6 ms·

Margin Call

160 points by zdw 9mo ago

marcusestes 9mo ago
That's too much margin. They're trading net profits for user happiness and it's hurting their brand more than they understand. The app store cartel must fall.
- aucisson_masque 9mo ago
  The competition is limited to android and Google is sabotaging every advantage they held against Apple. Customization is lost, freedom is lost, even the smartphones prices are now similar to iPhones. Pixels sell for premium price nowadays.
  - varispeed 9mo ago
    [dead]
  - decimalenough 9mo ago
    The sad truth is the average user couldn't care less about "customization" (unless you're talking about background images), much less "freedom". Pixel has always been the flagship and priced to match. Unlike Apple, there are plenty of Android phones at all price points.
- irl_zebra 9mo ago
  imo the app store thing is very niche and only affects a small, vocal group that tends to sit on hacker news and pay attention to these things. Can almost guarantee that 95% of the iphone-having population does not know/care about the app store "issue." I do think the general decline in quality and uptick in bugs will bite them slowly, at least once there's an iphone competitor of note.
  - deleted 9mo ago
    [deleted]
  - marcusestes 9mo ago
    It affects everyone, because the aggressive revenue cut prevents entire categories of apps and services from being published to the app store. An app store with a 5-10% cut would be an app store with a much richer choice of apps.
    - ericmay 9mo ago
      What are some examples of the categories of apps and services that aren't publishable on the App Store due to Apple's services revenue? > An app store with a 5-10% cut would be an app store with a much richer choice of apps. Why? And how are you defining "rich". Rich in quality? Quantity? Something else?
      - cyberax 9mo ago
        > What are some examples of the categories of apps and services that aren't publishable on the App Store due to Apple's services revenue? For example, Apple refuses to allow Peertube app onto the App Store. Peertube is a free version of Youtube with peer-to-peer file transfer acceleration. That's because you can use it to (bring out smelling salts!) watch porn. If you connect it to a private Peertube instance. Another example, Apple is not allowing an eBook reader app (FBReader) with full OPDS support. Because you can use OPDS to buy books in third-party stores. I'm using OPDS to get books from my own Calibre Web library, btw. These are just the ones I can list off the top of my head. No doubt there are others.
        techpression 9mo ago
        I don’t think it’s that simple, they allow Reddit, which Is filled to the brim with porn, and other ver ”non Apple” things. They also allow plenty of comic book readers that open files from almost every possibly conceivable source. Not to mention a lot of video players that can play porn of course. Is it inconsistent and frustrating, very much so, and certain apps get an unfair treatment for sure, but I don’t think it’s as simple as that ”if app can do x then it’s banned”.
        9mo ago
  - candiddevmike 9mo ago
    Most folks don't realize they're paying (up to) an extra 30% to Apple on everything they purchase in the app store. On top of an already exorbitant device price. I'm sure you'd see more outrage if you had the app price listed without the fee, and then showed the fee below it/at time of purchase. It's another hidden fee.
    - no_wizard 9mo ago
      They aren't because companies refuse to price discriminate. There are some exceptions, like Spotify where they called it out in a public space that the in app subscriptions were more than if you bought directly. However, I have noticed that its very rare. In every other case I've looked into, from Omni apps to streaming apps like Netflix, I'm paying the same either way, and often with a more convienent way of managing the subscription. Thereby, I think it goes undetected by most, because price comparing the app store to the non app store price will yield the same price most of the time. Though importantly, I have noticed, it is not always the same options. For example, regarding Netflix, I am paying the same price for my sub via Apple but new and returning customers can no longer pay for it this way, they must go to the website now. I also can't add additional members (effectively discounted second subs) either. This has to do with the fact Apple did captiulate to allowing companies link to their own subscription pages and actually allow customers to be directed in that way with clearer and transparent language. However, I have noticed most apps with the exception of large streaming platforms have done away completely with in app subscriptions, and the prices are still the same whether its the web or via in app purchases on Apple's platform. However, Google Play is no better in this regard. Even though they allow 3rd party payment processing as an alternative to using Google's payment processing, it has not lead to apps being cheaper on their platform, in the majority of cases. Which makes me wonder if the value is still there for a 1st party payment processor, or something else.
  - dyauspitr 9mo ago
    I don’t even know what the “issue” is. I’m guessing it’s the 30% they take because it’s definitely not the quality and range of apps they offer.
  - SoftTalker 9mo ago
    I haven't ever purchased a single thing in the App Store or in-app so I guess I don't care. But it does seem like a monopoly and something that should be forced to allow competition.
  - esseph 9mo ago
    > at least once there's an iphone competitor of note. What does this even mean? Do you mean in the US or globally? By units sold, by platform, globally: Android ~885 Million ~71% iOS (iPhone) ~247 Million ~20% HarmonyOS & Others ~118 Million ~9%
    - irl_zebra 9mo ago
      A device manufacturer/company that makes people who have iphones seriously consider swapping to the new company's offering. It is such a small tail of people who have an iphone and seriously consider moving to Android, with maybe Samsung being the highest quality and most attractive with Pixel also being pretty cool. I don't know what HarmonyOS is and I am pretty tech savvy. I think any company can make an ultra low spec phone and ship Android on it and get people to buy it on the basis of cost alone, but those people aren't cross-shopping iphones, so they're not a notable comparison. Arguably, with the exception of maybe high end Samsung and Pixel phones, Android phones and others are basically a whole different product category.
