Apple wants you to know it chose not to take a cut of $400 billion in physical goods


Apple is trying to convince a judge that its not milking the App Store for all its worth, and today the company dropped some big numbers to help make its case. Apple claims that its App Store drove $400 billion worth of physical purchases in a single year in 2019, and that unlike digital purchases and subscriptions Apple doesnt take a cent of that money.

Thats according to App Store boss and longtime Apple marketing exec Phil Schiller, who also testified that the company spends a staggering $50 million a year to throw its Worldwide Developer Conference (WWDC) event. The companys also building a new developer center at its Apple Loop headquarters in Cupertino, he says, though I didnt catch how much the companys investing in that.

Why isnt Apple trying to take a cut of physical purchases? During his testimony, Schiller explained that Apple couldnt guarantee they would actually arrive.

But I also imagine it might have been a hard sell with developers: can Apple really argue that it drove those $400 billion in purchases by itself? If Im going to buy something online, Ill probably start by whipping out my phone, but Ive got a laptop with a perfectly good web browser right here to buy those same items, if an app doesnt immediately do the job.

Even without a cut of physical purchases, Apples App Store cut is estimated to rake in $64 billion for the company each year, with profit margins approaching a ludicrous 78 percent.

Schiller testified that 84 percent of all App Store apps are completely free, with roughly 75 percent of all games on the App Store completely free. Of those games, approximately 17 percent are freemium (requiring in-app purchases to unlock content) and 6 percent are paid, leaving just 2 percent on a subscription model if we do the math.





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