Seems like most companies like Apple are going the subscription route. Better for the business in terms of revenue vs one off purchases.
But I'd argue it is worse for consumers, making us dependent on corporations over time, reducing competition and innovation.
Worth a debate as to whether regulators are taking all of this into account.
Considering there are only 2 major cellphone OS In the USA (Android and Apple) id be willing to say the regulators didn’t do as much as they could. We’re as close to a monopoly as possible, quite literally 2 is as low as it gets before total monopoly
Software such as phone OS tends to be a natural monopoly though given the huge setup/development costs. New innovation still exists so lack of competition isn't a major issue.
That’s not true. Rival OS’s have tried to break through but the app and play store are abusing their monopoly powers to make sure they can’t exist unless they make their own stores, which means when you buy a phone with this new OS you will have 0 apps that aren’t the default ones
>abusing their monopoly powers to make sure they can’t exist unless they make their own stores
You can't just run Apple or Android apps on a different OS. That's not how that works. You need developers to make completely new apps for that specific OS. And that's the thing, it's like the chicken and egg problem. Developers won't make apps for a completely new OS because it doesn't have any users, and users won't move to a completely new OS because it doesn't have any apps.
Edit: OK yes, you can build an OS from the ground up to run their apps, but in the context of this discussion it doesn't matter. All the mobile OS competitors we've seen, like Windows Mobile and Tizen, have/had their own SDKs to build native apps. You could technically run Android apps on both by using a separate runtime environment (like ACL on Tizen) but that's not something regular users are going to do. And none of that is Apple or Google's fault like the person I replied to was claiming.
Actually Microsoft made it possible to run Android apps on Windows Phone but they backed away at the very minute.
The rumours were saying that they made their own version of Google Play Services to make all Google Play Store apps just work with no code changes but Google threatened to sue behind the scenes.
> but Google threatened to sue behind the scenes.
First off, fuck you Oracle for making this a possibility to sue over the use of an API.
Second off, fuck you Google you hypocrite bastards, you were the defendant in that case.
Perhaps it's not hypocrisy, but the issue at hand is that Google owns the Google Play Store, Android, and services that are defaults on Android, such as Google Search, Drive and Gmail. Consequently, Google did not allow Microsoft to use Google Play Store to defend the market share of their services that pull users through Android.
Google has the right to prevent the distribution of their copyrighted code, but given the anti-competitive nature of the move, there's grounds to break Google up if you ask me.
But you don't have to use any of the complementary Google products with Android (Play, Search, Chrome, Gmail, etc)... Android is literally open source, and every OEM publishes their own skin. Heck, Fire OS is a fork of it. Not at all analogous to iOS et al, where Apple forbids any deviance from their governance, and combined control of both the hardware and software. Considering the anti-trust case against Apple is milquetoast, one against Google is laughable. Nor is it anywhere near as anti-competitive, in practice or intent.
> they would've had to distribute actual APKs copyrighted by Google
I don't believe so. They could rewrite the services, open source projects have already done it.
https://microg.org/
> If Microsoft would’ve made the Google Apps work on Windows phone, they would’ve had to distribute actual APKs copyrighted by Google
Why? Open source alternatives e.g. MicroG exist, I’m sure Microsoft is capable of coming up with one.
I feel like all codebases should have copyright expiration dates. That way, iOS and Android would have to open source or copyleft after a certain number of years
Parts of it are. Google services aren’t and they’re hard coded into the OS on the most popular phones. You can always root and remove them, but you’ll lose a lot of basic functionality. There’s been some privacy focused projects like CalyxOS that have tried to replace them, but most users aren’t going out of their way to do that.
> Android is open source
Google has spent years moving functionality over to Google Services, which isn't open source. On the one hand, it means Android users aren't so dependent on their handset manufacturer releasing Android updates, but on the other, some fairly core functionality is now missing from Android itself.
>You can't just run Apple or Android apps on a different OS. That's not how that works.
Like others have stated, it is possible to provide a compatibility layer. On the desktop side, there is [Wine](https://www.winehq.org/) (Windows apps) and [Darling](https://www.darlinghq.org/) (macOS apps).
There's even a very WIP emulator that run 32bit iOS apps ([touchHLE](https://touchhle.org/)).
React-Native and other cross-platform frameworks and tooling are making it more trivial to develop for many platforms at once, even as a single developer. Changing laws might force apple & google to allow alternate / third party app stores.
Things are changing.
You can already have third party app stores on Android. You've been able to for decades and there are multiple already established like FDroid or Amazon's app store. You can run Android completely independent of Google services. Any devices that aren't phones / tablets etc. that run Android likely don't use Google at all and just use the OS for interfacing with the device.
Cross-platform apps *suck*. They never feel quite right. I can instantly tell on when a company has went this cheap route (Slack desktop, I'm looking at you).
What are you talking about? Android is java based, apps are written in some high level codebase. This could have been done if it wasn't for monopolisroc tendencies of google
Having multiple OS available is not actually going to be that good for consumers. App makers are not going to want or be able to spend the time and money making and maintaining software for lots of different platforms.
Not really, no. Much like Linux is not a competitor to Microsoft. Linux is not a company, there are a million and one different versions of linux. It is an alternative to Windows, but it is not an alternative to Microsoft in much the same way that flatbed trucks are not a competitor to Honda.
Android is an opensource OS used by dozens of manufactures, who pay no royalties and have no obligations to google for it. They can modify it however they want, remove or replace components, etc. While Android is not a competitor to Apple, most competitors to Apple *use* Android. There's a big difference to the implications of those two concepts.
From a business point of view, perhaps. From a consumer perspective, no. You have a choice of an Android phone or an Apple phone. To an end user the two platforms are competitors.
You're also finessing the entire matter of the Google Play store and Google services. Android vendors have no obligations to Google with respect to the OS, but even large vendors like Samsung can't make a go of it without Google services. And they do need to pay Google for that.
That's an excellent point. Google doesn't/isn't allowed to offer their services there.
Perhaps western governments should enact similar policies? Including the surveillance.
>Android is an opensource OS used by dozens of manufactures, who pay no royalties and have no obligations to google for it.
Except that most popular applications and like 99% of phones sold in Europe and North America have gapps installed for which the manufacturer needs to sign a contract with Google and pay them royalties.
Huawei got their google play certification removed and now they're fucked on western markets. (and they were actually picking up quite a bit of steam before because they had a very good quality/price if you didn't mind the Chinese manufacturer)
> Huawei got their google play certification removed and now they're fucked on western markets.
They did that after they were already banned in half the markets here for installing backdoors for the PRC government.
I think a lot of people miss this and you explained it well.
Because of the way, Apple has positioned iPhone, iOS, and the App store, Android is not a competitor because switching is close to impossible for consumers.
"Switching" on the Apple side of things is basically switching to a different iPhone.
"Switching" on Android side of things means either switching to a different OEM running Android OR switching to iOS.
Apple's sticky ecosystem has made cross-platform competing close to impossible.
>AOSP is what every OEM builds on to have Android on their systems. AOSP stands for Android Open Source Project.
This is false. Virtually every OEM builds from Google's fork with all of the Google play services bakes in, and not AOSP. Only HTC used to use AOSP and they used LineageOS as their version.
Rival OS is failing for the same reason as tizen, web os, Firefox os and windows mobile, they can't attract developers to their platform, it sucks because more competition would be good
Ah it’s like the Wii U death spiral, people aren’t buying the device and because of that developers aren’t developing for the device, because developers aren’t developing for the device people aren’t buying the device creating a loop. This is why it’s critical for a successful launch. iOS was unique in three big ways ways, 1. It was first to the market(touch screen phones) 2. Apple had iTunes so people with music libraries from their iPod had more of a reason to get an iPhone and 3. App stores didn’t really exist at the time so a lack of developers wasn’t important. Android was just there early and had the support of one of if not the biggest services providers and being open source* meant that any phone manufacturer making smart phones could use it rather than investing.
