7 ms·

Apple runs App Store with 78% profit margin, according to court testimony

84 points by clairity 5y ago

deleted 5y ago
[deleted]
sebyx07 5y ago
force them to implement proper PWA and there your have it. There is no need for another monopolized, censorized, filled with fake reviews downloads etc store. And allow other browsers. MS bundled IE with Windows < Chrome on IOS is a Safari wrapper
- ksec 5y ago
  That is only half of story though. Adding a PWA to your HomeScreen is still troublesome. People should be able to scan a QR Code and have that Apps "installed". Except Apple already made that move with QRCode App within their App Store. Further destroying PWA chances of succeeding.
  - easton 5y ago
    I'm 90% sure that App Clips are not supposed to be a replacement for PWAs. You still have to build an entire app for the App Store, then figure out how much of it you can fit in 10MB to ship as an App Clip. PWAs don't work on iOS because of Web Push being spammy, and there are easy solutions to that problem (namely, not allowing Web Push until the app is added to the Home Screen), but Apple doesn't think that is enough.
    - ksec 5y ago
      I mean App Clip is a replacement to QRCode App as a concept in UX, not the tech. And Apple will gain an unfair advantage now they have take this step before PWA were even ( if ever ) available. Yes I agree Web Push is certainly a solvable problem. I have always maintain vast majority of Apps doesn't need to be a native app, some sort of decent Web Front End with sprinkle of Native functionality will do. Like most Web Forum, Stores' Front End etc. These business's App doesn't need Apple's curation and gatekeeping.
- Google234 5y ago
  Please never do that. PWA are 99.999% spam. See Firefox’s research on the topic. I hate every time I visit a new site and there’s some dumb pop up on my browser asking me to enable push notifications. Sometimes I miss click and end up having to go through the annoying process of removing them. Fortunately, Apple cares about its users and won’t enable a feature that is only abused for spam.
  - fragile_frogs 5y ago
    Weird, I am using Chrome on Android and 99.999% of the time I don't see a popup asking me to enable push notifications. What websites are you visiting?
    - ex3ndr 5y ago
      Chrome is a different. Chrome shows you some notifications only after you visited it couple of times or was on site couple of minutes.
  - hotz 5y ago
    I like to think of it as bad implementations and people not considering the user experience. Sometimes you just have project managers or clients who want it like that regardless of how awful it is. In that scenario I think it's the developer's responsibility to give push back. It's why I don't get asked about implementing pop-ups on homepages.
  - afavour 5y ago
    PWAs are just push notifications, it’s an entire app system. Home Screen, offline functionality, intents to share with other apps/the web, seamless updates, etc etc etc. Not to mention that the push permission problem is easily solved, indeed is _already_ solved by Google in Chrome. A lot of it is actually an improvement on APIs like AppCache that Apple originally implemented for iOS web apps! “a feature that is only abused for spam” is a wild misreading of PWAs. It’s true that they aren’t used too widely today but that’s _because_ Apple refuses to support it. I think it was a huge strategic misfire to create this PWA “brand” as it allows everyone to throw the baby out with the bathwater. The vast majority of the APIs involved make sense.
- perryizgr8 5y ago
  How about just let the user run whatever he likes on the phone he paid for? PWAs are unnecessarily complicated to mandate by law. Much easier is general stuff like your pocket supercomputer should be able to run arbitrary software.
  - kolinko 5y ago
    Allowing companies like Facebook, Google and Epic to skip App Store will end up with users having less choice, not more really. Right now you can choose an open platform, where Google, Facebook and Epic do what they want, or a closed platform that forces them to play by certain rules regarding privacy and whatnot. The moment you allow direct installs of the apps, all the big players will remove themselves from the store and prepare a versions with looser privacy standards (FB & Google), or ones that show you popups for other stuff and use processing power in the background (Epic).
    - xnyan 5y ago
      >Allowing…will end up with users having less choice, not more really Yeah, also war is peace and ignorance is strength. People should be allowed to make “bad” decisions, if they can’t it’s not really freedom.
      - olliej 5y ago
        This type of quote is getting to be a version of that "everything digresses to calling people nazi" rule. Anyway, you're presuming that people would have a choice The only reason Facebook and Google are going to have to get permission to not track you on iOS is the App Store. If they could circumvent the App Store you bet they would and the first thing to go would be those pesky privacy protections. I don't want to give my CC info to a half dozen different companies with worse data security records than Apple, but suddenly every app will require me to install another "App Store", so suddenly my choices become "share my info with dozens of companies that can sell it" vs "don't install any software" That's such a great choice you've given me.
