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 f

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.