from Hacker News

Apple denies App Store profit margin is 75% – claims to have no clue

by galogon on 1/17/25, 1:27 PM with 58 comments

• by rahimnathwani on 1/17/25, 4:25 PM

  For those claiming Apple should be able to calculate the App Store's profit margin - can you actually define how to do it?

  As someone who qualified as an accountant over 15 years ago, it's not obvious to me how you would develop a meaningful allocation of costs.

  I suspect this misunderstanding stems from the same thinking that leads people to believe the myth that Costco makes no profit on its physical products, only on memberships.

• by karaterobot on 1/17/25, 3:59 PM

  It is difficult for me to believe Apple doesn't have a pretty good idea what the profit margin for the App Store is.

  When they say that the profit margin isn't 75-78%, I assume that's because it's 79% or more.

• by pjmlp on 1/17/25, 3:38 PM

  People lie all the time under oath, they only need to be sure they wouldn't get caught in first place.

  Folks are so naive.

• by fabrixxm on 1/17/25, 1:50 PM

  > Senior company execs wouldn’t lie about it under oath,

  ahahahahahahahah

• by neilv on 1/17/25, 4:24 PM

  I thought Chief Financial Officers were supposed to be good at financials.

  Do they also have to be good at perjury?

  Is that FAANG job interview analogous to the one for software engineers?

  "Can you go to the whiteboard, and perform for me one of the standard case studies of CFOs who got away with perjury? Which you should have memorized, even if you learned nothing else in school."

  "Using STAR format, tell me about a time that you lied about financials, and got away with it."

  "OK, in the 3 minutes left, I want to turn this over to you, for any questions you have. ... Oh, if you have experience working with financials, normally people mention that in the Hobbies section of their resume; here at Faang, our interviews focus instead on the fundamentals."

• by knowitnone on 1/17/25, 4:06 PM

  "we make so much we can't even count it anymore" -Apple Apple pretending they don't have accountants or data analysts.

• by elashri on 1/17/25, 3:40 PM

  Doesn't courts have the power to ask Apple to actually calculate this number and give the supporting evidence about that? Because judges are not robots and understand that it is really Apple doesn't want to know the number so that it doesn't have to disclose the margin. This is probably not the first a time a company trying this tactic in court. It would be surprising (for me) if not.

• by pretext-1 on 1/18/25, 2:44 PM

  I typically don’t argue in favor of big corporations but I believe them, kind of. Apple includes a lot of things into their SDKs for free, which are paid on Google's platform. For example Apple Maps, Apple Weather, etc. components are all free and can be extremely expensive on Android (Google charging per view for Google Maps, for example). That is of course if you use these things in your app.

• by senordevnyc on 1/17/25, 8:48 PM

  For all of those claiming that of course they know, because big companies always know exactly how much everything they do is worth:

  1. Do you think your employer can calculate the profit margin on what you do? I sincerely doubt it, unless maybe you work in sales or something.

  2. How would you calculate the value of HN to YC?

  3. How would you calculate the value of iMessage? It has no direct revenue, but it has a huge effect on other revenue. How much though?

• by snvzz on 1/18/25, 8:19 AM

  Similar to protections against usury, we need laws to prevent this sort of abusive revenue split.

  I'd say a hard limit like 10% for digital download stores (app store, google play, steam, ...), and 20% for streaming sites (youtube, twitch, ...)

• by beardyw on 1/17/25, 2:31 PM

  Perhaps it's 74% or 76%.

• by taylodl on 1/17/25, 1:56 PM

  They're so happy they can hardly count

• by sfifs on 1/17/25, 11:02 PM

  Taking these positions is a foolish risk. Such obvious disingenuous behaviour may be rewarded in the US but judicial systems in other countries may take a dim view of this sort of obvious obfuscation. The judge could appoint a forensic accounting firm to get full access to their financial records system and calculate the profitability.They will surely find some report to management in the system reporting profitability at which point there's a perjury and contempt of court charge risk. They need less arrogant lawyers :-)

• by Fin_Code on 1/17/25, 4:21 PM

  Umm good for Apple? They produce a service that people want. 3rd parties are making loads of money off of it. Its win win all around.