      - esseph 9mo ago
        > I don't know what HarmonyOS is and I am pretty tech savvy. https://en.wikipedia.org/wiki/HarmonyOS https://en.wikipedia.org/wiki/HarmonyOS
- amelius 9mo ago
  That's what you get with shareholders ...
- PunchyHamster 9mo ago
  It's a bit of Valve situation, the competition just refuses to make better product
  - benoau 9mo ago
    No. The "competition" is artificially limited to buying an Android phone, and mobility between platforms can be very complicated, not by accident, while apps like Patreon can simply be forced to comply with massive fees even if it makes their service much more expensive. Stripe, PayPal and a bag full of other payment options would be able to compete just fine with IAP and its fees.
- crazygringo 9mo ago
  What evidence is there that it's hurting their brand? Outside of HN I see zero complaints. And the situation has been going on for a while. I might not like it, but it seems perfectly fine for their brand as far as I can tell.
  - latexr 9mo ago
    I see a lot of complaints outside of HN. For starters, not every nerd, and not even every Apple nerd, is on HN. Outside of that, even my non-tech-savvy acquaintances have been complaining as of late. Is it enough of a damaged brand to hurt their profits as of now? Clearly not. But cracks are forming. Apple’s brand isn’t damaged when they’re seen as bad, but when they’re seen as the same as everyone else.
    - crazygringo 9mo ago
      > Outside of that, even my non-tech-savvy acquaintances have been complaining as of late. What do they say? I'm genuinely curious. Because e.g. I don't have the slightest idea what percentage Microsoft takes on Xbox games, nor would it ever occur to me to complain about it. I know there's a business model there, but it's not something I think about. And I feel like that's the way people outside of tech feel about whatever percentage Apple takes out of its App Store. But what am I missing?
      - latexr 9mo ago
        The important bit is “trading net profits for user happiness”. Non-tech-savvy users aren’t complaining about Apple’s margins for apps, but about the things Apple is doing to degrade their experience in the name of profit. Namely excessive ads on the App Store, on System Settings, and on Apple Apps themselves such as Music and Wallet (F1).
        malshe 9mo ago
        Yeah but again that’s all here on HN. I have plenty of friends who are not on HN and I haven’t heard anyone ever complain about these things.
- raincole 9mo ago
  > hurting their brand more than they understand Among perhaps the 1% super tech savvy users. I never heard anyone who wants to sideload apps outside online (not even from other programmers I know in real life. Ones who care like much always have been using rooted android from day 1.)
- PlatoIsADisease 9mo ago
  Brand name? Apple is a faux-Veblean good targeting lower middle class people, moms, and teens (Who pretend the $50/mo payments are expensive). Its a demonstration of wealth.
  - no_wizard 9mo ago
    I don't think the sell through of Android phones to the wealthiest has been all that high. Celebs, top business execs, even heads of nations state are most often seen with Apple devices in their hands. I'm sure not in every case, but even as far back as 2018 the trend line of wealth and iPhone ownership was high. Even today most app store developers admit that iPhone users tend to have more disposable income by a good margin. Really, when I do a cursory google search of wealthy public figures that include them holding their devices, what I can find is they're clearly holding iPhones most of the time.
    - PlatoIsADisease 9mo ago
      I didn't say anything about wealth and android usage. Different usecases. I did mention wealth and iphone usage. An insecure teen, mom, or middle income person needs an iphone for status.
- arealaccount 9mo ago
  IMHO as a user I prefer purchasing via app store because it avoids all of the dark patterns companies use to prevent subscriptions or returns. I get that it sucks that the honest folks have to pay a 30% fees I'd be happy to pay a 30% premium on my app store purchases just for the ability to unsubscribe without dark patterns.
  - ebbi 9mo ago
    I like the fact that when deleting an app, it reminds you about existing subscriptions related to that app, and offers to take you to the subscriptions page to unsubscribe. In saying that, I don't think I'm personally prepared to pay an additional 30% for that. It should just be what is expected as part of good business practice.
caminante 9mo ago
You're editorializing the headline, aside from your vague phrasing for "margin" (actually gross margin) and "Services [segment]" which has had gross margins >66% since FY20. Better to reflect the actual headline and then add a comment. edit: This is the SaaS division. Similar at GOOG, MSFT, CRM, etc. have similar gross margins.
- BoredPositron 9mo ago
  I don't understand what you want to say with your comment.
  - bilbo0s 9mo ago
    Meh. On one level, it's fair. If everyone has similar services margins, then it's, at one level, disingenuous to single out Apple. At the same time, I have to say that, to my mind, the comment is whatabout-ism. Right now we're talking about Apple. Maybe we can broaden the discussion? I'm fine with that. But we'd still be talking about Apple as part of that discussion.
  - caminante 9mo ago
    Have you read the HN guidelines?
    - BoredPositron 9mo ago
      insert spiderman meme
      - caminante 9mo ago
        And that's a "no."
        BoredPositron 9mo ago
        insert spiderman meme
- 9mo ago
benoau 9mo ago
Not a huge surprise, there's an iCloud antitrust alleging a 78% gross profit margin: https://storage.courtlistener.com/recap/gov.uscourts.cand.425656/gov.uscourts.cand.425656.1.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.cand.42... The Epic legal case ruling cites a 75% profit margin on App Store fees: https://storage.courtlistener.com/recap/gov.uscourts.cand.364265/gov.uscourts.cand.364265.812.0_3.pdf https://storage.courtlistener.com/recap/gov.uscourts.cand.36... And of course, their 36% share of Google Ad revenue revealed in Google's antitrust has to be approximately 100% profit: https://www.cnbc.com/2023/11/14/google-pays-apple-36percent-of-safari-search-revenue-sundar-pichai.html https://www.cnbc.com/2023/11/14/google-pays-apple-36percent-...
