Margin Call

https://asymco.com/2026/02/01/margin-call-3/

116•zdw•1h ago

Comments

marcusestes•1h ago

That's too much margin. They're trading net profits for user happiness and it's hurting their brand more than they understand. The app store cartel must fall.

aucisson_masque•1h ago

The competition is limited to android and Google is sabotaging every advantage they held against Apple. Customization is lost, freedom is lost, even the smartphones prices are now similar to iPhones. Pixels sell for premium price nowadays.

irl_zebra•1h ago

imo the app store thing is very niche and only affects a small, vocal group that tends to sit on hacker news and pay attention to these things. Can almost guarantee that 95% of the iphone-having population does not know/care about the app store "issue." I do think the general decline in quality and uptick in bugs will bite them slowly, at least once there's an iphone competitor of note.

marcusestes•1h ago

It affects everyone, because the aggressive revenue cut prevents entire categories of apps and services from being published to the app store. An app store with a 5-10% cut would be an app store with a much richer choice of apps.

ericmay•1h ago

What are some examples of the categories of apps and services that aren't publishable on the App Store due to Apple's services revenue?

> An app store with a 5-10% cut would be an app store with a much richer choice of apps.

Why? And how are you defining "rich". Rich in quality? Quantity? Something else?

cyberax•56m ago

> What are some examples of the categories of apps and services that aren't publishable on the App Store due to Apple's services revenue?

For example, Apple refuses to allow Peertube app onto the App Store. Peertube is a free version of Youtube with peer-to-peer file transfer acceleration.

That's because you can use it to (bring out smelling salts!) watch porn. If you connect it to a private Peertube instance.

Another example, Apple is not allowing an eBook reader app (FBReader) with full OPDS support. Because you can use OPDS to buy books in third-party stores. I'm using OPDS to get books from my own Calibre Web library, btw.

These are just the ones I can list off the top of my head. No doubt there are others.

techpression•37m ago

I don’t think it’s that simple, they allow Reddit, which Is filled to the brim with porn, and other ver ”non Apple” things. They also allow plenty of comic book readers that open files from almost every possibly conceivable source. Not to mention a lot of video players that can play porn of course.

Is it inconsistent and frustrating, very much so, and certain apps get an unfair treatment for sure, but I don’t think it’s as simple as that ”if app can do x then it’s banned”.

cyberax•20m ago

> I don’t think it’s that simple, they allow Reddit

What part of "monopolistic collusion behaivor" you do not understand? Apple likely has backroom deals with large players, while locking out smaller competitors.

After all, Grok app is still in the App Store.

> Is it inconsistent and frustrating, very much so, and certain apps get an unfair treatment for sure, but I don’t think it’s as simple as that ”if app can do x then it’s banned”.

I gave the names of actual apps, feel free to talk with their developers. Peertube got in only after removing the ability to add custom endpoints.

candiddevmike•1h ago

Most folks don't realize they're paying (up to) an extra 30% to Apple on everything they purchase in the app store. On top of an already exorbitant device price.

I'm sure you'd see more outrage if you had the app price listed without the fee, and then showed the fee below it/at time of purchase. It's another hidden fee.

no_wizard•53m ago

They aren't because companies refuse to price discriminate. There are some exceptions, like Spotify where they called it out in a public space that the in app subscriptions were more than if you bought directly.

However, I have noticed that its very rare. In every other case I've looked into, from Omni apps to streaming apps like Netflix, I'm paying the same either way, and often with a more convienent way of managing the subscription.

Thereby, I think it goes undetected by most, because price comparing the app store to the non app store price will yield the same price most of the time. Though importantly, I have noticed, it is not always the same options. For example, regarding Netflix, I am paying the same price for my sub via Apple but new and returning customers can no longer pay for it this way, they must go to the website now. I also can't add additional members (effectively discounted second subs) either.

This has to do with the fact Apple did captiulate to allowing companies link to their own subscription pages and actually allow customers to be directed in that way with clearer and transparent language. However, I have noticed most apps with the exception of large streaming platforms have done away completely with in app subscriptions, and the prices are still the same whether its the web or via in app purchases on Apple's platform.

However, Google Play is no better in this regard. Even though they allow 3rd party payment processing as an alternative to using Google's payment processing, it has not lead to apps being cheaper on their platform, in the majority of cases. Which makes me wonder if the value is still there for a 1st party payment processor, or something else.

dyauspitr•1h ago

I don’t even know what the “issue” is. I’m guessing it’s the 30% they take because it’s definitely not the quality and range of apps they offer.

