App store: > 70% profit margin, zero inventory risk.
Put another way: If grocery stores cut gross margin by a couple points they'd be out of business. They are basically charging the absolute bare minimum they need to make a profit. The reason? Competition.
Apple could drop their App Store gross margin by 50% and still have one of the most lucrative operations in the world.
Grocery stores: < 3% Profit margin, huge inventory risk.
App store: > 70% profit margin, zero inventory risk.
Put another way: If grocery stores cut gross margin by a couple points they'd be out of business. They are basically charging the absolute bare minimum they need to make a profit. The reason? Competition.
Apple could drop their App Store gross margin by 50% and still have one of the most lucrative operations in the world.