- jbverschoor 9mo ago
  Epic should take a look in the mirror first
  - zaptrem 9mo ago
    What did Epic do?
    - tancop 9mo ago
      paying for store exclusives mostly. it was a big deal when borderlands 3 dropped in 2019 and again with alan wake 2 in 2023. its kinda hypocritical when you keep talking about competition and how its important to fight monopolies then come up with a $150M exclusivity deal instead of actually competing with steam.
      - wavemode 9mo ago
        Setting aside whether paying for store exclusives is right or wrong (personally I don't see anything wrong with it), what does that have to do with the Apple discussion? The problem with Apple is specifically that they use their dominant market position to force anti-competitive terms on other companies. Has Epic been bullying companies into accepting their deals? You can sell a game anywhere, Epic has no leverage in this respect.
gigatexal 9mo ago
Yea. I saw that too. One day all the hardware will be loss leaders for services revenues.
- kergonath 9mo ago
  That would be a shame, because that’d put Apple’s interests completely at odds with mine. Using Linux would not be too much of a hurdle, but there aren’t really any better phones or tablets. I am not going to jump from the Apple pan into the Google fire.
  - gigatexal 9mo ago
    Oh don’t get me wrong: I love the Apple hardware. It’s by far some of the best on the market. The attention to detail and workmanship is why I buy them. I just don’t know how they will avoid the push to move everything into services and only see hardware as a means to an end that end being more services revenue. They’ll become IBM then :(
    - kergonath 9mo ago
      Looks like we are in the same boat.
- 1123581321 9mo ago
  Their hardware margin supposedly averages 40%. A 40+% price drop across the board would be a good outcome for a lot of their customers.
behnamoh 9mo ago
I wonder how AI can disrupt this nasty business by teaching users how they can self-host much of those services and save $$$. Let's face it: for the normies out there, the idea of having "your own iCloud" is still daunting (albeit very much possible). Can AI level the playing field between users and greedy firms like Apple?
- brianwawok 9mo ago
  Nah. They won’t even know it’s a problem to solve.
- latexr 9mo ago
  Most users won’t ever use any AI outside of the big players, and those couldn’t give a flying fuck about user empowerment. They’ll just advertise at you and recommend whatever is popular. It’s unrealistic to believe AI will bring any kind of democratisation or software service independence to regular users.
- doug_durham 9mo ago
  Most people don't have the time to "self host". I could easily self host, but I don't because it's not worth my time.
- no_wizard 9mo ago
  The bigger problem is the experience. There are some integrations you simply can't do that Apple and Google, as their respective owners of the platforms, can. Full device backups for instance.
- jaccola 9mo ago
  What $$$?! The top tier of apple one is £36.95pm. If I spend 15 mins of time every month extra self hosting then it’s immediately not worth it. (Not to mention self hosting won’t be free). Also, for that price I get: 2TB cloud storage,Apple TV,Apple Music,news,workouts,arcade most of which cannot be self hosted. Economies of scale are real, it’s possible Apple makes a ton of money and the user is getting a good deal!
troupo 9mo ago
Upton Sinclair coined the oft-cited maxim “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” I propose a corollary: It is difficult to get a company to see that certain of its core competencies[1] are in severe decline[2] when the company is making more money than ever. https://daringfireball.net/linked/2026/01/30/apple-reports-record-breaking-revenue-and-profit-for-q1-fy26 https://daringfireball.net/linked/2026/01/30/apple-reports-r... [1] https://daringfireball.net/2026/01/resizing_windows_macos_26 https://daringfireball.net/2026/01/resizing_windows_macos_26 [2] https://daringfireball.net/2025/03/something_is_rotten_in_the_state_of_cupertino https://daringfireball.net/2025/03/something_is_rotten_in_th...
- cyberax 9mo ago
  I joked several years ago, that when a software company loses its way, it does UI refresh that makes everything bigger and removes features.
mrtksn 9mo ago
This screams huge potential for dividing the internet into localities due to new geopolitical situation. Europe accounts for over %26 of the revenue, for $30B thats close to ~$8B for the last 3 months. The thing about hegemons is that they are able to enforce things like breaking the network effect or demolishing the walls of walled gardens. If things get bad enough, EU can give Apple a choice: leave EU market and loose all your EU revenue which is %26 of all revenue or as big as %65 of the US revenue OR unlock your devices %100 to be usable with 3rd party services. Put in numbers, definitely loose $38B per quarter or possibly loose $8B per quarter. I bet with %76.5 margin which translates to potential $2B profit per month and employment for thousands of high paying jobs, this will create enough greed to push for 3rd party local services investment. Anti-Americanism, national security concerns, pricing and better services(Apple's some services can be better) or even maybe bad due to war/political meddling can push Apple's services revenue to 3rd parties. Also, there's quite a bit unemployed American talent out there so with EU's push they can move to EU and eat Apple's service revenue. That's a bit on the fantasy realm but considering that so many unthinkable things are happening these days, maybe US will threaten France and bring a carrier strike group to Normandy shores and US services revenues from EU will go to zero? There's definitely will among the people for that, just the politicians need some push.
raincole 9mo ago
Why do people even calculate or care the gross margin percentage outside of manufacturing and retailing? I genuinely fail to see why and how it's a number with any meaning. For example, a plumber fixed your house's pipe. He charged mostly for his time instead of the tools and materials he used (righteously). If you count his 'gross margin percentage' it might be higher than Apple. Does it mean anything?
- airstrike 9mo ago
