https://storage.courtlistener.com/recap/gov.uscourts.cand.42...
The Epic legal case ruling cites a 75% profit margin on App Store fees:
https://storage.courtlistener.com/recap/gov.uscourts.cand.36...
And of course, their 36% share of Google Ad revenue revealed in Google's antitrust has to be approximately 100% profit:
https://www.cnbc.com/2023/11/14/google-pays-apple-36percent-...
There are over two dozen gaming consoles.
Steam, GoG, Epic, Nintendo, Sony, Microsoft, retro games, in-store games, used games, rental games, you name it.
Literally a billion ways to game. And games are just TOYS. One of many hundreds of totally optional dopamine sinks.
Apple is one of two gatekeepers of the most essential device of modern humanity. They tax it, tightly control everything that happens on it, and edge out every business on it.
This needs to END. The DOJ/FTC/EU/etc. need to strip this from Apple and Google permanently. It's had vast deleterious effects on all innovation and business in the world.
You can't park in my city without a smartphone now.
You can't order food without a smartphone.
You can't bank.
You can't prove your identity on a loan.
Yet these two companies won't let you run your own software on a device you bought and own. They won't let any other businesses have any economic activity that isn't taxed. They force their search, their payment rails, and their customer relations and tracking hooks into everything.
Apple and Google are mega-monopolies and need to be rended apart. Not vertically, but horizontally: the DOJ should split Google into "Google A / Google B / Google C / Google D ..." and force them to compete with each other on all the same platform pieces. Just like they did with Ma Bell back in the day. And slap Apple around until they open up their platform and stop being the defaults for everything.
Call your legislators and demand hyperscaler monopoly breakup.
These companies own mobile internet. These companies own search and the web. They tax trademarks. They don't let you do what you want to do with tech you own. They're removing adblock and making it impossible to repair your stuff. They're shitting up the entire internet.
Epic is a puppy by comparison. They've done some lame things, but it pales in comparison.
Ironically, the tech industry at large went after Lina Khan even though she was instrumental in moving forward with taking on tech industry monopolies[0] even though they themselves have complained about the App Store for years[1] because monopoly enforcement also included shutting down anticompetitive mergers like the Figma buyout.
Selective enforcement is how we got here in the first place.
This is why the tech industry writ large did a 180 on Trump and helped to get him elected. Apparently monopolies are good if it means payouts for investors. Despite the fact they'd stand to make more in a highly competitive marketplace, not less, as has been shown throughout history
[0]: https://www.businessinsider.com/real-reason-silicon-valley-h...
[1]: https://techcrunch.com/2025/08/22/y-combinator-says-apples-a...
You can temporarily ally with the soulless corporation that happens to represent your interests right now even if you’re certain that if they had the chance, they’d be a monopolist themselves. They are using their corporate coffers to take action that helps level the playing field a bit, what an opportunity! Make the alliance, take the win, get the case law on the books, celebrate it.
If you ally only with angels, you fight alone.
Decreasing the number of bad actors by one is is worthwhile even if ninety-nine still remain.
Unless my household is a wild outlier, I would expect the vast majority of services revenue to be Apple One and similar. You need more cloud storage to backup your photos, you get Music and TV with it. Even many folks who don't do Apple One will end up paying for some amount of iCloud storage.
Yes, renting cloud storage at scale to consumers can be very profitable. BackBlaze is not as scaled, and doesn't have the platform tie, and achieves a 60% gross margin.
So yes, the App Store fees are the problem/big revenue source for now?
But when you look at what's really happening it's clear - they have a highly hostile interest to their users - they want to lock them into the ecosystem and then rent seek like crazy on services that their users have almost no choice but to buy.
This is why I love Apple products but I only buy the open ones that leave me choice to do what I want - which pretty much means I'm only buying Macbooks these days.
wrt hostility: they’re the most privacy focused phone provider out there (which is why they can’t produce an llm from user data)
Apple also tracks and charges for conversions on ads for mobile games (eg. purchasing lootboxes on clash of clans) which makes them direct competitors with the other big tech ad platforms.
Its always been like this, but I don't think their target demographic cares. I remember 10 years ago I heard something like: "Iphone, the phone your mom uses." Not that its accurate. Blows my mind VIPs use iphones after Pegasus.. How could these people be so unaware?
Apple responded to Pegasus with Lockdown Mode, which is probably the most hardcore security modality that's ever shipped in mass produced consumer hardware.
