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> Their income is from selling physical devices. Not entirely true anymore: 1) About $8-12 billion paid by Google to have their search engine default. [1] 2)

> Their income is from selling physical devices. Not entirely true anymore: 1) About $8-12 billion paid by Google to have their search engine default. [1] 2) About $20 billion from their 15-30% cut of third party app developers. Where the App Store is protected from competition. [2] 3) Apple services (like Apple TV+), which collects usage data for itself and third parties. [3] [1] https://www.macrumors.com/2020/10/25/google-apple-search-default-8-12-billion/ https://www.macrumors.com/2020/10/25/google-apple-search-def... [2] https://www.theverge.com/2020/6/15/21292203/apple-app-store-ios-apps-billings-revenue-517-billion-2019-antitrust-regulation https://www.theverge.com/2020/6/15/21292203/apple-app-store-... [3] https://support.apple.com/en-us/HT208511 https://support.apple.com/en-us/HT208511

pwinnski 6y ago
Apple revenue for the last year was $275 billion. So you've listed 3.5%, 7%, and probably-rounds-to-0% of their revenue, which doesn't seem like it actually counters the original point.
- fbelzile 6y ago
  As you correctly point out, those are revenue figures, not profit. $10 billion from Google out of $60 billion in profit is significant. Apple saying they 'care' about privacy while making +15% of its profits from Google alone is hypocritical.
  - t-writescode 6y ago
    You just spun terms in your own comment. > those are revenue figures, not profit > $10 billion from Google out of $60 billion in profit is significant
    - orangepanda 6y ago
      What expenses are there to keep google the default engine?
      - t-writescode 6y ago
        I'm not sure this is the correct question. Every company has cost centers and profit centers. Historically, for example, Playstations were sold at a loss and the games were sold at a profit and a licensing fee to offset that loss. In the more modern world, Steam and Apple and Epic Games all charge a percentage-based commission for the games and in-app purchases their games have (at least some of them charge the latter). The cost of keeping the game in their catalog is very low compared to the price they charge. The markup is very high; but, it does offset development costs throughout the company. Those development costs may or may not help drive traffic or even use the services that the money-making services boulster, but the money-making services do help pay for it.
      - sharkjacobs 6y ago
        Revenue and profit measure the total income of a business, not just one discrete business deal. If they stop making, marketing, and selling hundreds of millions of iPhones Google would probably stop paying them for default search status.
  - zepto 6y ago
    Why? Are you saying they shouldn’t have Google as the default search engine?
  - rekoil 6y ago
    At the end of the day it's just an option that users can easily choose to opt out of. As much as I would like them to default to and support DuckDuckGo instead (hell, it would be a match made in heaven if Apple were to buy DDG and make it their privacy centrepiece), a lot of people would be confused if they got DDG instead of Google, so I don't really think it's fair to make it out as some "chink in the armour". It's a business win-win in my eyes and doesn't affect me at all.
alwillis 6y ago
The vast majority of Apple's revenue is from selling hardware. Yes, there's revenue from services, which is growing fast. The trailing 12 month revenue for Mac, iPhone, iPad and Apple Watch (+ HomePod, AirPods, etc.) was over $220 billion. And while $20 billion is not nothing, it's actually not that big a deal for Apple, especially when you consider its $2 trillion market cap.
- forrestthewoods 6y ago
  You’re mixing a lot of numbers there. Apple makes about 60 billion a year in the profit. The 10 billion they get from Google constitutes 16% of their annual profit. That’s significant! Apple trades at a 37x P/E ratio. An additional $20B profit could be worth about an additional $760 billion in market cap. You can’t dismiss 10 billion in pure profit because their market cap. Those numbers are directly related and far closer in meaning than you give credit.
  - wyattpeak 6y ago
    > The 10 billion they get from Google constitutes 16% of their annual profit. You're playing funny buggers with figures there. According to your standard the sales of physical devices constitutes over 350% of their annual profit.
    - forrestthewoods 6y ago
      Yes, gross revenue is larger than net income. Particularly when manufacturing is involved. The $10B Google money is basically pure profit. It costs Apple nothing. Maybe a few million in lawyer time to negotiate the fee each year. Hardware sales generates enormous revenue and also very large profit. I believe more than half of Apple’s profit is still hardware sales. But they’re working very hard to increase their services income.
      - wyattpeak 6y ago
        > The $10B Google money is basically pure profit. It costs Apple nothing. If they didn't spend all that money on producing the phones they'd have nothing to sell to Google. You can't meaningfully divorce the two, all profit centres of a business rely on the cost centres.
thewebcount 6y ago
> 1) About $8-12 billion paid by Google to have their search engine default. And Mozilla, who wrote this article, also gets the majority of their funding through paid search, mostly from Google. > Precisely 94% of Mozilla revenues came through royalties received by search engines to be featured on its Mozilla Firefox browser.[0] [0] https://fourweekmba.com/how-does-mozilla-make-money/ https://fourweekmba.com/how-does-mozilla-make-money/