  It doesn't mean anything because you're comparing the plumber with Apple, but if you compare plumbers to each other, or possibly even a plumber to an electrician, it could be useful.
- Galanwe 9mo ago
  The plumber hourly wage is to be deducted from his margin. Just as Apple's costs for running the payment system and platform are deducted. > I genuinely don't know why and how it's a number with any meaning. It has meaning in the context of Apple arguing that their fees are that high because they have to maintain said infrastructure. Which leads to the question "how come there is no competition to lower such high margins?", which in turns questions whether any competition in unfairly blocked by Apple. In a totally frictionless market, profit margins are usually low. Very high margins are often a sign of a closed market where _somehow_ competition cannot emerge.
runako 9mo ago
I think comments focusing on the App Store are way off base. Unless my household is a wild outlier, I would expect the vast majority of services revenue to be Apple One and similar. You need more cloud storage to backup your photos, you get Music and TV with it. Even many folks who don't do Apple One will end up paying for some amount of iCloud storage. Yes, renting cloud storage at scale to consumers can be very profitable. BackBlaze is not as scaled, and doesn't have the platform tie, and achieves a 60% gross margin.
- port11 9mo ago
  Even with ex-partner being on iOS and an amateur photographer, we never paid for more than a bit of storage. I don’t think I know anyone (or ever did) that paid for Apple TV, and I think all our acquaintances have Spotify (we don’t). People fully buying into the Apple ecosystem seem to be fewer in Europe. So yes, the App Store fees are the problem/big revenue source for now?
zmmmmm 9mo ago
Somehow Apple maintains this perception that they make money on the hardware and therefore are trustworthy because they don't have any interests hostile to their users. But when you look at what's really happening it's clear - they have a highly hostile interest to their users - they want to lock them into the ecosystem and then rent seek like crazy on services that their users have almost no choice but to buy. This is why I love Apple products but I only buy the open ones that leave me choice to do what I want - which pretty much means I'm only buying Macbooks these days.
- PlatoIsADisease 9mo ago
  Walled Garden is marketing speak. Walled Prison is the reality. Its always been like this, but I don't think their target demographic cares. I remember 10 years ago I heard something like: "Iphone, the phone your mom uses." Not that its accurate. Blows my mind VIPs use iphones after Pegasus.. How could these people be so unaware?
  - msy 9mo ago
    iPhones, particularly with the advanced security/hardening turned on are light years in front of Android devices for protection against advanced/sophisticated actors. Which is why VIPs use iPhones. Apple responded to Pegasus with Lockdown Mode, which is probably the most hardcore security modality that's ever shipped in mass produced consumer hardware.
    - PlatoIsADisease 9mo ago
      Empirical evidence doesn't support this. IIRC the bounty for an Android exploit is 500k more than an iphone... Let alone the number of people killed from an Android exploit is... 0? Iphone is at least at 1... Let alone the 1000 other VIPs. Induction says, its dangerous to have an iphone. There is no deduction based answer here that has been validated by experiment.
    - matheusmoreira 9mo ago
      Apparently Cellebrite is able to crack open iPhones but not phones running GrapheneOS. There's no doubt iPhones are reasonably secure but I wouldn't say they have "the most hardcore security".
didip 9mo ago
As a shareholder, this is super fantastic.
marstall 9mo ago
yet tim cook still feels the need to attend the melania premiere
zer00eyz 9mo ago
For some context: Nvidia: GAAP and non-GAAP gross margins are expected to be 74.8% and 75.0%, Micron: MU (Micron Technology) Gross Margin % as of today (January 28, 2026) is 56.04%
TacticalCoder 9mo ago
Ah. We had: Margin call (the term): https://en.wikipedia.org/wiki/Margin_(finance)#Margin_call https://en.wikipedia.org/wiki/Margin_(finance)#Margin_call Margin Call (the good movie): https://en.wikipedia.org/wiki/Margin_Call https://en.wikipedia.org/wiki/Margin_Call I guess now we have "Margin Call", the one page long blog entry.
walterbell 9mo ago
Products gross margin was 40.7%, up 450 basis points sequentially, driven by favorable mix and leverage. Services gross margin was 76.5%, up 120 basis points sequentially, driven by mix. Apple is paying 50% more for memory, yet maintaining product margin thanks to reduced royalties to Qualcomm for cellular radios and Broadcom for WiFi radio. As more Apple devices switch over Apple modems, margins will increase. Hardware OEM competitors will likely pay >50% more for memory and continue paying full price for Qualcomm and Broadcom radio IP.
ksec 9mo ago
Not sure what is new here. It continues to baffles me most analyst still dont get it. ( They are usually not very good with commodity trading ) Actual cost of Apple Silicon is much lower than most expected. Apple has plenty of room to play with those Hardware R&D numbers. Not to mention Modem and Network Silicon. Apple Services include R&D on Software, development cost of all OS and software shipped by default such as Numbers and Photos. That has been the case since 2014 and again has room for moving margins. NAND and Memory price dont hit Apple (yet) because Apple sign early contract to ensure supply. Apple is the largest or 2nd largest Smartphone manufacture and if you include all computing devices they are likely number one. Smartphone, Tablet, MacBook and Servers. In commodity market such as NAND and DRAM, not having Apple as base load is equivalent to self destruction. They have a much higher leverage than most people imagine. Judging from the increase of Active Devices, I would not be surprised if 2025 Google are paying even more to Apple on a per user Default Search engine price. Apple has been steadily tightening up loops holes or grey area on IAP, especially in China with WeChat and Mini-Apps. I have been wondering if Apple has increased the usage of Chinese Components for iPhone within China for import Tax deduction. Although no evidence so far have suggested China iPhone 17 are made with screens from BOE only. I just wish Apple would spend more on fixing bugs.

