https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-s...
Besides, how many app updates are there per day? The amount they pay an app reviewer x n reviewers is going to be _nothing_, a drop in the bucket of what they make from the app store overall.
App Store is a cash cow so they'll protect it viciously; I expect Apple will win this one through their usual gaslighting/cult personalities unless EU is willing to come down hard enough on 'em. Ban sales of Apple products that do not conform, easy.
It doesn't affect consumers in any negative way, only positive.
[1] https://www.bloomberg.com/news/articles/2021-05-01/apple-s-a...
10% was not commission-free. App Store commissions are between 15% and 30% depending on the size of the developer. That would be between $165B and $330B revenue for Apple from commissions.
Nobody knows how profitable the App Store is to Apple. "It’s a question that investors would love to know the answer to, because it addresses the entire business model of the App Store. Apple does not disclose any detailed financial results of the App Store,". "Barnes calculated that the App Store had hefty profit margins, which increased to 78% in 2019, up from 75% in 2018" [2]
App Store revenue is still growing (not least with inflation) so the number of 2023 was likely even higher.
~80% margin on $165-$330B revenue in 2022 would be $132-$264B. So my original number of $100B may actually have been on the low side.
[1] https://techcrunch.com/2023/05/31/apple-touts-1-1-trillion-i...
[2] https://www.marketwatch.com/story/how-profitable-is-apples-a...
If 90% of billings were commission-free, that means $110 billion had Apple's commission applied to it. 110 * 0.3 = 33 billion of revenue at most, or 16.5 billion if we use the 15% commission.
> Apple also said iOS app developers have earned more than $320 billion on the App Store from 2008 to 2022, a jump from the $260 billion reported in 2021.
> Apple says its App Store ecosystem generated $1.1 trillion in developer billings and sales in 2022
I'm having a hard time reconciling these two statements. It's been a long day, but what am I missing to make sense of this?
For example, Spotify makes money from people streaming music to iOS devices, but they do not allow you to upgrade from a free account to a Premium account through their iOS app.
Since Spotify handles subscription purchases outside of their iOS app and their app is free, they pay nothing to Apple under the current system.
Afaik, pointing users to subscriptions and payments outside of the app is explicitly not allowed. Telling the user it's cheaper to buy outside the app is not allowed, etc. Such blatantly predatory rules, I'm surprised it's taken this long for a wider discussion to start about it.
I guess it's because whenever you ask people that buy Apple gear they're all "That's fine! Don't you shit talk Apple, they can do what they want! They do what's best for us!" Stockholm syndrome lmao.
Nope. Under the old rules any company with a free app used to access subscription content didn't have to pay anything unless they took payments through their app.
Netflix would be another example.
> pointing users to subscriptions and payments outside of the app is explicitly not allowed
It's definitely allowed now, since that's the only point on which Epic won their case vs. Apple.
They used to report this number as sales they "facilitated". A far more accurate descriptor. But now that they are engaged in a PR battle with various governments they have taken to embellishment.
https://www.apple.com/newsroom/2020/06/apples-app-store-ecos...
I guess that since those apps came from the App Store to begin with, they are counting that as revenue that the App Store "generated"? Talk about playing word games.
According to the TC article you linked, Apple previously released this figure phrased as sales that it "facilitated"[1]. A much more accurate, and far less braggadocios descriptor.
Maybe I'm being pedantic, but I see a huge difference between "generated" and "facilitated". Bad Apple.
[1]https://www.apple.com/newsroom/2020/06/apples-app-store-ecos...
You're spot on.
Seems more like "this is the money we weren't able to use our monopoly to extract value from, aren't we soooo altruistic!".
>The Company’s total net sales were $383.3 billion and net income was $97.0 billion during 2023.
Because $97B is < $100B, it is impossible for AAPL to have earned $100B net income just from the App Store (because we also know its other divisions do not lose money, again according to the 10-K they filed).
> Therefore, the Company accounts for all third-party application–related sales on a net basis by recognizing in Services net sales only the commission it retains.
So the commissions are <=$85B. Given the $1.1T number is from Apple, that implies the average commission rate is <15% (many categories of app excluded from commissions perhaps?).
They list gross margin for services to be $60B but I don't see where they break down net profit with greater granularity or "per division" (the word division does not seem to appear in the 10-K). For example they could make $80B in App Store commission, sell $5B in other services, make $80B in profit from commission, but lose $20B on other services, and that would still be consistent with the numbers in the 10-K, right? And those numbers presumably don't include indirectly related operating expenses which totaled $55B.
Apple has not revealed how profitable the App Store really is, but either way it's a LOT of profit, certainly enough to warrant expensive attorneys and stalling implementing this legislation in good faith for as long as possible.
From [1] ( The Link you referenced )
>This $1.1 trillion breaks down as $910 billion in total billings and sales from the sale of physical goods and services, $109 billion from in-app advertising and $104 billion for digital goods and services.
They take 15% to 30% of $104 Billion. That is at best $31.2B. In case this isn't even clear. Apple collect ZERO on the $910 physical goods and services such as Uber and ZERO on the $109 In-App Advertising revenue.
>~80% margin on $165-$330B revenue in 2022 would be $132-$264B. So my original number of $100B may actually have been on the low side.
It is 80% margin on the at best $31.2B revenue. Not the $104 Billion Sales.
Apple reported FY 2022 Services Revenue as $78B. You cant have a Net Profits more than your total Services Revenue Income.
People can upvote something because of various reasons. I don't lurk around and upvote only "correct" comments.
Which country do they hide their business in that doesn't require accounts be published on a business's principle activity?
> Yes, we know they talked with the EU, but we don't know the content of those discussions.
Geeze, that's a lot of money. Out of curiosity, how bribeable are EU regulators? If this were the US, they'd just make a few campaign donations and it'd all go away and the citizens would just shrug at the business as usual in DC.
Do EU regulators typically have more integrity and teeth?
But you can always offer to look after them when they retire. Give them a nice non-exec role, or perhaps make them vice‑president of global affairs and communications....
According to the linked article he actually did work for the European Commission (part of the EU executive) as a civil servant.
"He took up a post at the European Commission in April 1994, working in the TACIS aid programme to the former Soviet Union. For two years, Clegg was responsible for developing direct aid programmes in Central Asia and the Caucasus worth €50 million. He was involved in negotiations with Russia on airline overflight rights, and launched a conference in Tashkent in 1993 that founded TRACECA—an international transport programme for the development of a transport corridor for Europe, the Caucasus and Asia. Vice-President and Trade Commissioner Leon Brittan then offered him a job in his private office, as a European Union policy adviser and speechwriter. As part of this role, Clegg was in charge of the EC negotiating team on Chinese and Russian accession talks to the World Trade Organization.[33]"
We would like a big technology sector. A 15-30% rent on that isn't making things easier.
Yes, we know they talked with the EU, but we don't know the content of those discussions. It's easy to assume they were checking whether their proposed implementation would satisfy the regulators. It's equally likely, even more likely, they were gathering information, posturing and probing to see how the EU would react, to gauge how best to craft their scheme to outwit them and what they could or could not easily get away with.
You can hold a negotiation and still screw the other side over afterwards - isn't that actually the best way to do it? Holding a meeting first to learn what cards your opponent has in their hand is just a better way to play any game.