http://www.theregister.co.uk/2010/01/26/app_store/



Does anyone else find that 'a bit over break-even' slightly hard to believe?

I understand the arguments around it (I even find it hard to believe many people buy songs from them at the prices ) but it just seems a lot of effort for not much if you believe them, especially considering all the toing and froing with the record industry over DRM and profit

At the end of the day, they are still a hardware company. As long as they aren't making a loss on the Stores, they will be fairly happy, as it promotes hardware sales.

The same with the book deals they have allegedly signed, they offer 70% of the revenue to the publisher/author. That is more than any of their competition. If authors jump to the Apple Book Store, it will give them a good base for selling an eBook reader (the iPad?).

They will be making some money, but the servers, staff, lawyers fees etc. for raking over deals will eat into the few cents they earn on each app/tune/film/book. Only reducing costs will allow them to make money, which might happen long term, and possibly with books having a higher margin. But as long as it drives hardware sales, it isn't too much of a problem, if they aren't major profit centres.

$100 per account on the app store as a dev
30% of each sale, say $0.30
For a basic app, such as a fart one, say 2000 sales a day, so 30% of that in revenue, so $600 per app, on one day of sales

Also don't forget the App store is mostly free apps, so they only get the $100 account charge for the devs (per year I assume)

I can only really see the top 5 being realistically profitable, but making a decent profit, the rest not really given the potential cost of production, hardware to dev with etc
http://www.joelcomm.com/updated_app_sto ... 22008.html

Well I don't know. Apple are providing a shop front. The record/film companies provide the product and presumably take the lions share of the profit.

On the App store front. Did I not read that Apple broke ground in offering such a low cost way to get developers product online? The point being that administration, credit card fees, hosting, code checking, payment overheads etc were absorbed by Apple even for the free applications.

Did I not also read that every film that is rented from the iTunes store makes Apple a substantial loss?

So I tend to believe that "a bit over break-even" is true. Though it is less true for the people who provide content.

phew $153 million net profit is only a bit over break even
I wish I was only breaking even at that rate

Yes, see that's the sort of thing that makes me think we aren't getting the full story somehow, but I'm no expert...

I suspect they're worried that the music industry will want even more money

IMHO youve hit the nail on the head. if they announce that they are raking it hand over fist then the content providers will demand a bigger cut. So it is in there interest to downplay the revenue they are getting, but I could be totally wrong.

Apple is a company (as all successful companies are) dedicated to ensuring your money becomes its own money. It does this by persuading you that its products are good enough for you to part with your money (which they are very, very, very successful at doing.) They have persuaded me to upgrade to every iteration of the iPhone so far .
Though to be fair it only took about a nano second for me to go "i want I want gimme gimme gimme"

It does sound like that figure includes hardware, though.

Where do you get $153 million net profit? There is no mention of profit in the quote you gave...

Net sales != Net profit.





(From Investopedia.com)

From that $153 million, you have to take away salaries and benefits for the people working for that division, server costs, bandwidth costs storage costs, conversion costs, credit card fees, rights holder's fees, legal fees, support costs etc. So, you can take around 70% of that $153M for the rights holders, that leave $46M to pay for the running of the stores. Throw in the costs for the tera or peta bytes of downloads over the quarter, that will take a healthy chunk out of that $46M, before you get to investing in people and servers...

You can still make a net loss on $153 million net sales...

Apple are a public company, which means that they have to publish their figures, so they can't "downplay" the revenue - and we are talking about revenue here, not income or profit.

Just look at the bad years of IBM, they were making $2bn loss on revenue of $6bn!


That is true enough.

The last 2 years they have stated growth is coming from the content providing side not the hardware side.

You pay $100 a year to be able to develop apps for it. They dont check code AFAIK, the dev has to do that in advance
No company would code check, they only test the binaries. Would you give some company you are trying to sell your product to all your source code for them to use as they please? I think not.

They take 30% of revenue from sales, so 30p per 99p app sold. I really can't believe they are breaking even on that given the sales of apps that aren't free. The Indie Games platform on the 360 is profitable for all on the business end assuming a game sells well. One guy has made £100k after the MS cut for marketing and hosting (The guy who made "I maed a gaem with zombies init!!!1" has sold over 160,000 copies) and 2nd place has over 100k sales too. That one game made MS £40k or so in the cut they take (as it's variable from 10-30% depending on the marketing the game gets)

What they do is check it to see if it performs as advertised. It it has bugs or does not work then it is rejected. This is apparently the main reason for an application being rejected by the App. Store approval process. Someone has to pay for that.

That is very different to checking code. That is black box testing, and not particularly good black box testing.

The App store verification process is overly secretive as it's Apple. They choose to do it in house, that is their choice. MS do it on a peer review bases from members of the XNA Creators club, it costs them nothing.

LMFTFY.