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Nearly all hand set manufactures outside if apple only make money on the device sale not on any app revenue. Are the numbers here broken down by hardware vs so
by Osiris 5y ago
Nearly all hand set manufactures outside if apple only make money on the device sale not on any app revenue.
Are the numbers here broken down by hardware vs software profits?
If not, it would seem obvious to me that Apple makes more because they can include all App Store profits after each device sale.
- robocat 5y agoAbout 50% of Apple’s profits are from the App Store by my calculations[1], although Apple makes it hard to split out App Store profits versus handset profits[2]. [1] https://news.ycombinator.com/item?id=28638939 https://news.ycombinator.com/item?id=28638939 [2] 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...
- snowwrestler 5y agoI think the math in your linked post is wrong; it looks like you’re confusing App Store revenue and Apple revenue. App Store revenue is the gross sales of the App Store. Apple takes at most 30% of that as their revenue; the rest goes to the app developers. So to calculate Apple’s profit margin for the App Store, you would compare only that Apple revenue to Apple’s actual costs of running the App Store. So their App Store profits are not 78% of $64 billion. They are 78% of at most 30% of $64 billion. So no more than $15 billion, not $50 billion.
- robocat 5y agoThank you - I think you are correct; ~15% profits from the App Store seems much more reasonable (50% seemed wrong but no one corrected me…!) Note, I think this was the source for the gross profit figure I quoted: https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-sales-around-64-billion-in-2020.html https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-s...