Apple invests an enormous amount into R&D to make their devices. For example, they make their own CPUs, which happen to be some of the fastest ARM chips you can get.

I don’t think it’s any different from consoles. The main difference is that with a console you know what the deal is.

With an App Store app, the problem is you don’t know if Apple is going to deny your app on an inconsistently applied rule after spending 2 years making it.

They sell their devices at a healthy margin. Their financial interest in the device should stop at the till. If they want to sell additional software and services then they can prove their value on a competitive level playing field.

Right now they are double-dipping, not because of value they are adding, but because of the power they have given themselves over the consumer/developer relationship.

So is Amazon “double dipping” on the Kindle are the console makers? Are grocery stores for marking up products and having slotting fees?

The App Store is a service.

I disagree, it's a market.

If you allow 3rd parties to sell something, you create a market. That market should be free and competitive.

If you want to keep it a service, don't allow 3rd parties in.

So Amazon, EBay, the console makers, FaceBook should all offer their markets freely?

Not offer their market freely, but make it competitive, yes.

But the Android ecosystem also invests hugely in R&D, it's just spread over more companies.

With consoles the primary justification was always that the hardware is sold below cost. This is purely to the benefit of the game developers, all the risk falls on the console maker, so they accept it for that reason. The iPhone is not only not sold below cost but its price has never fallen in the entire lifetime of the product, from what I recall.