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Apple's revenue stream isn't as tied to internet advertising as any of its large competitors. They sell products. And also an ecosystem around those products.

by ohashi 5y ago

Apple's revenue stream isn't as tied to internet advertising as any of its large competitors. They sell products. And also an ecosystem around those products. The two for one of hurting competitors and making customers happy is about as good a play as they could make. It makes making the 'right' decision easy. Blocking facebook from tracking everything we do online is a win most people can appreciate, except Facebook (and potentially some advertisers taking advantage of it).

deadmutex 5y ago
> Apple's revenue stream isn't as tied to internet advertising as any of its large competitors I am curious what your take on this is: https://9to5mac.com/2021/08/25/analysts-google-to-pay-apple-15-billion-to-remain-default-safari-search-engine-in-2021/ https://9to5mac.com/2021/08/25/analysts-google-to-pay-apple-...
- ohashi 5y ago
  Free money. They don't even have to develop the ad business.
robocat 5y ago
> Apple's revenue stream isn't as tied to internet advertising Actually a significant percentage of Apple’s profit comes from free-to-play iPhone games, which contain a lot of adverts. Grabbing some figures from different sources: * “Apple reported a profit of $23.6 billion in its second quarter, on record sales of $89.6” * “According to the ruling, gaming apps account for approximately 70% of all App Store revenue. That 70% is generated by less than 10% of all App” * “Barnes calculated that the App Store had hefty profit margins, which increased to 78% in 2019” * “Apple's App Store had gross sales around $64 billion last year” 78% of 64G$ is ~50G$, and 23.6G$ x4 is ~95G$, so let us say that 50% of profits come from the App Store. I would guess that at least 25% of Apple profits come indirectly from in app advertising for apps related to in-app-purchases. You know, those annoying adverts in free games, that are mostly nothing like YouTube adverts, because the highest payout for the adverts is by advertising gambling and pay to play games. The adverts pay well because the in app purchases pay developers well, and Apple takes their cut from that. Note that Apple do not provide a clear breakdown of App Store profits compared to iPhone sales profits: https://www.marketwatch.com/story/how-profitable-is-apples-app-store-even-a-landmark-antitrust-trial-couldnt-tell-us-11622224506 https://www.marketwatch.com/story/how-profitable-is-apples-a...
- helsinkiandrew 5y ago
  > I would guess that at least 25% of Apple profits come indirectly from in app advertising for apps related to in-app-purchases With that logic you could say that nearly all Apples profits come indirectly from advertising as they trigger people to buy hardware, apps and services. If people spend x hours and $10 a month on in-app purchases on their favourite game and that game was taken away, many would just spend the time and $10 on another game - ie Apple will always get their share, the ads just help decide which app developer gets the rest.
- viktorcode 5y ago
  Games that run advertisement don't pay Apple a single cent out of their ad revenues.
  - celticninja 5y ago
    but they will generate advertising revenue for Apple. Just like the developer gets cut of the advertising so does Apple. The developer isn't paying but the advertisers certainly are.
    - mzkply 5y ago
      Apple gets a cut of a Google ad in an iOS app?
    - dangerface 5y ago
      Its not advertising revenue unless the revenue is generated by selling advertising.
    - sidlls 5y ago
      How do you figure? 100% of in-app advertising goes to the split between the ad provider and the developer. Apple doesn't get 1 cent from that (unless the ad comes from Apple, obviously).
      - charwalker 5y ago
dillondoyle 5y ago
Apple does run a very large ad network themselves in the app store. They tried to run their own 'traditional' ad network and failed, so I agree with parent this is a business decision. The article has multiple mentions of an upcoming broader Apple network? Is there any solid information on that? They could win big $ if they rolled out a universal ID and controlled the infra/bids. Similar to their login button, it could be a more privacy focused UUID that users can revoke or maybe partition. Would love to see their marketing sell this as groundbreaking privacy lol
parthdesai 5y ago
> Apple's revenue stream isn't as tied to internet advertising It's tied to China instead, an outstanding example of human rights. Yay Apple :)

by ohashi 5y ago

deadmutex 5y ago

> Apple's revenue stream isn't as tied to internet advertising as any of its large competitors I am curious what your take on this is: https://9to5mac.com/2021/08/25/analysts-google-to-pay-apple-15-billion-to-remain-default-safari-search-engine-in-2021/ https://9to5mac.com/2021/08/25/analysts-google-to-pay-apple-...

ohashi 5y ago
Free money. They don't even have to develop the ad business.

robocat 5y ago

> Apple's revenue stream isn't as tied to internet advertising Actually a significant percentage of Apple’s profit comes from free-to-play iPhone games, which contain a lot of adverts. Grabbing some figures from different sources: * “Apple reported a profit of $23.6 billion in its second quarter, on record sales of $89.6” * “According to the ruling, gaming apps account for approximately 70% of all App Store revenue. That 70% is generated by less than 10% of all App” * “Barnes calculated that the App Store had hefty profit margins, which increased to 78% in 2019” * “Apple's App Store had gross sales around $64 billion last year” 78% of 64G$ is ~50G$, and 23.6G$ x4 is ~95G$, so let us say that 50% of profits come from the App Store. I would guess that at least 25% of Apple profits come indirectly from in app advertising for apps related to in-app-purchases. You know, those annoying adverts in free games, that are mostly nothing like YouTube adverts, because the highest payout for the adverts is by advertising gambling and pay to play games. The adverts pay well because the in app purchases pay developers well, and Apple takes their cut from that. Note that Apple do not provide a clear breakdown of App Store profits compared to iPhone sales profits: https://www.marketwatch.com/story/how-profitable-is-apples-app-store-even-a-landmark-antitrust-trial-couldnt-tell-us-11622224506 https://www.marketwatch.com/story/how-profitable-is-apples-a...

helsinkiandrew 5y ago
> I would guess that at least 25% of Apple profits come indirectly from in app advertising for apps related to in-app-purchases With that logic you could say that nearly all Apples profits come indirectly from advertising as they trigger people to buy hardware, apps and services. If people spend x hours and $10 a month on in-app purchases on their favourite game and that game was taken away, many would just spend the time and $10 on another game - ie Apple will always get their share, the ads just help decide which app developer gets the rest.
viktorcode 5y ago
Games that run advertisement don't pay Apple a single cent out of their ad revenues.
- celticninja 5y ago
  but they will generate advertising revenue for Apple. Just like the developer gets cut of the advertising so does Apple. The developer isn't paying but the advertisers certainly are.
  - mzkply 5y ago
    Apple gets a cut of a Google ad in an iOS app?
  - dangerface 5y ago
    Its not advertising revenue unless the revenue is generated by selling advertising.
  - sidlls 5y ago
    How do you figure? 100% of in-app advertising goes to the split between the ad provider and the developer. Apple doesn't get 1 cent from that (unless the ad comes from Apple, obviously).
    - charwalker 5y ago

dillondoyle 5y ago

Apple does run a very large ad network themselves in the app store. They tried to run their own 'traditional' ad network and failed, so I agree with parent this is a business decision. The article has multiple mentions of an upcoming broader Apple network? Is there any solid information on that? They could win big $ if they rolled out a universal ID and controlled the infra/bids. Similar to their login button, it could be a more privacy focused UUID that users can revoke or maybe partition. Would love to see their marketing sell this as groundbreaking privacy lol

parthdesai 5y ago

> Apple's revenue stream isn't as tied to internet advertising It's tied to China instead, an outstanding example of human rights. Yay Apple :)