Apple's CEO Tim Cook loves to brag at conference calls with investors that the revenue and profits from its "services" business is growing leaps and bounds, far outstripping the revenue growth in its bread-and-butter iPhone department. The App Store alone is now a Fortune 100 company by itself, raking in more than, say, the whole McDonalds franchise last year.
What Tim Cook fails to mention, however, is that a huge chunk of the App Store revenues is coming via the 30% cut (15% after the first year) Apple takes from subscription service providers like Netflix or HBO. With more and more companies balking at the Apple or Google "tax," however, that revenue is under severe threat.
In fact, if Netflix goes through with the idea to circumvent the App Store, as Epic Games did with Fortnite on Android, and others follow suit, Apple may be on the hook for up to $16 billion in revenue losses in 2020, tip analysts. That's not valid only for Apple, though, as Google will then be losing $8 billion worth of revenue as well.
All in all, due to bailing subscription service providers and regulatory pressure, the App Store and Google Play may be forced to slash their average commission rates to much lower points than what we have now, losing a very lucrative, high-margin source of revenue. Where would all that money go? Hopefully, in more original Netflix series, although Apple has plans for that market, too.
Daniel, a devoted tech writer at PhoneArena since 2010, has been engrossed in mobile technology since the Windows Mobile era. His expertise spans mobile hardware, software, and carrier networks, and he's keenly interested in the future of digital health, car connectivity, and 5G. Beyond his professional pursuits, Daniel finds balance in travel, reading, and exploring new tech innovations, while contemplating the ethical and privacy implications of our digital future.
Recommended Stories
Loading Comments...
COMMENT
All comments need to comply with our
Community Guidelines
Phonearena comments rules
A discussion is a place, where people can voice their opinion, no matter if it
is positive, neutral or negative. However, when posting, one must stay true to the topic, and not just share some
random thoughts, which are not directly related to the matter.
Things that are NOT allowed:
Off-topic talk - you must stick to the subject of discussion
Offensive, hate speech - if you want to say something, say it politely
Spam/Advertisements - these posts are deleted
Multiple accounts - one person can have only one account
Impersonations and offensive nicknames - these accounts get banned
Moderation is done by humans. We try to be as objective as possible and moderate with zero bias. If you think a
post should be moderated - please, report it.
Have a question about the rules or why you have been moderated/limited/banned? Please,
contact us.
FCC OKs Cingular\'s purchase of AT&T Wireless
Things that are NOT allowed: