While it's not as crazy, the video game console industry operates on negative cash flow in the hardware sales department. Consoles that cost $500 at retail cost $525 to build, and the Nintendo Switch was famously being shipped at a loss of nearly $50 per console sold. It's not an entirely foreign concept, but it is definitely lucrative. Apple could defend their 30% cut if they reduced the price of their hardware, but I get the feeling that their business relies on pumping those profit margins as fat as the customer can tolerate...