160 points by zdw 9mo ago

That's too much margin. They're trading net profits for user happiness and it's hurting their brand more than they understand. The app store cartel must fall.

aucisson_masque 9mo ago
The competition is limited to android and Google is sabotaging every advantage they held against Apple. Customization is lost, freedom is lost, even the smartphones prices are now similar to iPhones. Pixels sell for premium price nowadays.
- varispeed 9mo ago
  [dead]
- decimalenough 9mo ago
  The sad truth is the average user couldn't care less about "customization" (unless you're talking about background images), much less "freedom". Pixel has always been the flagship and priced to match. Unlike Apple, there are plenty of Android phones at all price points.
irl_zebra 9mo ago
imo the app store thing is very niche and only affects a small, vocal group that tends to sit on hacker news and pay attention to these things. Can almost guarantee that 95% of the iphone-having population does not know/care about the app store "issue." I do think the general decline in quality and uptick in bugs will bite them slowly, at least once there's an iphone competitor of note.
- deleted 9mo ago
  [deleted]
- marcusestes 9mo ago
  It affects everyone, because the aggressive revenue cut prevents entire categories of apps and services from being published to the app store. An app store with a 5-10% cut would be an app store with a much richer choice of apps.
  - ericmay 9mo ago
    What are some examples of the categories of apps and services that aren't publishable on the App Store due to Apple's services revenue? > An app store with a 5-10% cut would be an app store with a much richer choice of apps. Why? And how are you defining "rich". Rich in quality? Quantity? Something else?
    - cyberax 9mo ago
      > What are some examples of the categories of apps and services that aren't publishable on the App Store due to Apple's services revenue? For example, Apple refuses to allow Peertube app onto the App Store. Peertube is a free version of Youtube with peer-to-peer file transfer acceleration. That's because you can use it to (bring out smelling salts!) watch porn. If you connect it to a private Peertube instance. Another example, Apple is not allowing an eBook reader app (FBReader) with full OPDS support. Because you can use OPDS to buy books in third-party stores. I'm using OPDS to get books from my own Calibre Web library, btw. These are just the ones I can list off the top of my head. No doubt there are others.
      - techpression 9mo ago
        I don’t think it’s that simple, they allow Reddit, which Is filled to the brim with porn, and other ver ”non Apple” things. They also allow plenty of comic book readers that open files from almost every possibly conceivable source. Not to mention a lot of video players that can play porn of course. Is it inconsistent and frustrating, very much so, and certain apps get an unfair treatment for sure, but I don’t think it’s as simple as that ”if app can do x then it’s banned”.
        9mo ago
- candiddevmike 9mo ago
  Most folks don't realize they're paying (up to) an extra 30% to Apple on everything they purchase in the app store. On top of an already exorbitant device price. I'm sure you'd see more outrage if you had the app price listed without the fee, and then showed the fee below it/at time of purchase. It's another hidden fee.
  - no_wizard 9mo ago
    They aren't because companies refuse to price discriminate. There are some exceptions, like Spotify where they called it out in a public space that the in app subscriptions were more than if you bought directly. However, I have noticed that its very rare. In every other case I've looked into, from Omni apps to streaming apps like Netflix, I'm paying the same either way, and often with a more convienent way of managing the subscription. Thereby, I think it goes undetected by most, because price comparing the app store to the non app store price will yield the same price most of the time. Though importantly, I have noticed, it is not always the same options. For example, regarding Netflix, I am paying the same price for my sub via Apple but new and returning customers can no longer pay for it this way, they must go to the website now. I also can't add additional members (effectively discounted second subs) either. This has to do with the fact Apple did captiulate to allowing companies link to their own subscription pages and actually allow customers to be directed in that way with clearer and transparent language. However, I have noticed most apps with the exception of large streaming platforms have done away completely with in app subscriptions, and the prices are still the same whether its the web or via in app purchases on Apple's platform. However, Google Play is no better in this regard. Even though they allow 3rd party payment processing as an alternative to using Google's payment processing, it has not lead to apps being cheaper on their platform, in the majority of cases. Which makes me wonder if the value is still there for a 1st party payment processor, or something else.
- dyauspitr 9mo ago
  I don’t even know what the “issue” is. I’m guessing it’s the 30% they take because it’s definitely not the quality and range of apps they offer.
- SoftTalker 9mo ago
  I haven't ever purchased a single thing in the App Store or in-app so I guess I don't care. But it does seem like a monopoly and something that should be forced to allow competition.
- esseph 9mo ago
  > at least once there's an iphone competitor of note. What does this even mean? Do you mean in the US or globally? By units sold, by platform, globally: Android ~885 Million ~71% iOS (iPhone) ~247 Million ~20% HarmonyOS & Others ~118 Million ~9%
  - irl_zebra 9mo ago
    A device manufacturer/company that makes people who have iphones seriously consider swapping to the new company's offering. It is such a small tail of people who have an iphone and seriously consider moving to Android, with maybe Samsung being the highest quality and most attractive with Pixel also being pretty cool. I don't know what HarmonyOS is and I am pretty tech savvy. I think any company can make an ultra low spec phone and ship Android on it and get people to buy it on the basis of cost alone, but those people aren't cross-shopping iphones, so they're not a notable comparison. Arguably, with the exception of maybe high end Samsung and Pixel phones, Android phones and others are basically a whole different product category.
    - esseph 9mo ago
      > I don't know what HarmonyOS is and I am pretty tech savvy. https://en.wikipedia.org/wiki/HarmonyOS https://en.wikipedia.org/wiki/HarmonyOS
amelius 9mo ago
That's what you get with shareholders ...
PunchyHamster 9mo ago
It's a bit of Valve situation, the competition just refuses to make better product
- benoau 9mo ago
  No. The "competition" is artificially limited to buying an Android phone, and mobility between platforms can be very complicated, not by accident, while apps like Patreon can simply be forced to comply with massive fees even if it makes their service much more expensive. Stripe, PayPal and a bag full of other payment options would be able to compete just fine with IAP and its fees.
crazygringo 9mo ago
What evidence is there that it's hurting their brand? Outside of HN I see zero complaints. And the situation has been going on for a while. I might not like it, but it seems perfectly fine for their brand as far as I can tell.
- latexr 9mo ago
  I see a lot of complaints outside of HN. For starters, not every nerd, and not even every Apple nerd, is on HN. Outside of that, even my non-tech-savvy acquaintances have been complaining as of late. Is it enough of a damaged brand to hurt their profits as of now? Clearly not. But cracks are forming. Apple’s brand isn’t damaged when they’re seen as bad, but when they’re seen as the same as everyone else.
  - crazygringo 9mo ago
    > Outside of that, even my non-tech-savvy acquaintances have been complaining as of late. What do they say? I'm genuinely curious. Because e.g. I don't have the slightest idea what percentage Microsoft takes on Xbox games, nor would it ever occur to me to complain about it. I know there's a business model there, but it's not something I think about. And I feel like that's the way people outside of tech feel about whatever percentage Apple takes out of its App Store. But what am I missing?
    - latexr 9mo ago
      The important bit is “trading net profits for user happiness”. Non-tech-savvy users aren’t complaining about Apple’s margins for apps, but about the things Apple is doing to degrade their experience in the name of profit. Namely excessive ads on the App Store, on System Settings, and on Apple Apps themselves such as Music and Wallet (F1).
      - malshe 9mo ago
        Yeah but again that’s all here on HN. I have plenty of friends who are not on HN and I haven’t heard anyone ever complain about these things.
raincole 9mo ago
> hurting their brand more than they understand Among perhaps the 1% super tech savvy users. I never heard anyone who wants to sideload apps outside online (not even from other programmers I know in real life. Ones who care like much always have been using rooted android from day 1.)
PlatoIsADisease 9mo ago
Brand name? Apple is a faux-Veblean good targeting lower middle class people, moms, and teens (Who pretend the $50/mo payments are expensive). Its a demonstration of wealth.
- no_wizard 9mo ago
  I don't think the sell through of Android phones to the wealthiest has been all that high. Celebs, top business execs, even heads of nations state are most often seen with Apple devices in their hands. I'm sure not in every case, but even as far back as 2018 the trend line of wealth and iPhone ownership was high. Even today most app store developers admit that iPhone users tend to have more disposable income by a good margin. Really, when I do a cursory google search of wealthy public figures that include them holding their devices, what I can find is they're clearly holding iPhones most of the time.
  - PlatoIsADisease 9mo ago
    I didn't say anything about wealth and android usage. Different usecases. I did mention wealth and iphone usage. An insecure teen, mom, or middle income person needs an iphone for status.
arealaccount 9mo ago
IMHO as a user I prefer purchasing via app store because it avoids all of the dark patterns companies use to prevent subscriptions or returns. I get that it sucks that the honest folks have to pay a 30% fees I'd be happy to pay a 30% premium on my app store purchases just for the ability to unsubscribe without dark patterns.
- ebbi 9mo ago
  I like the fact that when deleting an app, it reminds you about existing subscriptions related to that app, and offers to take you to the subscriptions page to unsubscribe. In saying that, I don't think I'm personally prepared to pay an additional 30% for that. It should just be what is expected as part of good business practice.

