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> That’s why iPhones cost so much. I don’t see why they can’t just sell phones and let people decide on software if they want. Three things come to mind: 1. S
by pknomad 3y ago
> That’s why iPhones cost so much. I don’t see why they can’t just sell phones and let people decide on software if they want.
Three things come to mind:
1. Supporting a diverse ecosystem is hard and expensive.
2. It's easier to build a seamless platform when you have control over hardware and software. Look at Mac trackpad as an example; it's pretty much beats any PC trackpads.
3. Software sales is where the money is at. I used to work for a dell subsidiary and it was a common knowledge that Dell (and other vendors too) sold servers at a loss and made it up on software and support contracts. Apple has like ~80% profit margins on app store sales which is insane.
- LexGray 3y agoThat ~80% figure comes from an Epic argument. At that time Apple had argued the number was completely wrong and they were going to refute. I do not see any article online with an updated number, but it is almost certainly wrong. It is super annoying the tech bloggers never pestered Apple to reveal what they said they were going to. Historically Apple always has adjusted the quality of the product to match desired 35% margins and price points. I would be very surprised if the App Store is any different, although they may have had issues ramping up to eat that much money. Apple gouges users... but they tend to gouge consistently. The other 65% likely includes costs like advertising, cloud services, editorials, legal, fraud costs, WWDC, corporate overhead and the like but it far more than just hosting and evaluation costs. They may be blowing it on Apple TV+ content though. Services is a tricky number to nail down.
- pknomad 3y agoGotcha. You still want to preserve that margin anyway.