SoftTalker•1h ago

I haven't ever purchased a single thing in the App Store or in-app so I guess I don't care. But it does seem like a monopoly and something that should be forced to allow competition.

esseph•1h ago

> at least once there's an iphone competitor of note.

What does this even mean? Do you mean in the US or globally?

By units sold, by platform, globally:

Android ~885 Million ~71%

iOS (iPhone) ~247 Million ~20%

HarmonyOS & Others ~118 Million ~9%

amelius•1h ago

That's what you get with shareholders ...

PunchyHamster•1h ago

It's a bit of Valve situation, the competition just refuses to make better product

benoau•1h ago

No. The "competition" is artificially limited to buying an Android phone, and mobility between platforms can be very complicated, not by accident, while apps like Patreon can simply be forced to comply with massive fees even if it makes their service much more expensive.

Stripe, PayPal and a bag full of other payment options would be able to compete just fine with IAP and its fees.

crazygringo•1h ago

What evidence is there that it's hurting their brand?

Outside of HN I see zero complaints. And the situation has been going on for a while. I might not like it, but it seems perfectly fine for their brand as far as I can tell.

latexr•55m ago

I see a lot of complaints outside of HN. For starters, not every nerd, and not even every Apple nerd, is on HN. Outside of that, even my non-tech-savvy acquaintances have been complaining as of late.

Is it enough of a damaged brand to hurt their profits as of now? Clearly not. But cracks are forming. Apple’s brand isn’t damaged when they’re seen as bad, but when they’re seen as the same as everyone else.

raincole•1h ago

> hurting their brand more than they understand

Among perhaps the 1% super tech savvy users. I never heard anyone who wants to sideload apps outside online (not even from other programmers I know in real life. Ones who care like much always have been using rooted android from day 1.)

PlatoIsADisease•40m ago

Brand name? Apple is a faux-Veblean good targeting lower middle class people, moms, and teens (Who pretend the $50/mo payments are expensive).

Its a demonstration of wealth.

no_wizard•15m ago

I don't think the sell through of Android phones to the wealthiest has been all that high. Celebs, top business execs, even heads of nations state are most often seen with Apple devices in their hands.

I'm sure not in every case, but even as far back as 2018 the trend line of wealth and iPhone ownership was high. Even today most app store developers admit that iPhone users tend to have more disposable income by a good margin.

Really, when I do a cursory google search of wealthy public figures that include them holding their devices, what I can find is they're clearly holding iPhones most of the time.

arealaccount•26m ago

IMHO as a user I prefer purchasing via app store because it avoids all of the dark patterns companies use to prevent subscriptions or returns.

I get that it sucks that the honest folks have to pay a 30% fees

I'd be happy to pay a 30% premium on my app store purchases just for the ability to unsubscribe without dark patterns.

caminante•1h ago

You're editorializing the headline, aside from your vague phrasing for "margin" (actually gross margin) and "Services [segment]" which has had gross margins >66% since FY20.

Better to reflect the actual headline and then add a comment.

edit:

This is the SaaS division. Similar at GOOG, MSFT, CRM, etc. have similar gross margins.

BoredPositron•1h ago

I don't understand what you want to say with your comment.

bilbo0s•57m ago

Meh.

On one level, it's fair.

If everyone has similar services margins, then it's, at one level, disingenuous to single out Apple.

At the same time, I have to say that, to my mind, the comment is whatabout-ism. Right now we're talking about Apple.

Maybe we can broaden the discussion? I'm fine with that. But we'd still be talking about Apple as part of that discussion.

benoau•1h ago

Not a huge surprise, there's an iCloud antitrust alleging a 78% gross profit margin:

https://storage.courtlistener.com/recap/gov.uscourts.cand.42...

The Epic legal case ruling cites a 75% profit margin on App Store fees:

https://storage.courtlistener.com/recap/gov.uscourts.cand.36...

And of course, their 36% share of Google Ad revenue revealed in Google's antitrust has to be approximately 100% profit:

https://www.cnbc.com/2023/11/14/google-pays-apple-36percent-...

jbverschoor•1h ago

Epic should take a look in the mirror first

benoau•1h ago

They'd see a 200x smaller villain that didn't cause 1/2 the world to rewrite competition laws and has only been fined $100s of millions for deceiving consumers, not billions.

zaptrem•1h ago

What did Epic do?

echelon•58m ago

There are 1,000 ways to get games.

