When you buy an Apple iPhone, you are setting yourself up to be right royally screwed by the world’s largest and most profitable technology claim experts, the Company and shareholders love it.
This is because there is nowhere else for you to go to buy anything that attaches, or works on the device, unless Apple is taking not only a cut but a massive cut of the revenue.
Last year Apple’s App Store had operating margins of almost 78% according to experts, and this has seen brands such as Netflix moving to partner with TV Companies and other third parties because of the demands that Apple makes on the revenue streams generated when an app is downloaded.
At Apple nothing is free.
According to testimony from an Epic Games expert witness based on documents obtained from the iPhone maker Apple is coining in the money and it’s a case of take or leave it for brands wanting a presence in the Apple Store.
Epic Games is currently suing Apple in a US court.
According to Bloomberg, the figure comes from Ned Barnes, a financial and economics researcher, who said he obtained documents “prepared by Apple’s Corporate Financial Planning and Analysis group and produced from the files of Apple CEO Tim Cook.”
Apple is so concerned that their margins are being revealed that they have urged a judge to restrict public discussion of App Store profit — as the company’s head into a high-stakes trial this week.
Epic, maker of the blockbuster game Fortnite claim that the Apple Store is a monopoly with its commission on developers of as much as 30%.
Apple being Apple claim they “Do not abuse their market powers”.
In Australia retailers who stock Apple products do so on extremly low margins because Apple dictates the terms.
Epic is currently suing Apple in Australia and the UK.
Apple are desperate to win this case as they have lost recent cases when they were accused of stealing the IP of hardware and software used in their devices.
The person who will be the decider in the epic battle is U.S. District Judge Yvonne Gonzalez Rogers, who is conducting the three-week trial without a jury.
Bloomberg claims that an Apple employee told him that the numbers from the company’s internal documents don’t show the full picture.
Barnes said he then made additional calculations, which resulted in higher margin estimates of 79.6% for both 2018 and 2019.
In a statement Saturday, the Cupertino, California-based technology giant said Epic experts’ “calculations of the operating margins for the App Store are simply wrong and we look forward to refuting them in court.”
Barnes said he also obtained documents prepared inside Apple that show profit and loss estimates for fiscal year 2020. He said Apple had been tracking App Store profits for years and that he also obtained such statements for 2013 through 2015.
Analysts believe that Apple’s margins on the App Store may have grown since 2019.
“When we look at the App Store, it’s not a separate standalone business for us,” Kyle Andeer, Apple’s chief compliance officer, said at a congressional hearing last month. “It’s an integrated feature of our devices.”
Cook said the same in his pretrial testimony. “Apple’s business is not structured that way that allows a person to push a button and obtain an App Store” profit and loss statement, he said.
Apple says it doesn’t allocate costs for the App Store, and that internal documents discussing revenue for the marketplace typically don’t include expenses. That means, according to the company, any margins or profits don’t show the entire picture.
In a request to the judge to bar Epic from referring to App Store financial data in open court, Apple said the information may “unduly confuse the securities markets and participants in those markets, including the many pension funds, mutual funds, and other ordinary investors who own Apple stock.”