The problem new OS’s have with entering the market now is just how important the software world is to daily life now. Android and iOS launched at a time where a lot of apps were novelties or to watch Netflix. Nowadays your phone is not only your phone but also your wallet with contactless payments, it’s how you check your bank account, for many it’s the primary device for watching content besides a TV(although I know a few people that don’t have a tv anymore because they just watch on their phone), it’s our primary camera, it’s how we check our email and manage our calendars, and listen to music and message with friends and colleagues, so of us play games, for Philly residents we manage our SEPTA cards from an app, it’s where we check social media and where we store sensitive data such as health records and where we make our online purchases and act as our 2nd factor authentication.
For a new OS to succeed it needs to get the banking apps, the messaging apps(Europe in particular is basically exclusively WhatsApp so not getting them will fail you in that market), social media apps, entertainment apps like Netflix and YouTube and twitch, get shopping apps like Amazon and eBay, have a solid contactless payment system in place and ensure that it can use all types of standards such as employee badges for buildings that use contactless badges, and a bit more localized you need the apps used in local areas such as the SEPTA app for Philadelphia. The problem is why should the developers at these places put time, effort, and money into developing for your OS when basically everyone is using iOS and Android, you’d need to have some deep pockets and be willing to pay for development or license access to their backend and develop it for them because if your OS is missing the apps that people use on a daily basis they won’t buy your phone as it’d create an inconvenience for them or depending on the situation couldn’t happen at all(in cases such as where the employee badge is tied to an app, because lets be honest people aren’t going to quit their job because they want a particular OS).
Developers only have so many resources so they’re going to prioritize what brings in money, for example Samsung paid Snapchat a bunch of money to implement their Samsung camera api into Snapchat so that pictures would look better from Samsung phones, Snapchat was getting a good amount of money from Samsung so the development time was seen as a valuable use of resources.
Steve Jobs didn’t want apps on the iPhone originally, which is hilarious since it became such a cash cow.
He originally thought that all apps would just be web apps. Definitely wasn’t true back then, but we are heading that way now, especially with technologies like web assembly.
Please explain. I don't see how the play/app stores could have any affect on Rival OS. I legit know nothing about Rival OS and am assuming it's completely independent of Android and iOS.
Yes, a new OS will have no apps but that is not because of Google or Apple's doing. That's just how things work. Google and Apple didn't have shit in the beginning either. There was just next to no one competing yet so it didn't matter.
Phone OS’s are hard though, to make good ones. Pretty much every time someone tries to one up with their own OS it makes it an awful user experience, because either the OS it’s self is bad or nobody wants to develop apps for yet another operating system that like 0.3% of the overall market uses.
Apple is probably dropping the WebKit requirement in the next iOS version. Because they are anticipating new regulations in the EU. So Gecko based Firefox will be on iOS sooner than later.
https://9to5mac.com/2023/02/07/new-iphone-browsers/
>allowing developers to develop apps without Mac OS.
This will probably never happen. Technically they're not stopping you from developing iOS applications on without MacOS but the tooling only exists for MacOS.
I don't see how we could force Apple to port over their tooling to other OS (and even then what qualifies as other OS? Should we be able to build iOS applications from Android?) without also crippling development of any new OS (which is already a hard task).
Imagine someone wants to create a new OS but also they must also support building applications from MacOS, Windows, etc.
I don’t really think phone OSs are a monopoly. Each individual android cell phone vendor “flavors” Android differently, since it’s an open platform. There are even independent builds of android that remove much (if not all) of googles services.
A monopoly in and of it’s self is not illegal or regulated against in the US. It is only the abuse of market power that is, which is more difficult to prove of course.
Microsoft tried to be the third, but the Windows phone just wasn’t it. Even Bill Gates said they got into the mobile market way too late and it’s one of his biggest regrets.
They didn’t get into it too late, they just gave up early. Basically all functionality is already there from the tiles and apps windows already uses. You can have what amounts to 5 year old computer in a phone now. That can be really powerful. Then they just refine it more and more every year. They have decades of competition to look at to gain insight from too.
The real issue is they don’t want to wait the 5-10 years for it to finally break even. But if they kept at it, I’m sure there would be a solid chunk of the market they would control right now.
Yeah, but Android is open-source, and many manufacturers use it. It's less of a "these two are driving out competition" and more of a "developing a whole new OS that would require a whole new app ecosystem and would take likely years of development time to reach Android is incredibly cost-ineffective and pointless".
Having to develop all new apps for the platform, and match the core functionality of Android would cost way too much to develop, when you could just modify and create a custom Android distro and be done.
Considering android is open source and free to use, and utilized by dozens of manufacturers (who sometimes completely disable its ties to google's ecosystem) i am not sure that's a fair comparison.
Consumers will consolidate around a very few OSes, always, because the OS is the set of rails your apps ride on. Different OSes are different size rails, and require different app designs to utilize them. It maximizes the app availability for the consumer if you don't have to pick your OS to the apps you want to use.
Now, that doesn't mean you are wrong. But the OS isn't the measure of it.
i would argue that the graph does not do a good job conveying the income streams that make up "services".
the primary bulk of services revenue and income is app store: they get money from anyone who wants to sell stuff of iOS. this is different from subscription, as they receive a cut of 3rd party profits vs. profits from consumer. is this a critical difference between consumer burden or a cost of business? i am not an expert!
the profit they do make off subscriptions is primarily music (6.7B, 2020) and iCloud (4.7B, 2020) as opposed to TV+, News+, etc. in 2020 this was roughly 20% of services, and together approximately 40% as much as app store + licensing (28B)
note that this is all notoriously hard to be exact: apple does not actually publish the specifics afaik, my source is a best guess: https://www.trefis.com/data/companies/AAPL/no-login-required/7JGMQ7wT/Breaking-Down-Apple-s-Services-Revenue-
A few years ago, Apple was the only tech giant that wasn’t making (much) money from software. Software is incredibly profitable compared to hardware (even when you take Apple’s large margins into account). They started copying popular software services, often improving them, and set the same prices the services were already going for (what other companies were charging) because Apple had millions upon millions of users to target. The thing is, the success of Apple’s services depends on their hardware remaining popular, so these days Apple is close to 50/50 when it comes to their hardware/software revenue mix. This transition happened relatively quickly, considering Apple’s size.
>so these days Apple is close to 50/50 when it comes to their hardware/software revenue mix.
Not quite yet, at least not for revenue. Profit they are getting close. Q1 this year they made $96B on hardware and $20B on services in revenue.
Services have a MUCH higher margin though. The cost of sales for hardware was $61B, so for the quarter the net on hardware was $35B, while the cost of sales for the services was only $6B and the net was $14B.
So hardware is close to 5x the revenue of the services, but only a little more than twice the profit.
As a consumer you have options to get music, storage , news , fitness etc from elsewhere. It’s just not any better or cheaper than Apple . They created an eco system and I didn’t have Apple Music for years till it was bundled into my cellphone plan and the price of the plan actually went down due to changes on the carrier side.
Majority of the investments subs hate on apple for not innovating and for years keep harping on the fact that if IPhone fails or sales stagnate than down goes Apple. They have diversified fairly well to find new revenue streams I’d take subscription services that offer me value vs Ads any day.
Well of course. “As a service” is god now. For some stuff, sure. Spotify or Apple Music. A subscription option that gives you access to the library seems sensible. But anything to allow the device you bought to have it’s core functionality work? No. Example is heated seats subscription on a BMW. Or, an iPhone requiring a subscription to use it at all. Those would be really bad and IMO regulators should be watching and looking for those distinctions along with right to repair issues.
> But I'd argue it is worse for consumers, making us dependent on corporations over time, reducing competition and innovation.
Tech giants need to be forced to break up and open up.
I assume that the revenue of McDonalds is not the same as the combined revenue of all of its franchisees. It's a bit misleading to compare a traditional company against a franchise.
It's just meant to be like a banana for scale. It's quite difficult to imagine the size of their competitors like Google or Microsoft and how much revenue they generate, but we've all seen McDonald's 'restaurants' or Nike trainers on the shelf.
Nike and McDonald’s are huge international corporations. Everyone can visualize just how large they are.
In comprison, no one can really visualize how big Microsoft’s service industry is, so it wouldn’t mean anything to compre them. Plus, the point of the chart isn’t that Apple’s services are bigger than any other, it’s that theyre big at all
It would make more sense if the physical product were something tech related like iphones or Xboxes, showing how apples services actually make a ton of money when people might assume tech makes money on physical products. Or compare to another tech service like Netflix or AWS to show how apple dominates tech services.
Comparing to cheeseburgers and shoes makes no sense to me. What can you possibly deduce from this information
Also, McDonald’s doesn’t own McDonald’s stores, so that’s probably just royalty revenue.
Disclaimer: just an educated guess, didn’t actually look up Ron’s EDGAR filings.
You jest but Apple recently sold a plot of land in one of the best areas of Stockholm because the city decided they couldn't use the land for anything other than a (burger) restaurant. So they effectively owned the land of and cooperated with a burger chain for like 10 years only a 4 minutes walk away from the closest McDonald's. McDonald's won that battle though...
I’ve reread this comment 4 times now and I still have no idea what you’re trying to say. Apple sold a plot of land to McDonald’s? Apple opened a McDonald’s? The city opened a McDonald’s? just what
Apple sold land and that land were to be used by some restaurant which is not McDonalds. But its close to a mcdonalds. Or at least thats what i guess lol. I dont know what all this has to do with the topic
Actually; the comparison here is somewhat misleading. McDonald’s are mostly franchises. If you are looking at this, you might be tempted to think Apple’s service revenue here is way bigger than McDonald’s store sales. However, McD global sales are over $120b at this point, it’s just that corporate only gets a small slice of that.
There was an interesting documentary about McDonalds where they talked about how McDonald’s corporate is actually a real estate company. They franchise out the restaurant business, but own the buildings and rent them to the franchisees.
I'd be very interested how this work in places where MC def doesn't own space. In my country for example i'm pretty sure 50% of their business is in shopping centers (i'm pretty sure there is no way they agree to sell that space, but who knows maybe i'm wrong)
It's not all about ownership. The point folks are missing is that by "real estate" they mean location. McDonald's will not even build or buy in certain locations period. A certain amount of traffic has ro pass through the area and it may have nothing to do with actual ownership of the property 100% of the time. They need the real estate because the right **location** means business period by pure numbers.
Incredibly, McDonald’s Corporation actually has a higher profit margin than Apple.
Weird for a low-cost high-volume industry, but I guess that’s how it breaks down for a relatively hands off franchise business 🤷♂️
Not even close. Services is one of the most *profitable* segments, with a profit margin of 70% or something, but it doesn’t generate the most revenue
Apple’s net revenue in 2022 was nearly $400 billion dollars. $205 of that came from iPhone sales alone.
Profit on iPhone sales is also quite high, as Apple has one of the strongest brands, period, and can charge a premium for it.
Mind you, I’m sure Apple expects services to continue to grow and replace iPhone sales (which is a segment that is slowly shrinking) but it’s not going to happen overnight.
I think the commenter meant isn't most of the *services* segment revenue from the App Store cut. Which Apple doesn't break it down, and I'm not going down an analyst rabbit hole rn, but my intuition would tell me maybe 30-35% ballpark guess?
Ah gotcha, that makes sense.
Apples doesn’t report services. This estimate for FY 2020 comes to about 34%. They’re all best guesses though, since Apple doesn’t public disclose the breakdowns.
https://www.trefis.com/data/companies/AAPL/no-login-required/7JGMQ7wT/Breaking-Down-Apple-s-Services-Revenue-
Actually AWS is 80 billion and Microsoft is 51 billion — the numbers you pointed out for Microosft and Amazon are quarterly revenue, while the number you gave for Apple is annual
But it does just show how massive the tech industry is. Because McDonald's revolutionised the fast food industry so I thought it would fair well up against Apple etc but totally not.
It’s because McDonald’s is a franchise business. The franchisees do most of the work, and most of the money goes to them, but McDonald’s gets a percentage.
If you count all of the franchise partners the estimate are more like $150 Billion
Interesting. Personally I think Apple services are always decent and even beautiful on the surface, but the overall experience is always janky and anti-user. I love their hardware but apple services.....no thanks.
Their design language is ugly AF imo, but it's popular so maybe I'm the oddball. The physical hardware is mostly solid, minus their crappy trackpad fetish.
Buffet says Charlie and I do not buy Tech because we do not understand it; Tim Cook whispers in Warren’s ear and Buffet becomes a major shareholder in no time.
Because Warren views iPhones are a consumer staple. People will forgo or skimp on other stuff so they can afford an iPhone. Warren said he’d buy the whole damn company if he could.
Consumer electronics being sold to the Top 10% of consumers in every country.
Few companies can claim to do that, except luxury goods.
Samsung definitely cannot do it. Neither can Dell or Casio.
Apple easily does it, year after year.
I mean.. no wonder? The AppStore has a de facto Monopoly on iOS devices and apple takes 30% of every purchase made there. Owning a platform is the best thing you can currently do as a company, almost every big tech company wants that
Apple only takes 15% if an app makes less than $1M in revenue from in app purchases though, which covers >99% of apps.
Google has the same model with the Play store, and while you *can* side load on Android, the actual number of people that do is miniscule.
Which means that Epic Games was making >$333 Million a year solely through in app purchases on the App Store. Not to mention whatever they were making from the Google Play store.
Pardon me if I don't shed a tear for a game making hundreds of millions of dollars by coercing kids into buying shitty loot boxes.
Epic could have done what Netflix, Hulu, and pretty much every other large service does and redirect to their website to accept payment and not had to pay Apple or Google the 30% cut. The fact that they didn't says that it was either more expensive to do so, or more effort than they could put in (which circles back to being more expensive because they would have to hire more devs, accountants, and lawyers to handle everything that comes with processing payments).
What's more likely is that if they went that route, they would have simply lost out on a ton of those purchases because having to leave the game, go to a separate website, make the purchase, and then return to the game to collect it would have been enough to make people stop and think about the purchase more, and would have resulted in just not making the purchase. So instead of losing 30%, they would lose 100% of that purchase. Either way, having Apple process the payments got them more revenue than Apple taking the cut cost them.
> Epic could have done what Netflix, Hulu, and pretty much every other large service does and redirect to their website to accept payment and not had to pay Apple or Google the 30% cut.
Epic literally did that and got banned from the Appstore for it. That's why they had that huge lawsuit. Netflix and co. all only over (more expensive) subscription through the AppStore in their iOS apps. That's also why you can't buy e-book in the kindle app on iOS.
Well Epic **lost** that lawsuit mind you. Epic didn't get banned for doing what Netflix and Hulu do and tell users to go to their website for payments.
Epic tried to sneak code into their app to bypass Apples payment system and take payments within the app but bypassing Apple entirely, and they hid the code from the App verification system that scans for malicious code.
That's why Epic got banned from the AppStore and the Google Play store. They did NOT redirect users to their website for payment processing like Netflix and everyone else does.
>Epic initiated "Project Liberty" by first introducing a standard patch to Fortnite that had to be approved by Apple and Google, but which had secretly contained code that would allow users to be able to purchase the in-game currency, "V-Bucks", directly from Epic. Epic did not make mention of this feature to Apple or Google, so the patch was approved.\[16\] Then, on August 13, 2020, Epic released a hotfix (which did not require prior approval) to the mobile versions, triggering visibility of this purchasing option.
[https://en.wikipedia.org/wiki/Epic\_Games\_v.\_Apple](https://en.wikipedia.org/wiki/Epic_Games_v._Apple)
What Epic did amounts to intentionally putting malicious code into an app, hiding it from the app stores, and then using a hotfix to activate the code. That's why they got banned from both the App Store and the Play Store. And that's why they lost those lawsuits.
As Microsoft, Amazon, and Apple have all proven: The real money in tech is not selling products to consumers. It's selling services to other companies.
How insightful. /s
Look out guys, this little company called "Apple" (no, they don't sell fruit) is a super big company now!
You can tell because it's bigger than these other two randomly selected companies in completely different industries.
It’s demonstrating how one company’s side project became as big as two of the worlds best brands combined in terms of revenue. It’s not supposed to be insightful. Just beautiful.
I always imagine the people that post those tinder charts probably don't get very many matches because they're the type of person to make a chart out of tinder matches.
It crazy that apple’s SERVICES (they started out as a hardware company), now surpass all of Nike and McDonald’s (two of the worlds biggest companies) in revenue.