    - perryizgr8 5y ago
- kolinko 5y ago
  In case of IE with Windows, that situation was different because Windows had a monopoly. In case of Apple, you have similar devices available from other producers with a different OS, and cheaper at that. Personally, a part of the reason I pay premium for Apple's devices is that I want a platform that is locked down, and one company that makes sure that all the others adhere to certain privacy and security standards.
intricatedetail 5y ago
That's crazy. Apple should be split into multiple independent companies and their workers should be given multi million dollar bonuses. Workers should be getting 78% of profits.
- dvh1990 5y ago
  Why?
  - k4rli 5y ago
    Surely that must have been sarcasm.
    - dvh1990 5y ago
      1. I can dig splitting up big tech companies, that can make sense in some form. 2. But why should workers get 78% of profits? Since when is that a sensible thing to do for a company?
      - intricatedetail 5y ago
        If Apple can have 78% margin, why workers cannot?
        dvh1990 5y ago
        Because free market is predicated on a business setting its margin to whatever works, aka the delta between what customers are willing to pay for the products and what it costs to run the business (salaries included). Workers get paid based on market price for their work plus some premium for skill, depends on the worker. Why should a company pay more than what workers demand? How would that make sense as a strategy? Why not use the money to expand the company instead? Or pay the shareholders? I know I'm playing devil's advocate here, but otherwise we're looking at socialism at best, weird charity at worst.
        5y ago
arvinsim 5y ago
So much for "the fee is needed to maintain the App store"
time0ut 5y ago
Maybe they should be held responsible for the scam apps they let through then. Seems like they can afford it right?
- tartoran 5y ago
  I feel the same. They charge so much to maintain the app store’s ecosystem and that’s fine as long as they take some form of responsibility.
  - NoPicklez 5y ago
    Well they do a much much better job than Android when it comes to keeping garbage apps out of its marketplace. The Google Play store is absolutely terrible.
airpoint 5y ago
> This figure comes from a court testimony from an Epic Games expert witness Ned Barnes.
syntaxing 5y ago
Not trying to defend Apple but this was said by an “expert” hired by Epic and neither 9to5 or Bloomberg have any data associated with this claim. While I’m sure the profit is nice and cushy, I have a feeling this number is like “the average server cost is X and Apple probably needs Y of these. With their revenue, they’re making more than 78%!” Which isn’t exactly how you calculated profit margin…
- rchaud 5y ago
  According to this, Apple's services business had a gross margin of 63% in 2019 [0]. The 78% figure from the court testimony may not be perfectly accurate but I can't imagine its margins are lower than than something like Apple Music. [0] https://www.investopedia.com/apple-s-5-most-profitable-lines-of-business-4684130 https://www.investopedia.com/apple-s-5-most-profitable-lines...
  - chrisandchris 5y ago
    At least the other site ending in *pedia has a list of sources. I don‘t know anything about investopedia, but I see a lot of numbers and not one source for any of the numbers at all. Not going to trust it.
    - rchaud 5y ago
      If you'd like to refute it, you're free to look at Apple's own financials.
  - rsj_hn 5y ago
    Software companies have high gross margins because the measure excludes the cost of developing and maintaining the software. So Autodesk's gross margins are 90%, Adobe's are 86%, etc. When you see numbers like that, it should tell you that you are not capturing the expenses of the company in that metric, rather than concluding the company is earning fantatiscally high profits. With Apple, the investment is in the platform, which includes everything from designing their own chips to writing their own OS and exposing and maintaining APIs for third party apps to use, as well the development costs of the infrastructure behind the app-store itself. None of those costs appear in a gross margin calculation. Not saying that Apple should or should not fall under anti-monopoly laws or that we shouldn't change our monopoly laws away from the current consumer harm focus towards more of an innovation-harm focus, but discussions of gross margin are highly misleading when assessing the expenses paid by software companies -- as is the cited article.
granshaw 5y ago
Honestly I thought it would be higher
zepto 5y ago
… said a spokesman for Epic. I.e. this is complete bullshit.

