Internal Documents Reveal Apple’s App Store Had a 79% Profit Margin in 2019

iPhone App Store

Despite heavy criticism, Apple has defended the 30% App Store fees saying it helps keep the store running. The reality, however, seems to be that the App Store has become a major cash cow for Apple.

Documents submitted by Epic Games in the court in its ongoing case against Apple indicate that the App Store had a staggering 78% profit margin in 2019. The number is based on the internal documents reviewed by Epic Games.

The profit percentage likely does not include all expenses that Apple incurs related to running the App Store like R&D. Due to this, the 79% profit margin claim by Epic Games is possibly incorrect. Even then though, the numbers indicate that the App Store has become a major cash cow for Apple which is why it defends the 30% fees it charges for IAPs and subscriptions so strongly.

Apple has never revealed how much profit the App Store generates for it. The company has also been trying to avoid disclosing the App Store financials in its trial against Epic Games. A pre-trial testimony revealed that the App Store generated over $1 billion in profit for Apple in 2011.

In November last year, Apple did announce that it will take 15% in commission from developers with less than $1 million in revenue. The move came amidst Apple being criticized by major app developers for its 30% App Store fee and the company being subjected to many investigations from regulatory bodies across the world.

The Apple vs. Epic Games trial has already revealed quite a few interesting tidbits about Apple, like the fact that it considered bringing iMessage to Android back in 2013, but its executives rejected the idea. As the trial progresses, more such information is likely to come to light.

[Via The Information]