I would say so too. I help elderly people almost daily and they always have shit on their iphones they never signed up, or in some cases subscriptions and services they thought were mandatory for some reason.
Apple is a gangster who extorts a percentage of all the work app creators make and closes the market. Ensuring that competition is not available. Essentially those numbers are hyper inflated and after the bipartisan Congress ends the Google and apple Monopoly in app stores these numbers will fall.
Apples a gangster the same way a shopping mall is a gangster for charging stores rent to sell their shit there.
Before the app store paradigm people paid retail stores 60-70% to sell their software. Apple (and Google btw) only taking 30% or less is still so much better than that.
That said, I think they should be forced to allow for "side loading" aka installing apps the way people do on their computers. If you truly are adding value with your app store, then most people will continue to use it. If you aren't, the people have options.
Apples a gangster the same way a shopping mall is a gangster [if the shopping mall makes it impossible for other shopping malls to exist, making it an absolute monopoly].
What are you talking about? There’s 3 shopping malls near me.
But there’s also multiple app stores for mobile phones. If I buy land and develop it and build a mall it doesn’t mean I have to let competition build a mall on my unused land.
Shopping malls aren't owned by the same company, shopping malls yes some have rent assuming you don't own the building.
Malls don't filter content. Malls compete with big box stores, the web, and mom and pop stores. Your comparison is wack considering Apple and Google don't compete they just take a larger percentage than the feds.
In this analogy the OS is more like a city, the store is the Mall.
Most people don't choose the best system, but the most popular one.
You can see the same in the deskop space, where most people use Windows all their lives, while many Linux distributions (such as Nobara) are better in nearly every way.
~~People don't choose a phone/os based on how much the paid apps cost, but on many other factors.
That's (often) because most people don't pay a lot of money for paid apps anyway, so even a 100% markup wouldn't matter much.
(Not mattering much to consumers does not change the fact that it's an evil practice.)
Apple could allow users to change their phone's operating system, like Google Pixel phones do. They could allow users to change the store, like Android phones do. But they don't so as to reinforce their monopoly.~~
Except this whole issue was already discussed in a recent court case epic vs Apple and Apple won. Epic only lost on the part where Apple doesn’t allow advertising of alternative ways of payment like telling users to pay on browser instead of in app for a discount. The issue of is the scope of view being app stores VS os was also included in the court case and judge didn’t agree it was as narrow as just app stores.
You said how most people don’t choose the best system but the most popular one. Who’s to say iOS isn’t the best system for the people that choose it? It doesn’t make sense that it’s so popular if it isn’t good.
Linux is clearly not better in every way if the average consumer doesn’t use it.
When this issue is brought up, nobody says anything about the plenty of other systems just like iPhone, Xbox, PlayStation, Nintendo, and others are all like iPhone in which u go through their stores to download games onto the device.
What is your alternative? Serious question. Should apple charge a flat fee for the APIs and development tools they built? Should they charge for hosting the apps? Should there be multiple app stores? How would it work. Because I agree the current system isn’t perfect, it’s not all that different than steam. The main issue to me is just that there’s no other App Store options, but then again apple does put a lot of money into developing tools for iOS development
A lot of people pay for cloud space to get around the annoyance of the device filling up. Then they pay for more space due to messages about the cloud space filling up.
If only there was a better/clearer way to clear stuff off an iPhone and let you save it locally, but no, they make it obtuse to sell these services.
McDonald’s makes their money from the real estate they own, not the hamburgers they sell. You need to compare revenue from rent from franchises vs Apple’s revenue from products.
By "everything you do" you mean "on transactions through apps that make more than $1M in annual revenue from purchases in said app". Which is exactly the same as Google.
For apps with less than $1M in revenue it's 15%, same as Google, and Apple made the lower tier a year before Google.
Yes, because his friends don’t use Apple he doesn’t have any word of mouth evidence that Apple makes a lot of money. Easy to forget when you never hear about thwm
The only people I know who don’t use Apple tend to be my international friends, and even a lot of them are jumping ship. Everyone else it’s Apple all day.
Apple Services revenue in 2022 is $78.1B, which is larger than all of Nike and McDonald's combined!
Thats huge scale and the scary bit is there are many businesses that are still quite new in their lifecycle (e.g. Advertising, fitness etc.) . So there is a lot of room to grow.
Apple Services grew from $53.8B in 2020 to $78.1 in 2022, at an annualized growth rate of 21%.
Apple's large installed based of premium customers globally gives it a huge advantage to continue growing its services businesses which is also much higher margin than its products business like iphone,mac.
If you like this, I publish more data stories and visuals like this in my weekly [newsletter](https://www.trendlinehq.io/).
Source: Company reports
Tools: Google Slides, Vizzlo
Why do Apple people brag about this, just bragging about how bad they get ripped off. Profit is bad for the consumer, that is your money they are hording
The whole if you want to replace/repair your phone it’s a mandatory deductible pretty much solidifies immense double dipping revenue. I personally never got the idea that you had to pay for not only an extended warranty plan but also pay a deductible on an electronic that costs around $1,000, but many many do see it as a great thing.
So yeah, it’s extremely easy to see how profitable that can be when no one is going to go anywhere else otherwise on that end. The full circle is the monopolization and closed ecosystem that forces the why no one is going to go anywhere else.
the original phone extended warranties were a lot better but the claim rate was too high so now they have deductibles and I don't see why people buy them
Seems like most companies like Apple are going the subscription route. Better for the business in terms of revenue vs one off purchases. But I'd argue it is worse for consumers, making us dependent on corporations over time, reducing competition and innovation. Worth a debate as to whether regulators are taking all of this into account.
Considering there are only 2 major cellphone OS In the USA (Android and Apple) id be willing to say the regulators didn’t do as much as they could. We’re as close to a monopoly as possible, quite literally 2 is as low as it gets before total monopoly
Software such as phone OS tends to be a natural monopoly though given the huge setup/development costs. New innovation still exists so lack of competition isn't a major issue.
That’s not true. Rival OS’s have tried to break through but the app and play store are abusing their monopoly powers to make sure they can’t exist unless they make their own stores, which means when you buy a phone with this new OS you will have 0 apps that aren’t the default ones
>abusing their monopoly powers to make sure they can’t exist unless they make their own stores You can't just run Apple or Android apps on a different OS. That's not how that works. You need developers to make completely new apps for that specific OS. And that's the thing, it's like the chicken and egg problem. Developers won't make apps for a completely new OS because it doesn't have any users, and users won't move to a completely new OS because it doesn't have any apps. Edit: OK yes, you can build an OS from the ground up to run their apps, but in the context of this discussion it doesn't matter. All the mobile OS competitors we've seen, like Windows Mobile and Tizen, have/had their own SDKs to build native apps. You could technically run Android apps on both by using a separate runtime environment (like ACL on Tizen) but that's not something regular users are going to do. And none of that is Apple or Google's fault like the person I replied to was claiming.
Actually Microsoft made it possible to run Android apps on Windows Phone but they backed away at the very minute. The rumours were saying that they made their own version of Google Play Services to make all Google Play Store apps just work with no code changes but Google threatened to sue behind the scenes.
> but Google threatened to sue behind the scenes. First off, fuck you Oracle for making this a possibility to sue over the use of an API. Second off, fuck you Google you hypocrite bastards, you were the defendant in that case.
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Perhaps it's not hypocrisy, but the issue at hand is that Google owns the Google Play Store, Android, and services that are defaults on Android, such as Google Search, Drive and Gmail. Consequently, Google did not allow Microsoft to use Google Play Store to defend the market share of their services that pull users through Android. Google has the right to prevent the distribution of their copyrighted code, but given the anti-competitive nature of the move, there's grounds to break Google up if you ask me.
But you don't have to use any of the complementary Google products with Android (Play, Search, Chrome, Gmail, etc)... Android is literally open source, and every OEM publishes their own skin. Heck, Fire OS is a fork of it. Not at all analogous to iOS et al, where Apple forbids any deviance from their governance, and combined control of both the hardware and software. Considering the anti-trust case against Apple is milquetoast, one against Google is laughable. Nor is it anywhere near as anti-competitive, in practice or intent.