84 points by clairity 5y ago

deleted 5y ago

[deleted]

force them to implement proper PWA and there your have it. There is no need for another monopolized, censorized, filled with fake reviews downloads etc store. And allow other browsers. MS bundled IE with Windows < Chrome on IOS is a Safari wrapper

ksec 5y ago
That is only half of story though. Adding a PWA to your HomeScreen is still troublesome. People should be able to scan a QR Code and have that Apps "installed". Except Apple already made that move with QRCode App within their App Store. Further destroying PWA chances of succeeding.
- easton 5y ago
  I'm 90% sure that App Clips are not supposed to be a replacement for PWAs. You still have to build an entire app for the App Store, then figure out how much of it you can fit in 10MB to ship as an App Clip. PWAs don't work on iOS because of Web Push being spammy, and there are easy solutions to that problem (namely, not allowing Web Push until the app is added to the Home Screen), but Apple doesn't think that is enough.
  - ksec 5y ago
    I mean App Clip is a replacement to QRCode App as a concept in UX, not the tech. And Apple will gain an unfair advantage now they have take this step before PWA were even ( if ever ) available. Yes I agree Web Push is certainly a solvable problem. I have always maintain vast majority of Apps doesn't need to be a native app, some sort of decent Web Front End with sprinkle of Native functionality will do. Like most Web Forum, Stores' Front End etc. These business's App doesn't need Apple's curation and gatekeeping.
Google234 5y ago
Please never do that. PWA are 99.999% spam. See Firefox’s research on the topic. I hate every time I visit a new site and there’s some dumb pop up on my browser asking me to enable push notifications. Sometimes I miss click and end up having to go through the annoying process of removing them. Fortunately, Apple cares about its users and won’t enable a feature that is only abused for spam.
- fragile_frogs 5y ago
  Weird, I am using Chrome on Android and 99.999% of the time I don't see a popup asking me to enable push notifications. What websites are you visiting?
  - ex3ndr 5y ago
    Chrome is a different. Chrome shows you some notifications only after you visited it couple of times or was on site couple of minutes.
- hotz 5y ago
  I like to think of it as bad implementations and people not considering the user experience. Sometimes you just have project managers or clients who want it like that regardless of how awful it is. In that scenario I think it's the developer's responsibility to give push back. It's why I don't get asked about implementing pop-ups on homepages.
- afavour 5y ago
  PWAs are just push notifications, it’s an entire app system. Home Screen, offline functionality, intents to share with other apps/the web, seamless updates, etc etc etc. Not to mention that the push permission problem is easily solved, indeed is _already_ solved by Google in Chrome. A lot of it is actually an improvement on APIs like AppCache that Apple originally implemented for iOS web apps! “a feature that is only abused for spam” is a wild misreading of PWAs. It’s true that they aren’t used too widely today but that’s _because_ Apple refuses to support it. I think it was a huge strategic misfire to create this PWA “brand” as it allows everyone to throw the baby out with the bathwater. The vast majority of the APIs involved make sense.
perryizgr8 5y ago
How about just let the user run whatever he likes on the phone he paid for? PWAs are unnecessarily complicated to mandate by law. Much easier is general stuff like your pocket supercomputer should be able to run arbitrary software.
- kolinko 5y ago
  Allowing companies like Facebook, Google and Epic to skip App Store will end up with users having less choice, not more really. Right now you can choose an open platform, where Google, Facebook and Epic do what they want, or a closed platform that forces them to play by certain rules regarding privacy and whatnot. The moment you allow direct installs of the apps, all the big players will remove themselves from the store and prepare a versions with looser privacy standards (FB & Google), or ones that show you popups for other stuff and use processing power in the background (Epic).
  - xnyan 5y ago
    >Allowing…will end up with users having less choice, not more really Yeah, also war is peace and ignorance is strength. People should be allowed to make “bad” decisions, if they can’t it’s not really freedom.
    - olliej 5y ago
      This type of quote is getting to be a version of that "everything digresses to calling people nazi" rule. Anyway, you're presuming that people would have a choice The only reason Facebook and Google are going to have to get permission to not track you on iOS is the App Store. If they could circumvent the App Store you bet they would and the first thing to go would be those pesky privacy protections. I don't want to give my CC info to a half dozen different companies with worse data security records than Apple, but suddenly every app will require me to install another "App Store", so suddenly my choices become "share my info with dozens of companies that can sell it" vs "don't install any software" That's such a great choice you've given me.
  - perryizgr8 5y ago
kolinko 5y ago
In case of IE with Windows, that situation was different because Windows had a monopoly. In case of Apple, you have similar devices available from other producers with a different OS, and cheaper at that. Personally, a part of the reason I pay premium for Apple's devices is that I want a platform that is locked down, and one company that makes sure that all the others adhere to certain privacy and security standards.