caminante 9mo ago

You're editorializing the headline, aside from your vague phrasing for "margin" (actually gross margin) and "Services [segment]" which has had gross margins >66% since FY20. Better to reflect the actual headline and then add a comment. edit: This is the SaaS division. Similar at GOOG, MSFT, CRM, etc. have similar gross margins.

BoredPositron 9mo ago
I don't understand what you want to say with your comment.
- bilbo0s 9mo ago
  Meh. On one level, it's fair. If everyone has similar services margins, then it's, at one level, disingenuous to single out Apple. At the same time, I have to say that, to my mind, the comment is whatabout-ism. Right now we're talking about Apple. Maybe we can broaden the discussion? I'm fine with that. But we'd still be talking about Apple as part of that discussion.
- caminante 9mo ago
  Have you read the HN guidelines?
  - BoredPositron 9mo ago
    insert spiderman meme
    - caminante 9mo ago
      And that's a "no."
      - BoredPositron 9mo ago
        insert spiderman meme
9mo ago

benoau 9mo ago

Not a huge surprise, there's an iCloud antitrust alleging a 78% gross profit margin: https://storage.courtlistener.com/recap/gov.uscourts.cand.425656/gov.uscourts.cand.425656.1.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.cand.42... The Epic legal case ruling cites a 75% profit margin on App Store fees: https://storage.courtlistener.com/recap/gov.uscourts.cand.364265/gov.uscourts.cand.364265.812.0_3.pdf https://storage.courtlistener.com/recap/gov.uscourts.cand.36... And of course, their 36% share of Google Ad revenue revealed in Google's antitrust has to be approximately 100% profit: https://www.cnbc.com/2023/11/14/google-pays-apple-36percent-of-safari-search-revenue-sundar-pichai.html https://www.cnbc.com/2023/11/14/google-pays-apple-36percent-...

