iTunes now costs $1.3 billion/yr to run
asymco.com
iTunes now costs $1.3 billion/yr to run
1–10 of 63 posts
Re: iTunes now costs $1.3 billion/yr to run
#2It is quite a leap to assume it runs break even. I know Apple's people like to say it does, but numbers can be manipuated and I trust Apple is smart enough to optimize over the years to give themselves a small but healthy profit.
Re: iTunes now costs $1.3 billion/yr to run
#3So, is 30% too much of a cut when the platform offers:
- Credit card processing
- The largest marketplace with the most paying customers
- Download hosting
- Promotion
- Highly available document and key/value store infrastructure
- Keeping junk and malware out of the store, which maintains user trust.
I'd argue that, like most emotionally influence business decisions, Apple sticking with the same percentage is a good thing - witness how the markets vary when things are up in the air politically.
Keeping the same policies for a long time allows businesses to plan appropriately as they know what they're going to get, even if it's not ideal.
Re: iTunes now costs $1.3 billion/yr to run
#4Actually, what Tim Cook said at the Apple's Financial Conference last quarter was that it runs "a little ahead of break even". Therefore, it is reasonable to say it runs at break even.
Even if you are cynical and assume a certain amount of money is moved from one department to another, he can't say something on the record like that, if it isn't basically the truth (these numbers are audited and are subject to Sarbanes–Oxley. So, even assuming a small amount of shifting money around between departments and his fudge factor "a little", I think you could at most say single digits, for example: 5% if you want (or whatever small % you choose), it is still close enough for normal conversation to say its break even.
Re: iTunes now costs $1.3 billion/yr to run
#5Even if it costs 1.3 billion to run a year Apple's profit from quarter to quarter vastly dwarfs that. Sort of like how it used to cost microsoft to create their xbox platform. I think it is worth it.
Re: iTunes now costs $1.3 billion/yr to run
#6It is quite a leap to assume it runs break even. I know Apple's people like to say it does, but numbers can be manipuated and I trust Apple is smart enough to optimize over the years to give themselves a small but healthy profit.
Let's say 300 million? That would still mean that iTunes costs a billiom to run for a year.
Saying that iTunes is run a bit over break even – which Apple did during their conference calls – while making something like 300 million is very likely illegal and not something Apple would do.
Re: iTunes now costs $1.3 billion/yr to run
#7So, is 30% too much of a cut when the platform offers: - Credit card processing - The largest marketplace with the most paying customers - Download hosting - Promotion - Highly available document and key/value store infrastructure - Keeping junk and malware out of the store, which maintains user trust. I'd argue that, like most emotionally influence business decisions, Apple sticking with the same percentage is a goo…
That may be a very good deal for some... but what if it's not or the people just want an alternative? If Apple's platform is that good, then there is no reason to lock in people to use only that, devs will flock to it anyway, it can stand on it's own merits. Or Amazon or someone else may come in and offer all of the above + more at only 20% because of their efficiencies (AWS etc.). Not to mention the still ongoing forced 30% of subscriptions fiasco for which Apple does not provide hosting.
Re: iTunes now costs $1.3 billion/yr to run
#8Even if it costs 1.3 billion to run a year Apple's profit from quarter to quarter vastly dwarfs that. Sort of like how it used to cost microsoft to create their xbox platform. I think it is worth it.
As a gamer I was thinking about the exact same thing. When assessing this model do you think it matters that Microsoft has a monopoly on Xbox games, whereas Apple has a number of competitors in terms of App and Music services?
Re: iTunes now costs $1.3 billion/yr to run
#9It is quite a leap to assume it runs break even. I know Apple's people like to say it does, but numbers can be manipuated and I trust Apple is smart enough to optimize over the years to give themselves a small but healthy profit.
Let's say 300 million? That would still mean that iTunes costs a billiom to run for a year. Saying that iTunes is run a bit over break even – which Apple did during their conference calls – while making something like 300 million is very likely illegal and not something Apple would do.
Yes,Apple is a white horse when it comes to financial and legal matters, right?
Re: iTunes now costs $1.3 billion/yr to run
#10Earlier quoted context omitted.
Let's say 300 million? That would still mean that iTunes costs a billiom to run for a year. Saying that iTunes is run a bit over break even – which Apple did during their conference calls – while making something like 300 million is very likely illegal and not something Apple would do.
Yes,Apple is a white horse when it comes to financial and legal matters, right?
I don't know, I have no evidence to claim that Apple routinely lies to shareholders. That's why I don't.
I'm not particularly attached to that postion and willing to be convinced.