y ago
  Read their financials, the gross margins for services are listed in every one of their reports. And the $99 and ad revenues are service revenues. So their audited financials say, taking all of those revenues, that services expenses are roughly 32% of their revenues. Obviously this doesn’t include administration costs, interest costs or taxes. 32% of 30% is 9.6%, so it’s possible that’s their break even level, or even a little lower if App Store margins are higher than other services. But it’s unlikely because it’s likely the billions in the Google Safari placement check is close to 100% margin, meaning the rest of services has to have margins well under 68%.