jbverschoor 9mo ago
Epic should take a look in the mirror first
- zaptrem 9mo ago
  What did Epic do?
  - tancop 9mo ago
    paying for store exclusives mostly. it was a big deal when borderlands 3 dropped in 2019 and again with alan wake 2 in 2023. its kinda hypocritical when you keep talking about competition and how its important to fight monopolies then come up with a $150M exclusivity deal instead of actually competing with steam.
    - wavemode 9mo ago
      Setting aside whether paying for store exclusives is right or wrong (personally I don't see anything wrong with it), what does that have to do with the Apple discussion? The problem with Apple is specifically that they use their dominant market position to force anti-competitive terms on other companies. Has Epic been bullying companies into accepting their deals? You can sell a game anywhere, Epic has no leverage in this respect.

gigatexal 9mo ago

Yea. I saw that too. One day all the hardware will be loss leaders for services revenues.

kergonath 9mo ago
That would be a shame, because that’d put Apple’s interests completely at odds with mine. Using Linux would not be too much of a hurdle, but there aren’t really any better phones or tablets. I am not going to jump from the Apple pan into the Google fire.
- gigatexal 9mo ago
  Oh don’t get me wrong: I love the Apple hardware. It’s by far some of the best on the market. The attention to detail and workmanship is why I buy them. I just don’t know how they will avoid the push to move everything into services and only see hardware as a means to an end that end being more services revenue. They’ll become IBM then :(
  - kergonath 9mo ago
    Looks like we are in the same boat.
1123581321 9mo ago
Their hardware margin supposedly averages 40%. A 40+% price drop across the board would be a good outcome for a lot of their customers.

behnamoh 9mo ago

I wonder how AI can disrupt this nasty business by teaching users how they can self-host much of those services and save $$$. Let's face it: for the normies out there, the idea of having "your own iCloud" is still daunting (albeit very much possible). Can AI level the playing field between users and greedy firms like Apple?

brianwawok 9mo ago
Nah. They won’t even know it’s a problem to solve.
latexr 9mo ago
Most users won’t ever use any AI outside of the big players, and those couldn’t give a flying fuck about user empowerment. They’ll just advertise at you and recommend whatever is popular. It’s unrealistic to believe AI will bring any kind of democratisation or software service independence to regular users.
doug_durham 9mo ago
Most people don't have the time to "self host". I could easily self host, but I don't because it's not worth my time.
no_wizard 9mo ago
The bigger problem is the experience. There are some integrations you simply can't do that Apple and Google, as their respective owners of the platforms, can. Full device backups for instance.
jaccola 9mo ago
What $$$?! The top tier of apple one is £36.95pm. If I spend 15 mins of time every month extra self hosting then it’s immediately not worth it. (Not to mention self hosting won’t be free). Also, for that price I get: 2TB cloud storage,Apple TV,Apple Music,news,workouts,arcade most of which cannot be self hosted. Economies of scale are real, it’s possible Apple makes a ton of money and the user is getting a good deal!

troupo 9mo ago

Upton Sinclair coined the oft-cited maxim “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” I propose a corollary: It is difficult to get a company to see that certain of its core competencies[1] are in severe decline[2] when the company is making more money than ever. https://daringfireball.net/linked/2026/01/30/apple-reports-record-breaking-revenue-and-profit-for-q1-fy26 https://daringfireball.net/linked/2026/01/30/apple-reports-r... [1] https://daringfireball.net/2026/01/resizing_windows_macos_26 https://daringfireball.net/2026/01/resizing_windows_macos_26 [2] https://daringfireball.net/2025/03/something_is_rotten_in_the_state_of_cupertino https://daringfireball.net/2025/03/something_is_rotten_in_th...

cyberax 9mo ago
I joked several years ago, that when a software company loses its way, it does UI refresh that makes everything bigger and removes features.

mrtksn 9mo ago

This screams huge potential for dividing the internet into localities due to new geopolitical situation. Europe accounts for over %26 of the revenue, for $30B thats close to ~$8B for the last 3 months. The thing about hegemons is that they are able to enforce things like breaking the network effect or demolishing the walls of walled gardens. If things get bad enough, EU can give Apple a choice: leave EU market and loose all your EU revenue which is %26 of all revenue or as big as %65 of the US revenue OR unlock your devices %100 to be usable with 3rd party services. Put in numbers, definitely loose $38B per quarter or possibly loose $8B per quarter. I bet with %76.5 margin which translates to potential $2B profit per month and employment for thousands of high paying jobs, this will create enough greed to push for 3rd party local services investment. Anti-Americanism, national security concerns, pricing and better services(Apple's some services can be better) or even maybe bad due to war/political meddling can push Apple's services revenue to 3rd parties. Also, there's quite a bit unemployed American talent out there so with EU's push they can move to EU and eat Apple's service revenue. That's a bit on the fantasy realm but considering that so many unthinkable things are happening these days, maybe US will threaten France and bring a carrier strike group to Normandy shores and US services revenues from EU will go to zero? There's definitely will among the people for that, just the politicians need some push.

raincole 9mo ago

Why do people even calculate or care the gross margin percentage outside of manufacturing and retailing? I genuinely fail to see why and how it's a number with any meaning. For example, a plumber fixed your house's pipe. He charged mostly for his time instead of the tools and materials he used (righteously). If you count his 'gross margin percentage' it might be higher than Apple. Does it mean anything?