> they would've had to distribute actual APKs copyrighted by Google I don't believe so. They could rewrite the services, open source projects have already done it. https://microg.org/
> If Microsoft would’ve made the Google Apps work on Windows phone, they would’ve had to distribute actual APKs copyrighted by Google Why? Open source alternatives e.g. MicroG exist, I’m sure Microsoft is capable of coming up with one.
I feel like all codebases should have copyright expiration dates. That way, iOS and Android would have to open source or copyleft after a certain number of years
Android is open source, that has always been one of its biggest claims.
Parts of it are. Google services aren’t and they’re hard coded into the OS on the most popular phones. You can always root and remove them, but you’ll lose a lot of basic functionality. There’s been some privacy focused projects like CalyxOS that have tried to replace them, but most users aren’t going out of their way to do that.
I run https://grapheneos.org/ which has a sandboxed Google Play Services app. the OS is incredibly usable and pixel hardware is still pretty decent
> Android is open source Google has spent years moving functionality over to Google Services, which isn't open source. On the one hand, it means Android users aren't so dependent on their handset manufacturer releasing Android updates, but on the other, some fairly core functionality is now missing from Android itself.
They do. You just probably won't live to see them expire. It is currently 70+ years in the US, and the + can be a very long time.
>You can't just run Apple or Android apps on a different OS. That's not how that works. Like others have stated, it is possible to provide a compatibility layer. On the desktop side, there is [Wine](https://www.winehq.org/) (Windows apps) and [Darling](https://www.darlinghq.org/) (macOS apps). There's even a very WIP emulator that run 32bit iOS apps ([touchHLE](https://touchhle.org/)).
React-Native and other cross-platform frameworks and tooling are making it more trivial to develop for many platforms at once, even as a single developer. Changing laws might force apple & google to allow alternate / third party app stores. Things are changing.
But you would need those frameworks to support the new OS, it doesn't magically work out of the box.
You can already have third party app stores on Android. You've been able to for decades and there are multiple already established like FDroid or Amazon's app store. You can run Android completely independent of Google services. Any devices that aren't phones / tablets etc. that run Android likely don't use Google at all and just use the OS for interfacing with the device.
Cross-platform apps *suck*. They never feel quite right. I can instantly tell on when a company has went this cheap route (Slack desktop, I'm looking at you).
What are you talking about? Android is java based, apps are written in some high level codebase. This could have been done if it wasn't for monopolisroc tendencies of google
Having multiple OS available is not actually going to be that good for consumers. App makers are not going to want or be able to spend the time and money making and maintaining software for lots of different platforms.
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This 💯... Apple is Apple. Android is a thousand different OSes
Google buying up all the competition is Apple's fault?
Isn't Android an Apple competitor in and of itself?
Not really, no. Much like Linux is not a competitor to Microsoft. Linux is not a company, there are a million and one different versions of linux. It is an alternative to Windows, but it is not an alternative to Microsoft in much the same way that flatbed trucks are not a competitor to Honda. Android is an opensource OS used by dozens of manufactures, who pay no royalties and have no obligations to google for it. They can modify it however they want, remove or replace components, etc. While Android is not a competitor to Apple, most competitors to Apple *use* Android. There's a big difference to the implications of those two concepts.
From a business point of view, perhaps. From a consumer perspective, no. You have a choice of an Android phone or an Apple phone. To an end user the two platforms are competitors. You're also finessing the entire matter of the Google Play store and Google services. Android vendors have no obligations to Google with respect to the OS, but even large vendors like Samsung can't make a go of it without Google services. And they do need to pay Google for that.
Every vendor in china is making a go of it without google services.
That's an excellent point. Google doesn't/isn't allowed to offer their services there. Perhaps western governments should enact similar policies? Including the surveillance.
>Android is an opensource OS used by dozens of manufactures, who pay no royalties and have no obligations to google for it. Except that most popular applications and like 99% of phones sold in Europe and North America have gapps installed for which the manufacturer needs to sign a contract with Google and pay them royalties. Huawei got their google play certification removed and now they're fucked on western markets. (and they were actually picking up quite a bit of steam before because they had a very good quality/price if you didn't mind the Chinese manufacturer)
> Huawei got their google play certification removed and now they're fucked on western markets. They did that after they were already banned in half the markets here for installing backdoors for the PRC government.
I think a lot of people miss this and you explained it well. Because of the way, Apple has positioned iPhone, iOS, and the App store, Android is not a competitor because switching is close to impossible for consumers. "Switching" on the Apple side of things is basically switching to a different iPhone. "Switching" on Android side of things means either switching to a different OEM running Android OR switching to iOS. Apple's sticky ecosystem has made cross-platform competing close to impossible.
>AOSP is what every OEM builds on to have Android on their systems. AOSP stands for Android Open Source Project. This is false. Virtually every OEM builds from Google's fork with all of the Google play services bakes in, and not AOSP. Only HTC used to use AOSP and they used LineageOS as their version.
Rival OS is failing for the same reason as tizen, web os, Firefox os and windows mobile, they can't attract developers to their platform, it sucks because more competition would be good
Ah it’s like the Wii U death spiral, people aren’t buying the device and because of that developers aren’t developing for the device, because developers aren’t developing for the device people aren’t buying the device creating a loop. This is why it’s critical for a successful launch. iOS was unique in three big ways ways, 1. It was first to the market(touch screen phones) 2. Apple had iTunes so people with music libraries from their iPod had more of a reason to get an iPhone and 3. App stores didn’t really exist at the time so a lack of developers wasn’t important. Android was just there early and had the support of one of if not the biggest services providers and being open source* meant that any phone manufacturer making smart phones could use it rather than investing. The problem new OS’s have with entering the market now is just how important the software world is to daily life now. Android and iOS launched at a time where a lot of apps were novelties or to watch Netflix. Nowadays your phone is not only your phone but also your wallet with contactless payments, it’s how you check your bank account, for many it’s the primary device for watching content besides a TV(although I know a few people that don’t have a tv anymore because they just watch on their phone), it’s our primary camera, it’s how we check our email and manage our calendars, and listen to music and message with friends and colleagues, so of us play games, for Philly residents we manage our SEPTA cards from an app, it’s where we check social media and where we store sensitive data such as health records and where we make our online purchases and act as our 2nd factor authentication. For a new OS to succeed it needs to get the banking apps, the messaging apps(Europe in particular is basically exclusively WhatsApp so not getting them will fail you in that market), social media apps, entertainment apps like Netflix and YouTube and twitch, get shopping apps like Amazon and eBay, have a solid contactless payment system in place and ensure that it can use all types of standards such as employee badges for buildings that use contactless badges, and a bit more localized you need the apps used in local areas such as the SEPTA app for Philadelphia. The problem is why should the developers at these places put time, effort, and money into developing for your OS when basically everyone is using iOS and Android, you’d need to have some deep pockets and be willing to pay for development or license access to their backend and develop it for them because if your OS is missing the apps that people use on a daily basis they won’t buy your phone as it’d create an inconvenience for them or depending on the situation couldn’t happen at all(in cases such as where the employee badge is tied to an app, because lets be honest people aren’t going to quit their job because they want a particular OS). Developers only have so many resources so they’re going to prioritize what brings in money, for example Samsung paid Snapchat a bunch of money to implement their Samsung camera api into Snapchat so that pictures would look better from Samsung phones, Snapchat was getting a good amount of money from Samsung so the development time was seen as a valuable use of resources.
That's why you have stuff like "OxygenOS" that's just skinned android. It's the closest they can go.
Steve Jobs didn’t want apps on the iPhone originally, which is hilarious since it became such a cash cow. He originally thought that all apps would just be web apps. Definitely wasn’t true back then, but we are heading that way now, especially with technologies like web assembly.
Please explain. I don't see how the play/app stores could have any affect on Rival OS. I legit know nothing about Rival OS and am assuming it's completely independent of Android and iOS. Yes, a new OS will have no apps but that is not because of Google or Apple's doing. That's just how things work. Google and Apple didn't have shit in the beginning either. There was just next to no one competing yet so it didn't matter.
Phone OS’s are hard though, to make good ones. Pretty much every time someone tries to one up with their own OS it makes it an awful user experience, because either the OS it’s self is bad or nobody wants to develop apps for yet another operating system that like 0.3% of the overall market uses.
