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...
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.
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.
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!".
> 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.
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...
>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.
Which country do they hide their business in that doesn't require accounts be published on a business's principle activity?