airstrike 9mo ago
It doesn't mean anything because you're comparing the plumber with Apple, but if you compare plumbers to each other, or possibly even a plumber to an electrician, it could be useful.
Galanwe 9mo ago
The plumber hourly wage is to be deducted from his margin. Just as Apple's costs for running the payment system and platform are deducted. > I genuinely don't know why and how it's a number with any meaning. It has meaning in the context of Apple arguing that their fees are that high because they have to maintain said infrastructure. Which leads to the question "how come there is no competition to lower such high margins?", which in turns questions whether any competition in unfairly blocked by Apple. In a totally frictionless market, profit margins are usually low. Very high margins are often a sign of a closed market where _somehow_ competition cannot emerge.

runako 9mo ago

I think comments focusing on the App Store are way off base. Unless my household is a wild outlier, I would expect the vast majority of services revenue to be Apple One and similar. You need more cloud storage to backup your photos, you get Music and TV with it. Even many folks who don't do Apple One will end up paying for some amount of iCloud storage. Yes, renting cloud storage at scale to consumers can be very profitable. BackBlaze is not as scaled, and doesn't have the platform tie, and achieves a 60% gross margin.

port11 9mo ago
Even with ex-partner being on iOS and an amateur photographer, we never paid for more than a bit of storage. I don’t think I know anyone (or ever did) that paid for Apple TV, and I think all our acquaintances have Spotify (we don’t). People fully buying into the Apple ecosystem seem to be fewer in Europe. So yes, the App Store fees are the problem/big revenue source for now?

zmmmmm 9mo ago

Somehow Apple maintains this perception that they make money on the hardware and therefore are trustworthy because they don't have any interests hostile to their users. But when you look at what's really happening it's clear - they have a highly hostile interest to their users - they want to lock them into the ecosystem and then rent seek like crazy on services that their users have almost no choice but to buy. This is why I love Apple products but I only buy the open ones that leave me choice to do what I want - which pretty much means I'm only buying Macbooks these days.

PlatoIsADisease 9mo ago
Walled Garden is marketing speak. Walled Prison is the reality. Its always been like this, but I don't think their target demographic cares. I remember 10 years ago I heard something like: "Iphone, the phone your mom uses." Not that its accurate. Blows my mind VIPs use iphones after Pegasus.. How could these people be so unaware?
- msy 9mo ago
  iPhones, particularly with the advanced security/hardening turned on are light years in front of Android devices for protection against advanced/sophisticated actors. Which is why VIPs use iPhones. Apple responded to Pegasus with Lockdown Mode, which is probably the most hardcore security modality that's ever shipped in mass produced consumer hardware.
  - PlatoIsADisease 9mo ago
    Empirical evidence doesn't support this. IIRC the bounty for an Android exploit is 500k more than an iphone... Let alone the number of people killed from an Android exploit is... 0? Iphone is at least at 1... Let alone the 1000 other VIPs. Induction says, its dangerous to have an iphone. There is no deduction based answer here that has been validated by experiment.
  - matheusmoreira 9mo ago
    Apparently Cellebrite is able to crack open iPhones but not phones running GrapheneOS. There's no doubt iPhones are reasonably secure but I wouldn't say they have "the most hardcore security".

didip 9mo ago

As a shareholder, this is super fantastic.

marstall 9mo ago

yet tim cook still feels the need to attend the melania premiere

zer00eyz 9mo ago

For some context: Nvidia: GAAP and non-GAAP gross margins are expected to be 74.8% and 75.0%, Micron: MU (Micron Technology) Gross Margin % as of today (January 28, 2026) is 56.04%

TacticalCoder 9mo ago

Ah. We had: Margin call (the term): https://en.wikipedia.org/wiki/Margin_(finance)#Margin_call https://en.wikipedia.org/wiki/Margin_(finance)#Margin_call Margin Call (the good movie): https://en.wikipedia.org/wiki/Margin_Call https://en.wikipedia.org/wiki/Margin_Call I guess now we have "Margin Call", the one page long blog entry.

walterbell 9mo ago

Products gross margin was 40.7%, up 450 basis points sequentially, driven by favorable mix and leverage. Services gross margin was 76.5%, up 120 basis points sequentially, driven by mix. Apple is paying 50% more for memory, yet maintaining product margin thanks to reduced royalties to Qualcomm for cellular radios and Broadcom for WiFi radio. As more Apple devices switch over Apple modems, margins will increase. Hardware OEM competitors will likely pay >50% more for memory and continue paying full price for Qualcomm and Broadcom radio IP.

ksec 9mo ago

Not sure what is new here. It continues to baffles me most analyst still dont get it. ( They are usually not very good with commodity trading ) Actual cost of Apple Silicon is much lower than most expected. Apple has plenty of room to play with those Hardware R&D numbers. Not to mention Modem and Network Silicon. Apple Services include R&D on Software, development cost of all OS and software shipped by default such as Numbers and Photos. That has been the case since 2014 and again has room for moving margins. NAND and Memory price dont hit Apple (yet) because Apple sign early contract to ensure supply. Apple is the largest or 2nd largest Smartphone manufacture and if you include all computing devices they are likely number one. Smartphone, Tablet, MacBook and Servers. In commodity market such as NAND and DRAM, not having Apple as base load is equivalent to self destruction. They have a much higher leverage than most people imagine. Judging from the increase of Active Devices, I would not be surprised if 2025 Google are paying even more to Apple on a per user Default Search engine price. Apple has been steadily tightening up loops holes or grey area on IAP, especially in China with WeChat and Mini-Apps. I have been wondering if Apple has increased the usage of Chinese Components for iPhone within China for import Tax deduction. Although no evidence so far have suggested China iPhone 17 are made with screens from BOE only. I just wish Apple would spend more on fixing bugs.