“As iPhone sales slip, Apple has been positioning its booming digital-services business as its new profit engine,” Michael Liedtke writes for The Associated Press. “But there could be a snag in that plan.”
“A brewing backlash against the rich commissions Apple earns from all purchases and subscriptions made via iPhone apps could undercut the app store, which generates about a third of the company’s services revenue,” Liedtke writes. “Late last year, Netflix rebelled against Apple’s fees, which can range from 15 percent to 30 percent. Analysts fear other companies may follow. And attorneys representing consumers in a pending Supreme Court case charge that Apple is an unfair monopolist in the market for iPhone apps. An adverse decision in that case could open a legal door that might eventually force Apple to cut its generous commissions.”
“Besides the app fees, Apple’s services division includes revenue from its Apple Music streaming service, iCloud storage, Apple Care, Apple Pay and ad commissions that Google pays to be the iPhone’s built-in search engine,” Liedtke writes. “Apple is also expected to roll out its own streaming-video service this spring, although few details are available.”
Read more in the full article here.
MacDailyNews Take: As we wrote late last month:
Apple built this ecosystem. There were astronomical costs and risk involved with creating, growing, and maintaining all of these products, services, and infrastructure. Apple deserves to charge fees that the market will support. If they charge too much, they will lose business and adjust said fees accordingly. Those who can sign up subscribers outside of the App Store, for example, like Amazon and Netflix, are not prohibited by Apple from doing so.
When Apple runs the hub, who pays? – February 27, 2019