Doesn't seem a fair comparison given the far more substantial costs of brick and mortar. Brick and mortar retailers do not, traditionally, have very large margins when all is said and done, whereas I think the App Store has quite significant margins for Apple.

Dumb question, but why is a vendor's cost a relevant input to evaluate fairness? Isn't a common theme around here to price based on value, not on cost?

Last I looked, Apples gross services margins were around 66%, which implies a break even for the store at a 10% fee.

I think Apples service margins include an unspecified amount from Google for being the default search engine on iOS.

And that’s a big fraction of their services. https://www.thestreet.com/investing/google-pays-apple-billio... estimates that at $9.48 billion over 2018.

That implies that App Store margins are lower than I estimated, and it’s costs higher.

I used to work stock at a bunch of retail stores for a decade and could see what percentage the markup was. It was almost never above 20%, and usually closer to 3-5%.

Back when CompUSA/Circuit City were where most people bought software, it was more like 50-60%.

The infrastructure cost is 100000x than that for the storage and network of one file.

Downloadable is nominal outside of store. I had millions of downloads back in 2005 timeframe and we never even looked at file hosting cost.

Brick-and-mortar stores provide useful services and have high costs. Neither applies to the Apple App Store in this case.

not sure what the brick and mortar equivalent is. what does that mean?

retailers pay suppliers some wholesale cost for their goods. doesn’t seem like an analogous situation to a marketplace that takes a fixed cut of every sale.

In the olden days of game stores shelf space was at a premium so the power dynamic was on the side of the retailer, particularly with the larger chains who had a lot of room to negotiate their cut rather than buying wholesale.

If the wholesale cost is too close to MSRP, retailers will generally either refuse to carry the product or sell it above MSRP.