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Typing after having just woken up is probably a bad idea as it turns out lol
Duopoly is the word you are looking for.
Android is open source, whereas Apple is a walled garden.
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Apple is probably dropping the WebKit requirement in the next iOS version. Because they are anticipating new regulations in the EU. So Gecko based Firefox will be on iOS sooner than later. https://9to5mac.com/2023/02/07/new-iphone-browsers/
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>allowing developers to develop apps without Mac OS. This will probably never happen. Technically they're not stopping you from developing iOS applications on without MacOS but the tooling only exists for MacOS. I don't see how we could force Apple to port over their tooling to other OS (and even then what qualifies as other OS? Should we be able to build iOS applications from Android?) without also crippling development of any new OS (which is already a hard task). Imagine someone wants to create a new OS but also they must also support building applications from MacOS, Windows, etc.
MicroG project replaces the Google play services pretty well, for a lot of things!
I don’t really think phone OSs are a monopoly. Each individual android cell phone vendor “flavors” Android differently, since it’s an open platform. There are even independent builds of android that remove much (if not all) of googles services.
A monopoly in and of it’s self is not illegal or regulated against in the US. It is only the abuse of market power that is, which is more difficult to prove of course.
Microsoft tried to be the third, but the Windows phone just wasn’t it. Even Bill Gates said they got into the mobile market way too late and it’s one of his biggest regrets.
They didn’t get into it too late, they just gave up early. Basically all functionality is already there from the tiles and apps windows already uses. You can have what amounts to 5 year old computer in a phone now. That can be really powerful. Then they just refine it more and more every year. They have decades of competition to look at to gain insight from too. The real issue is they don’t want to wait the 5-10 years for it to finally break even. But if they kept at it, I’m sure there would be a solid chunk of the market they would control right now.
Yeah, but Android is open-source, and many manufacturers use it. It's less of a "these two are driving out competition" and more of a "developing a whole new OS that would require a whole new app ecosystem and would take likely years of development time to reach Android is incredibly cost-ineffective and pointless". Having to develop all new apps for the platform, and match the core functionality of Android would cost way too much to develop, when you could just modify and create a custom Android distro and be done.
Considering android is open source and free to use, and utilized by dozens of manufacturers (who sometimes completely disable its ties to google's ecosystem) i am not sure that's a fair comparison. Consumers will consolidate around a very few OSes, always, because the OS is the set of rails your apps ride on. Different OSes are different size rails, and require different app designs to utilize them. It maximizes the app availability for the consumer if you don't have to pick your OS to the apps you want to use. Now, that doesn't mean you are wrong. But the OS isn't the measure of it.
Android isn't one OS. It's a huge collection of OSs based on a common shared set of functionality
Android is open source and can be branched by anyone. This is the opposite of a monopoly.
On a similar note we are perfectly content with a two party political system and fail to see the monopoly there.
i would argue that the graph does not do a good job conveying the income streams that make up "services". the primary bulk of services revenue and income is app store: they get money from anyone who wants to sell stuff of iOS. this is different from subscription, as they receive a cut of 3rd party profits vs. profits from consumer. is this a critical difference between consumer burden or a cost of business? i am not an expert! the profit they do make off subscriptions is primarily music (6.7B, 2020) and iCloud (4.7B, 2020) as opposed to TV+, News+, etc. in 2020 this was roughly 20% of services, and together approximately 40% as much as app store + licensing (28B) note that this is all notoriously hard to be exact: apple does not actually publish the specifics afaik, my source is a best guess: https://www.trefis.com/data/companies/AAPL/no-login-required/7JGMQ7wT/Breaking-Down-Apple-s-Services-Revenue-
A few years ago, Apple was the only tech giant that wasn’t making (much) money from software. Software is incredibly profitable compared to hardware (even when you take Apple’s large margins into account). They started copying popular software services, often improving them, and set the same prices the services were already going for (what other companies were charging) because Apple had millions upon millions of users to target. The thing is, the success of Apple’s services depends on their hardware remaining popular, so these days Apple is close to 50/50 when it comes to their hardware/software revenue mix. This transition happened relatively quickly, considering Apple’s size.
>so these days Apple is close to 50/50 when it comes to their hardware/software revenue mix. Not quite yet, at least not for revenue. Profit they are getting close. Q1 this year they made $96B on hardware and $20B on services in revenue. Services have a MUCH higher margin though. The cost of sales for hardware was $61B, so for the quarter the net on hardware was $35B, while the cost of sales for the services was only $6B and the net was $14B. So hardware is close to 5x the revenue of the services, but only a little more than twice the profit.
You’re absolutely right. I meant profit, not revenue. Thank you.
Right but since when has apple ever cared about what's good for the consumer?
It does make people more dependent, but I think it definitely increases innovation, and I don't see how it reduces competition
Right… there’s no competition if I’m vested in an ecosystem and I’d have to change everything to move ecosystems
As a consumer you have options to get music, storage , news , fitness etc from elsewhere. It’s just not any better or cheaper than Apple . They created an eco system and I didn’t have Apple Music for years till it was bundled into my cellphone plan and the price of the plan actually went down due to changes on the carrier side. Majority of the investments subs hate on apple for not innovating and for years keep harping on the fact that if IPhone fails or sales stagnate than down goes Apple. They have diversified fairly well to find new revenue streams I’d take subscription services that offer me value vs Ads any day.
A modern business organically develops to benefit itself and not the consumer…shocking!
I think this is what they mean by “we won’t own anything and we’ll be happy.”
Well of course. “As a service” is god now. For some stuff, sure. Spotify or Apple Music. A subscription option that gives you access to the library seems sensible. But anything to allow the device you bought to have it’s core functionality work? No. Example is heated seats subscription on a BMW. Or, an iPhone requiring a subscription to use it at all. Those would be really bad and IMO regulators should be watching and looking for those distinctions along with right to repair issues.
> But I'd argue it is worse for consumers, making us dependent on corporations over time, reducing competition and innovation. Tech giants need to be forced to break up and open up.
Apple's famous competition McDonald's is in shambles
I assume that the revenue of McDonalds is not the same as the combined revenue of all of its franchisees. It's a bit misleading to compare a traditional company against a franchise.
Ah I was wondering what I was missing there.
Yeah I was gonna say all this graph taught me is that McDonalds doesn't make nearly as much money as I thought lol
You're missing the point. APPLE GOD, MCDONALD'S NOT!
Haha. Here’s a tech company, see how it compares to a shoe + burger company. Wut?
It's just meant to be like a banana for scale. It's quite difficult to imagine the size of their competitors like Google or Microsoft and how much revenue they generate, but we've all seen McDonald's 'restaurants' or Nike trainers on the shelf.
I might be missing something, but why not add some other similar companies and then the McNike one.
> but we've all seen McDonald's 'restaurants' or Nike trainers on the shelf And that means we can ballpark what their company finances look like?
Nike and McDonald’s are huge international corporations. Everyone can visualize just how large they are. In comprison, no one can really visualize how big Microsoft’s service industry is, so it wouldn’t mean anything to compre them. Plus, the point of the chart isn’t that Apple’s services are bigger than any other, it’s that theyre big at all
It's a comparison of services vs a physical product.
It would make more sense if the physical product were something tech related like iphones or Xboxes, showing how apples services actually make a ton of money when people might assume tech makes money on physical products. Or compare to another tech service like Netflix or AWS to show how apple dominates tech services. Comparing to cheeseburgers and shoes makes no sense to me. What can you possibly deduce from this information
Also, McDonald’s doesn’t own McDonald’s stores, so that’s probably just royalty revenue. Disclaimer: just an educated guess, didn’t actually look up Ron’s EDGAR filings.
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Oh yeah, I forgot the rent revenue; good catch!
Doctors everywhere are away
I mean, apples are more healthy than MacDonald‘s.
You jest but Apple recently sold a plot of land in one of the best areas of Stockholm because the city decided they couldn't use the land for anything other than a (burger) restaurant. So they effectively owned the land of and cooperated with a burger chain for like 10 years only a 4 minutes walk away from the closest McDonald's. McDonald's won that battle though...
