[personZ]

"The 30% IAP cut equals billions of dollars in yearly revenue. But being in this commission business is not in Apple’s DNA."

I would say it is entirely in Apple's DNA. Apple has aggressively tried to inject themselves between sellers and buyers in multiple markets, even where their value add is unwanted and unnecessary.

And I don't fault them at all for that. They're a business and they're doing what businesses do, growing revenue. Trying to get a pound of flesh from the payment industry process is something many players are aggressively trying to do right now, and Apple is no exception.

And of course in the end all fees end up being borne by consumers.

One fallacy that many make in such discussions is the argument that Apple makes so much from hardware they really don't care about the smaller parts of their business, yet they have shown that they care very much about it. Don't think of Apple (or Google, or Microsoft, or any other growth company) as a $N billion dollar company -- every day they are, to the people fighting for more market, a $0 company, because all that matters to the tiers and people involved is $(M-N) tomorrow.

[markonen]

One reason why I suspect Apple could be different in this regard is the fact that they famously have only a single P&L. So whereas in other companies divisions and the SVPs running them would jealously guard every piece of revenue that was rightfully theirs, Apple as an organization could be better equipped to avoid that — if deemed beneficial to the overall business.

[ThomPete]

The 30% as far as I understand is roughly covering the cost of running the app store. I.e. huge revenue but not really much profit.

[personZ]

I would be really surprised by that. The gross 30%, presuming it always applied, would be about $6 billion per year, which would be an enormously expensive online store. Of course Apple's cut is often lower than 30% -- I can frequently buy $100 iTunes cards at Costco for $80, for instance, and then add that the retailer surely gets a cut as well.

Nonetheless, the iTunes empire is currently doing almost $20B of business a year, with a $6B cut. The NFL, in contrast -- for all its seeming enormity and influence -- is about a $8B business, gross.

[amatheus]

The app store has free apps too, it could be said the paid apps are subsidizing the free ones.

[chrischen]

Subsidizing the bandwidth costs? Because the free app developers surely don't see any of that 30% cut app charges other apps.

[ThomPete]

The apps needs to be approved. The majority of cost from running the app store is the people who work there.

[ThomPete]

I was talking about the app store. Sorry if that was unclear.

[higherpurpose]

"According to Apple".

I don't think we've had anyone actually analyze that yet. It's only Apple that's been telling us that they barely cover the running costs. Also that was years ago. I imagine at least some profit grows faster than the costs with more apps in the App Store, more streamlined review policies, and increased profit/app from IAP business models.