The costs to run the App Store are probably something like 0.1% of the fees collected on apps.
Apple collected $15 billion from the app store in 2019. I'd wager that $15 million would cover the operating costs, which I'd guess are largely the salaries of app reviewers. Even if I'm off by 2 orders of magnitude, that still leaves 90% of Apple's cut as profit.
The app store is a huge driver toward selling the hardware. If Apple were banned from charging any fee at all, they'd still run the app store. They're not dependent on the 30% cut.
EDIT: I'm not saying that, therefore the fee is wrong, or too high, or whatever. Just that the cost of operating the App Store is not a justification for their current level.
Apple claims to have "hundreds"[0] of reviewers (which was notable to me because they didn't say "thousands"). So, we know it's somewhere between 200 and 1999. Just for fun, let's say it's 1500. Again, just for fun let's calculate: 1500 reviewers x $50,000 = $75 million.
So, their (likely) largest expense is 0.5% of their total revenue. Even if I'm off by a factor of 10, the numbers are absolutely mind-blowing.
I'm not sure why total revenue would be what to compare to the costs against.
Apple is profitable precisely because they don't, as a company, have many/any "loss leaders". Each unit within the company is expected to financially contribute to its margins.
That was one of the (many) changes Jobs brought to Apple when he returned.
I'm also not sure how a reviewers salary would be $50,000. Where'd you get that number?
>I'm not sure why total revenue would be what to compare to the costs against.
Why not? I was just trying to do some back-of-the-napkin math to ballpark the profitability of the app store "for fun".
>Apple is profitable precisely because they don't...
Cool. That has nothing to do with this particular comment chain.
>Where'd you get that number?
The 50k was totally made up. Do you have a better guesstimate? Lower or higher? Keep in mind this would be the average among their global reviewer workforce, not just US.
But... it doesn't matter though, does it? Whether their reviewer costs are 0.5% or 1.0% of their revenue doesn't really move the needle. At all.
"Total revenue" is probably a bad choice of words by parent. We're looking at just the revenue from the App Store. It does not include revenue from phones, computers, wearables, or anything else. Just the sum total they collected from their 30% cut.
Developers already pay a fee for the privilege of publishing in the AppStore.
2 trillion dollar company doesn't get to tell sob stories how they're struggling to serve these apps while reporting that their services are hugely profitable and growing.
Apple collected $15 billion from the app store in 2019. I'd wager that $15 million would cover the operating costs, which I'd guess are largely the salaries of app reviewers. Even if I'm off by 2 orders of magnitude, that still leaves 90% of Apple's cut as profit.
The app store is a huge driver toward selling the hardware. If Apple were banned from charging any fee at all, they'd still run the app store. They're not dependent on the 30% cut.
EDIT: I'm not saying that, therefore the fee is wrong, or too high, or whatever. Just that the cost of operating the App Store is not a justification for their current level.