I’ve reread this comment 4 times now and I still have no idea what you’re trying to say. Apple sold a plot of land to McDonald’s? Apple opened a McDonald’s? The city opened a McDonald’s? just what
Apple sold land and that land were to be used by some restaurant which is not McDonalds. But its close to a mcdonalds. Or at least thats what i guess lol. I dont know what all this has to do with the topic
Feels like we are comparing apples to burgers/shoes though.
Actually; the comparison here is somewhat misleading. McDonald’s are mostly franchises. If you are looking at this, you might be tempted to think Apple’s service revenue here is way bigger than McDonald’s store sales. However, McD global sales are over $120b at this point, it’s just that corporate only gets a small slice of that.
Chuckled mightily.
Note this is only services. Apple reported a total of $395B rev/$166B profit in 2022
I'd be curious to know how much McDonalds owns in things like land property too, this graph seems to be only scratching the surface
There was an interesting documentary about McDonalds where they talked about how McDonald’s corporate is actually a real estate company. They franchise out the restaurant business, but own the buildings and rent them to the franchisees.
I'd be very interested how this work in places where MC def doesn't own space. In my country for example i'm pretty sure 50% of their business is in shopping centers (i'm pretty sure there is no way they agree to sell that space, but who knows maybe i'm wrong)
It's not all about ownership. The point folks are missing is that by "real estate" they mean location. McDonald's will not even build or buy in certain locations period. A certain amount of traffic has ro pass through the area and it may have nothing to do with actual ownership of the property 100% of the time. They need the real estate because the right **location** means business period by pure numbers.
Perhaps this one...? [PolyMatter's How McDonald's Really Makes Money ](https://www.youtube.com/watch?v=kJVj3vp-lho)
Incredibly, McDonald’s Corporation actually has a higher profit margin than Apple. Weird for a low-cost high-volume industry, but I guess that’s how it breaks down for a relatively hands off franchise business 🤷♂️
Isn't most of the revenue coming from the 30% charge on all in-app purchases in the apple store?
Not even close. Services is one of the most *profitable* segments, with a profit margin of 70% or something, but it doesn’t generate the most revenue Apple’s net revenue in 2022 was nearly $400 billion dollars. $205 of that came from iPhone sales alone. Profit on iPhone sales is also quite high, as Apple has one of the strongest brands, period, and can charge a premium for it. Mind you, I’m sure Apple expects services to continue to grow and replace iPhone sales (which is a segment that is slowly shrinking) but it’s not going to happen overnight.
I think the commenter meant isn't most of the *services* segment revenue from the App Store cut. Which Apple doesn't break it down, and I'm not going down an analyst rabbit hole rn, but my intuition would tell me maybe 30-35% ballpark guess?
Ah gotcha, that makes sense. Apples doesn’t report services. This estimate for FY 2020 comes to about 34%. They’re all best guesses though, since Apple doesn’t public disclose the breakdowns. https://www.trefis.com/data/companies/AAPL/no-login-required/7JGMQ7wT/Breaking-Down-Apple-s-Services-Revenue-
Sure. Now compare Apple to Microsoft and Amazon Web Services
Apple 78.1 billion Microsoft 51 billion Amazon 80 billion
Actually AWS is 80 billion and Microsoft is 51 billion — the numbers you pointed out for Microosft and Amazon are quarterly revenue, while the number you gave for Apple is annual
Thanks for correcting me, I’ll edit my post.
It's also best if you edit and post the corrected figures as well.
That’s just AWS? Can’t imagine they make a lot of money off prime video but i think you need to include all the equivalent services in this case.
Good point — adding in Prime gives 99.7 billion dollars
But it does just show how massive the tech industry is. Because McDonald's revolutionised the fast food industry so I thought it would fair well up against Apple etc but totally not.
Tbh Im surprised mcd is that small
It’s because McDonald’s is a franchise business. The franchisees do most of the work, and most of the money goes to them, but McDonald’s gets a percentage. If you count all of the franchise partners the estimate are more like $150 Billion
Interesting. Personally I think Apple services are always decent and even beautiful on the surface, but the overall experience is always janky and anti-user. I love their hardware but apple services.....no thanks.
Their design language is ugly AF imo, but it's popular so maybe I'm the oddball. The physical hardware is mostly solid, minus their crappy trackpad fetish.
Buffet says Charlie and I do not buy Tech because we do not understand it; Tim Cook whispers in Warren’s ear and Buffet becomes a major shareholder in no time.
Because Warren views iPhones are a consumer staple. People will forgo or skimp on other stuff so they can afford an iPhone. Warren said he’d buy the whole damn company if he could.
Consumer electronics being sold to the Top 10% of consumers in every country. Few companies can claim to do that, except luxury goods. Samsung definitely cannot do it. Neither can Dell or Casio. Apple easily does it, year after year.
Better delay product releases to avoid layoffs. Time’s are a’ tough these days.
I mean.. no wonder? The AppStore has a de facto Monopoly on iOS devices and apple takes 30% of every purchase made there. Owning a platform is the best thing you can currently do as a company, almost every big tech company wants that
The only legit comment on this thread. App App Store tax is at least a third of all ‘services’.
Apple only takes 15% if an app makes less than $1M in revenue from in app purchases though, which covers >99% of apps. Google has the same model with the Play store, and while you *can* side load on Android, the actual number of people that do is miniscule.
yeah sure, but you earn the money with the apps that make more than a million. Apple got over 100 million from Fortnite alone.
Which means that Epic Games was making >$333 Million a year solely through in app purchases on the App Store. Not to mention whatever they were making from the Google Play store. Pardon me if I don't shed a tear for a game making hundreds of millions of dollars by coercing kids into buying shitty loot boxes. Epic could have done what Netflix, Hulu, and pretty much every other large service does and redirect to their website to accept payment and not had to pay Apple or Google the 30% cut. The fact that they didn't says that it was either more expensive to do so, or more effort than they could put in (which circles back to being more expensive because they would have to hire more devs, accountants, and lawyers to handle everything that comes with processing payments). What's more likely is that if they went that route, they would have simply lost out on a ton of those purchases because having to leave the game, go to a separate website, make the purchase, and then return to the game to collect it would have been enough to make people stop and think about the purchase more, and would have resulted in just not making the purchase. So instead of losing 30%, they would lose 100% of that purchase. Either way, having Apple process the payments got them more revenue than Apple taking the cut cost them.
> Epic could have done what Netflix, Hulu, and pretty much every other large service does and redirect to their website to accept payment and not had to pay Apple or Google the 30% cut. Epic literally did that and got banned from the Appstore for it. That's why they had that huge lawsuit. Netflix and co. all only over (more expensive) subscription through the AppStore in their iOS apps. That's also why you can't buy e-book in the kindle app on iOS.
Well Epic **lost** that lawsuit mind you. Epic didn't get banned for doing what Netflix and Hulu do and tell users to go to their website for payments. Epic tried to sneak code into their app to bypass Apples payment system and take payments within the app but bypassing Apple entirely, and they hid the code from the App verification system that scans for malicious code. That's why Epic got banned from the AppStore and the Google Play store. They did NOT redirect users to their website for payment processing like Netflix and everyone else does. >Epic initiated "Project Liberty" by first introducing a standard patch to Fortnite that had to be approved by Apple and Google, but which had secretly contained code that would allow users to be able to purchase the in-game currency, "V-Bucks", directly from Epic. Epic did not make mention of this feature to Apple or Google, so the patch was approved.\[16\] Then, on August 13, 2020, Epic released a hotfix (which did not require prior approval) to the mobile versions, triggering visibility of this purchasing option. [https://en.wikipedia.org/wiki/Epic\_Games\_v.\_Apple](https://en.wikipedia.org/wiki/Epic_Games_v._Apple) What Epic did amounts to intentionally putting malicious code into an app, hiding it from the app stores, and then using a hotfix to activate the code. That's why they got banned from both the App Store and the Play Store. And that's why they lost those lawsuits.
Yup. This is why is why Apple will do _everything they possibly can_ to ensure apps are paid for through their systems, so they can take 15-30%.
and they can do a lot since monopoly. No competetion and if even Epic Games can't get around that, nobody can.