pwinnski 6y ago

Apple revenue for the last year was $275 billion. So you've listed 3.5%, 7%, and probably-rounds-to-0% of their revenue, which doesn't seem like it actually counters the original point.

fbelzile 6y ago
As you correctly point out, those are revenue figures, not profit. $10 billion from Google out of $60 billion in profit is significant. Apple saying they 'care' about privacy while making +15% of its profits from Google alone is hypocritical.
- t-writescode 6y ago
  You just spun terms in your own comment. > those are revenue figures, not profit > $10 billion from Google out of $60 billion in profit is significant
  - orangepanda 6y ago
    What expenses are there to keep google the default engine?
    - t-writescode 6y ago
      I'm not sure this is the correct question. Every company has cost centers and profit centers. Historically, for example, Playstations were sold at a loss and the games were sold at a profit and a licensing fee to offset that loss. In the more modern world, Steam and Apple and Epic Games all charge a percentage-based commission for the games and in-app purchases their games have (at least some of them charge the latter). The cost of keeping the game in their catalog is very low compared to the price they charge. The markup is very high; but, it does offset development costs throughout the company. Those development costs may or may not help drive traffic or even use the services that the money-making services boulster, but the money-making services do help pay for it.
    - sharkjacobs 6y ago
      Revenue and profit measure the total income of a business, not just one discrete business deal. If they stop making, marketing, and selling hundreds of millions of iPhones Google would probably stop paying them for default search status.
- zepto 6y ago
  Why? Are you saying they shouldn’t have Google as the default search engine?
- rekoil 6y ago
  At the end of the day it's just an option that users can easily choose to opt out of. As much as I would like them to default to and support DuckDuckGo instead (hell, it would be a match made in heaven if Apple were to buy DDG and make it their privacy centrepiece), a lot of people would be confused if they got DDG instead of Google, so I don't really think it's fair to make it out as some "chink in the armour". It's a business win-win in my eyes and doesn't affect me at all.

alwillis 6y ago

The vast majority of Apple's revenue is from selling hardware. Yes, there's revenue from services, which is growing fast. The trailing 12 month revenue for Mac, iPhone, iPad and Apple Watch (+ HomePod, AirPods, etc.) was over $220 billion. And while $20 billion is not nothing, it's actually not that big a deal for Apple, especially when you consider its $2 trillion market cap.

forrestthewoods 6y ago
You’re mixing a lot of numbers there. Apple makes about 60 billion a year in the profit. The 10 billion they get from Google constitutes 16% of their annual profit. That’s significant! Apple trades at a 37x P/E ratio. An additional $20B profit could be worth about an additional $760 billion in market cap. You can’t dismiss 10 billion in pure profit because their market cap. Those numbers are directly related and far closer in meaning than you give credit.
- wyattpeak 6y ago
  > The 10 billion they get from Google constitutes 16% of their annual profit. You're playing funny buggers with figures there. According to your standard the sales of physical devices constitutes over 350% of their annual profit.
  - forrestthewoods 6y ago
    Yes, gross revenue is larger than net income. Particularly when manufacturing is involved. The $10B Google money is basically pure profit. It costs Apple nothing. Maybe a few million in lawyer time to negotiate the fee each year. Hardware sales generates enormous revenue and also very large profit. I believe more than half of Apple’s profit is still hardware sales. But they’re working very hard to increase their services income.
    - wyattpeak 6y ago
      > The $10B Google money is basically pure profit. It costs Apple nothing. If they didn't spend all that money on producing the phones they'd have nothing to sell to Google. You can't meaningfully divorce the two, all profit centres of a business rely on the cost centres.

thewebcount 6y ago

> 1) About $8-12 billion paid by Google to have their search engine default. And Mozilla, who wrote this article, also gets the majority of their funding through paid search, mostly from Google. > Precisely 94% of Mozilla revenues came through royalties received by search engines to be featured on its Mozilla Firefox browser.[0] [0] https://fourweekmba.com/how-does-mozilla-make-money/ https://fourweekmba.com/how-does-mozilla-make-money/