intricatedetail 5y ago

That's crazy. Apple should be split into multiple independent companies and their workers should be given multi million dollar bonuses. Workers should be getting 78% of profits.

dvh1990 5y ago
Why?
- k4rli 5y ago
  Surely that must have been sarcasm.
  - dvh1990 5y ago
    1. I can dig splitting up big tech companies, that can make sense in some form. 2. But why should workers get 78% of profits? Since when is that a sensible thing to do for a company?
    - intricatedetail 5y ago
      If Apple can have 78% margin, why workers cannot?
      - dvh1990 5y ago
        Because free market is predicated on a business setting its margin to whatever works, aka the delta between what customers are willing to pay for the products and what it costs to run the business (salaries included). Workers get paid based on market price for their work plus some premium for skill, depends on the worker. Why should a company pay more than what workers demand? How would that make sense as a strategy? Why not use the money to expand the company instead? Or pay the shareholders? I know I'm playing devil's advocate here, but otherwise we're looking at socialism at best, weird charity at worst.
        5y ago

arvinsim 5y ago

So much for "the fee is needed to maintain the App store"

time0ut 5y ago

Maybe they should be held responsible for the scam apps they let through then. Seems like they can afford it right?

tartoran 5y ago
I feel the same. They charge so much to maintain the app store’s ecosystem and that’s fine as long as they take some form of responsibility.
- NoPicklez 5y ago
  Well they do a much much better job than Android when it comes to keeping garbage apps out of its marketplace. The Google Play store is absolutely terrible.

airpoint 5y ago

> This figure comes from a court testimony from an Epic Games expert witness Ned Barnes.

syntaxing 5y ago

Not trying to defend Apple but this was said by an “expert” hired by Epic and neither 9to5 or Bloomberg have any data associated with this claim. While I’m sure the profit is nice and cushy, I have a feeling this number is like “the average server cost is X and Apple probably needs Y of these. With their revenue, they’re making more than 78%!” Which isn’t exactly how you calculated profit margin…

rchaud 5y ago
According to this, Apple's services business had a gross margin of 63% in 2019 [0]. The 78% figure from the court testimony may not be perfectly accurate but I can't imagine its margins are lower than than something like Apple Music. [0] https://www.investopedia.com/apple-s-5-most-profitable-lines-of-business-4684130 https://www.investopedia.com/apple-s-5-most-profitable-lines...
- chrisandchris 5y ago
  At least the other site ending in *pedia has a list of sources. I don‘t know anything about investopedia, but I see a lot of numbers and not one source for any of the numbers at all. Not going to trust it.
  - rchaud 5y ago
    If you'd like to refute it, you're free to look at Apple's own financials.
- rsj_hn 5y ago
  Software companies have high gross margins because the measure excludes the cost of developing and maintaining the software. So Autodesk's gross margins are 90%, Adobe's are 86%, etc. When you see numbers like that, it should tell you that you are not capturing the expenses of the company in that metric, rather than concluding the company is earning fantatiscally high profits. With Apple, the investment is in the platform, which includes everything from designing their own chips to writing their own OS and exposing and maintaining APIs for third party apps to use, as well the development costs of the infrastructure behind the app-store itself. None of those costs appear in a gross margin calculation. Not saying that Apple should or should not fall under anti-monopoly laws or that we shouldn't change our monopoly laws away from the current consumer harm focus towards more of an innovation-harm focus, but discussions of gross margin are highly misleading when assessing the expenses paid by software companies -- as is the cited article.

granshaw 5y ago

Honestly I thought it would be higher

zepto 5y ago

… said a spokesman for Epic. I.e. this is complete bullshit.