GrapheneOS (which, FWIW, I do trust at least as much as ADP) has a web-installer IIRC, making it similarly easy to enable, but a little harder to disable for normal users. Moreover, it's not built-in to the Pixel. It's entirely third-party, and did not ship on mass-market hardware
Being an option on the default OS, with OEM support, can make all the difference sometimes
[0] https://www.securityweek.com/paragon-graphite-spyware-linked...
[1] https://www.eff.org/deeplinks/2025/09/eff-statement-ice-use-...
Are androids getting "a nation state" to hack their phone? No.
Its objectively worse security to have an iphone.
Induction says, its dangerous to have an iphone. There is no deduction based answer here that has been validated by experiment.
Better to reflect the actual headline and then add a comment.
edit:
This is the SaaS division. Similar at GOOG, MSFT, CRM, etc. have similar gross margins.
What are you talking about? Did one or the other have a different title when you wrote your comment?
Original headline was misleading and editorialized.
On one level, it's fair.
If everyone has similar services margins, then it's, at one level, disingenuous to single out Apple.
At the same time, I have to say that, to my mind, the comment is whatabout-ism. Right now we're talking about Apple.
Maybe we can broaden the discussion? I'm fine with that. But we'd still be talking about Apple as part of that discussion.
Margin call (the term):
https://en.wikipedia.org/wiki/Margin_(finance)#Margin_call
Margin Call (the good movie):
https://en.wikipedia.org/wiki/Margin_Call
I guess now we have "Margin Call", the one page long blog entry.
Actual cost of Apple Silicon is much lower than most expected. Apple has plenty of room to play with those Hardware R&D numbers. Not to mention Modem and Network Silicon.
Apple Services include R&D on Software, development cost of all OS and software shipped by default such as Numbers and Photos. That has been the case since 2014 and again has room for moving margins.
NAND and Memory price dont hit Apple (yet) because Apple sign early contract to ensure supply. Apple is the largest or 2nd largest Smartphone manufacture and if you include all computing devices they are likely number one. Smartphone, Tablet, MacBook and Servers. In commodity market such as NAND and DRAM, not having Apple as base load is equivalent to self destruction. They have a much higher leverage than most people imagine.
Judging from the increase of Active Devices, I would not be surprised if 2025 Google are paying even more to Apple on a per user Default Search engine price.
Apple has been steadily tightening up loops holes or grey area on IAP, especially in China with WeChat and Mini-Apps.
I have been wondering if Apple has increased the usage of Chinese Components for iPhone within China for import Tax deduction. Although no evidence so far have suggested China iPhone 17 are made with screens from BOE only.
I just wish Apple would spend more on fixing bugs.
Products gross margin was 40.7%, up 450 basis points sequentially, driven by favorable mix and leverage.
Services gross margin was 76.5%, up 120 basis points sequentially, driven by mix.
Hardware OEM competitors will likely pay >50% more for memory and continue paying full price for Qualcomm and Broadcom radio IP.
I genuinely fail to see why and how it's a number with any meaning. For example, a plumber fixed your house's pipe. He charged mostly for his time instead of the tools and materials he used (righteously). If you count his 'gross margin percentage' it might be higher than Apple. Does it mean anything?
> I genuinely don't know why and how it's a number with any meaning.
It has meaning in the context of Apple arguing that their fees are that high because they have to maintain said infrastructure.
Which leads to the question "how come there is no competition to lower such high margins?", which in turns questions whether any competition in unfairly blocked by Apple.
In a totally frictionless market, profit margins are usually low. Very high margins are often a sign of a closed market where _somehow_ competition cannot emerge.
Europe accounts for over %26 of the revenue, for $30B thats close to ~$8B for the last 3 months.
The thing about hegemons is that they are able to enforce things like breaking the network effect or demolishing the walls of walled gardens. If things get bad enough, EU can give Apple a choice: leave EU market and loose all your EU revenue which is %26 of all revenue or as big as %65 of the US revenue OR unlock your devices %100 to be usable with 3rd party services. Put in numbers, definitely loose $38B per quarter or possibly loose $8B per quarter.
I bet with %76.5 margin which translates to potential $2B profit per month and employment for thousands of high paying jobs, this will create enough greed to push for 3rd party local services investment. Anti-Americanism, national security concerns, pricing and better services(Apple's some services can be better) or even maybe bad due to war/political meddling can push Apple's services revenue to 3rd parties. Also, there's quite a bit unemployed American talent out there so with EU's push they can move to EU and eat Apple's service revenue.
That's a bit on the fantasy realm but considering that so many unthinkable things are happening these days, maybe US will threaten France and bring a carrier strike group to Normandy shores and US services revenues from EU will go to zero? There's definitely will among the people for that, just the politicians need some push.