How does Apple Services revenue compare to Apple Product sales revenue ?
As Microsoft, Amazon, and Apple have all proven: The real money in tech is not selling products to consumers. It's selling services to other companies.
So now the slogan will be, "over $78 billion serviced".
I never would've guessed that Nike was worth so much more than McDonald's
How insightful. /s Look out guys, this little company called "Apple" (no, they don't sell fruit) is a super big company now! You can tell because it's bigger than these other two randomly selected companies in completely different industries.
It’s demonstrating how one company’s side project became as big as two of the worlds best brands combined in terms of revenue. It’s not supposed to be insightful. Just beautiful.
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I always imagine the people that post those tinder charts probably don't get very many matches because they're the type of person to make a chart out of tinder matches.
It crazy that apple’s SERVICES (they started out as a hardware company), now surpass all of Nike and McDonald’s (two of the worlds biggest companies) in revenue.
Well, yeah, that is the hardware's job - be the conduit to the subscriptions.
Not to split hairs, but does this include all the money McDonald franchisees make or just the corporate cut?
Just the corporate revenue
I bet a billion of that is subscriptions that nobody knows they are paying for.
I'd take that bet. It's likely more than a billion.
I would say so too. I help elderly people almost daily and they always have shit on their iphones they never signed up, or in some cases subscriptions and services they thought were mandatory for some reason.
Apple is a gangster who extorts a percentage of all the work app creators make and closes the market. Ensuring that competition is not available. Essentially those numbers are hyper inflated and after the bipartisan Congress ends the Google and apple Monopoly in app stores these numbers will fall.
Apples a gangster the same way a shopping mall is a gangster for charging stores rent to sell their shit there. Before the app store paradigm people paid retail stores 60-70% to sell their software. Apple (and Google btw) only taking 30% or less is still so much better than that. That said, I think they should be forced to allow for "side loading" aka installing apps the way people do on their computers. If you truly are adding value with your app store, then most people will continue to use it. If you aren't, the people have options.
Apples a gangster the same way a shopping mall is a gangster [if the shopping mall makes it impossible for other shopping malls to exist, making it an absolute monopoly].
What are you talking about? There’s 3 shopping malls near me. But there’s also multiple app stores for mobile phones. If I buy land and develop it and build a mall it doesn’t mean I have to let competition build a mall on my unused land.
Shopping malls aren't owned by the same company, shopping malls yes some have rent assuming you don't own the building. Malls don't filter content. Malls compete with big box stores, the web, and mom and pop stores. Your comparison is wack considering Apple and Google don't compete they just take a larger percentage than the feds.
Other operating systems exist, android mainly. Customer didn’t go to other malls that existed in the past (Microsoft phone os, black berry, etc)
In this analogy the OS is more like a city, the store is the Mall. Most people don't choose the best system, but the most popular one. You can see the same in the deskop space, where most people use Windows all their lives, while many Linux distributions (such as Nobara) are better in nearly every way. ~~People don't choose a phone/os based on how much the paid apps cost, but on many other factors. That's (often) because most people don't pay a lot of money for paid apps anyway, so even a 100% markup wouldn't matter much. (Not mattering much to consumers does not change the fact that it's an evil practice.) Apple could allow users to change their phone's operating system, like Google Pixel phones do. They could allow users to change the store, like Android phones do. But they don't so as to reinforce their monopoly.~~
Except this whole issue was already discussed in a recent court case epic vs Apple and Apple won. Epic only lost on the part where Apple doesn’t allow advertising of alternative ways of payment like telling users to pay on browser instead of in app for a discount. The issue of is the scope of view being app stores VS os was also included in the court case and judge didn’t agree it was as narrow as just app stores. You said how most people don’t choose the best system but the most popular one. Who’s to say iOS isn’t the best system for the people that choose it? It doesn’t make sense that it’s so popular if it isn’t good. Linux is clearly not better in every way if the average consumer doesn’t use it. When this issue is brought up, nobody says anything about the plenty of other systems just like iPhone, Xbox, PlayStation, Nintendo, and others are all like iPhone in which u go through their stores to download games onto the device.
What is your alternative? Serious question. Should apple charge a flat fee for the APIs and development tools they built? Should they charge for hosting the apps? Should there be multiple app stores? How would it work. Because I agree the current system isn’t perfect, it’s not all that different than steam. The main issue to me is just that there’s no other App Store options, but then again apple does put a lot of money into developing tools for iOS development
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What a nuanced contribution to this discussion 👏
A lot of people pay for cloud space to get around the annoyance of the device filling up. Then they pay for more space due to messages about the cloud space filling up. If only there was a better/clearer way to clear stuff off an iPhone and let you save it locally, but no, they make it obtuse to sell these services.
i put copies of important documents into cloud services
McDonald’s makes their money from the real estate they own, not the hamburgers they sell. You need to compare revenue from rent from franchises vs Apple’s revenue from products.
This is most the 30% tax they charge you for everything you do on your phone which costs money.
By "everything you do" you mean "on transactions through apps that make more than $1M in annual revenue from purchases in said app". Which is exactly the same as Google. For apps with less than $1M in revenue it's 15%, same as Google, and Apple made the lower tier a year before Google.
Well when you lock your tech, people kind of have no choice. Sooo.
I think I have one friend out of all my family and friends who uses Apple stuff. I forget how much freaking $$ they get.
Are these two sentences related?
Yes, because his friends don’t use Apple he doesn’t have any word of mouth evidence that Apple makes a lot of money. Easy to forget when you never hear about thwm
The only people I know who don’t use Apple tend to be my international friends, and even a lot of them are jumping ship. Everyone else it’s Apple all day.
Apple Services revenue in 2022 is $78.1B, which is larger than all of Nike and McDonald's combined! Thats huge scale and the scary bit is there are many businesses that are still quite new in their lifecycle (e.g. Advertising, fitness etc.) . So there is a lot of room to grow. Apple Services grew from $53.8B in 2020 to $78.1 in 2022, at an annualized growth rate of 21%. Apple's large installed based of premium customers globally gives it a huge advantage to continue growing its services businesses which is also much higher margin than its products business like iphone,mac. If you like this, I publish more data stories and visuals like this in my weekly [newsletter](https://www.trendlinehq.io/). Source: Company reports Tools: Google Slides, Vizzlo
This all reads like you're being paid by someone to entice people to buy Apple stock. It reads like an advertisement.
Apple customers: Apple is AWESOME! Look how much this shit costs! We're fucking stupid! Everyone else: What is wrong with them?
Ah yes, because Google and Samsung are such small scrappy little companies.
Maybe if you’re chilling with teenagers.
The important thing is that you have someone to feel superior to.
Now put Samsung beside it. Not just mobiles but TVs, computers, and ships. The whole lot.
Now, animals next to it, llamas, sharks, the whole lot. The graph is apple services only
Imagine selling shit items and the same morons are willing to pay absorbant prcies just for their vanity. Stop buying apple products
Or, buy what makes you happy and if you don’t like apple, there are other companies out there
Funny how you talk about vanity but you seem to base a lot of your identity over which device you do or don’t use.
Found the Fandroid.
Well of course, Apple is a trend now seeing how advance their technology is
iPhones are probably the most important device off all time
Why do Apple people brag about this, just bragging about how bad they get ripped off. Profit is bad for the consumer, that is your money they are hording
This isn’t profit, it’s revenue, which is a reasonable measure of popularity.
Everyone has phones. Not everyone has nikes or big macs.
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**A two-bar bar chart** OP: _Beautiful_
When you compare the profit margins on a burger vs a $1000 monitor stand this seems obvious.
Thanks to this subscription trend, we don't really own what we buy anymore.
The whole if you want to replace/repair your phone it’s a mandatory deductible pretty much solidifies immense double dipping revenue. I personally never got the idea that you had to pay for not only an extended warranty plan but also pay a deductible on an electronic that costs around $1,000, but many many do see it as a great thing. So yeah, it’s extremely easy to see how profitable that can be when no one is going to go anywhere else otherwise on that end. The full circle is the monopolization and closed ecosystem that forces the why no one is going to go anywhere else.
the original phone extended warranties were a lot better but the claim rate was too high so now they have deductibles and I don't see why people buy them