There are over two dozen gaming consoles.

Steam, GoG, Epic, Nintendo, Sony, Microsoft, retro games, in-store games, used games, rental games, you name it.

Literally a billion ways to game. And games are just TOYS. One of many hundreds of totally optional dopamine sinks.

Apple is one of two gatekeepers of the most essential device of modern humanity. They tax it, tightly control everything that happens on it, and edge out every business on it.

This needs to END. The DOJ/FTC/EU/etc. need to strip this from Apple and Google permanently. It's had vast deleterious effects on all innovation and business in the world.

You can't park in my city without a smartphone now.

You can't order food without a smartphone.

You can't bank.

You can't prove your identity on a loan.

Yet these two companies won't let you run your own software on a device you bought and own. They won't let any other businesses have any economic activity that isn't taxed. They force their search, their payment rails, and their customer relations and tracking hooks into everything.

Apple and Google are mega-monopolies and need to be rended apart. Not vertically, but horizontally: the DOJ should split Google into "Google A / Google B / Google C / Google D ..." and force them to compete with each other on all the same platform pieces. Just like they did with Ma Bell back in the day. And slap Apple around until they open up their platform and stop being the defaults for everything.

Call your legislators and demand hyperscaler monopoly breakup.

These companies own mobile internet. These companies own search and the web. They tax trademarks. They don't let you do what you want to do with tech you own. They're removing adblock and making it impossible to repair your stuff. They're shitting up the entire internet.

Epic is a puppy by comparison. They've done some lame things, but it pales in comparison.

xphos•47m ago

The reality is that if you are a dominator in the OS market you shouldn't also be allowed to simultaneously pick winners and losers. You are effectively a utility operator and should be regulated like one. They can still do there vertical scaling app business but its fundamentally anti competitive when you collude both.

no_wizard•20m ago

Epic is hardly a puppy. Scale isn't the only determining factor in how to view these actions by companies.

Ironically, the tech industry at large went after Lina Khan even though she was instrumental in moving forward with taking on tech industry monopolies[0] even though they themselves have complained about the App Store for years[1] because monopoly enforcement also included shutting down anticompetitive mergers like the Figma buyout.

Selective enforcement is how we got here in the first place.

This is why the tech industry writ large did a 180 on Trump and helped to get him elected. Apparently monopolies are good if it means payouts for investors. Despite the fact they'd stand to make more in a highly competitive marketplace, not less, as has been shown throughout history

[0]: https://www.businessinsider.com/real-reason-silicon-valley-h...

[1]: https://techcrunch.com/2025/08/22/y-combinator-says-apples-a...

gigatexal•1h ago

Yea. I saw that too. One day all the hardware will be loss leaders for services revenues.

kergonath•1h ago

That would be a shame, because that’d put Apple’s interests completely at odds with mine. Using Linux would not be too much of a hurdle, but there aren’t really any better phones or tablets. I am not going to jump from the Apple pan into the Google fire.

gigatexal•42m ago

Oh don’t get me wrong: I love the Apple hardware. It’s by far some of the best on the market. The attention to detail and workmanship is why I buy them. I just don’t know how they will avoid the push to move everything into services and only see hardware as a means to an end that end being more services revenue. They’ll become IBM then :(

1123581321•57m ago

Their hardware margin supposedly averages 40%. A 40+% price drop across the board would be a good outcome for a lot of their customers.

behnamoh•1h ago

I wonder how AI can disrupt this nasty business by teaching users how they can self-host much of those services and save $$$. Let's face it: for the normies out there, the idea of having "your own iCloud" is still daunting (albeit very much possible).

Can AI level the playing field between users and greedy firms like Apple?

brianwawok•1h ago

Nah. They won’t even know it’s a problem to solve.

latexr•50m ago

Most users won’t ever use any AI outside of the big players, and those couldn’t give a flying fuck about user empowerment. They’ll just advertise at you and recommend whatever is popular. It’s unrealistic to believe AI will bring any kind of democratisation or software service independence to regular users.

doug_durham•44m ago

Most people don't have the time to "self host". I could easily self host, but I don't because it's not worth my time.

troupo•1h ago

Upton Sinclair coined the oft-cited maxim “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” I propose a corollary: It is difficult to get a company to see that certain of its core competencies[1] are in severe decline[2] when the company is making more money than ever.

https://daringfireball.net/linked/2026/01/30/apple-reports-r...

[1] https://daringfireball.net/2026/01/resizing_windows_macos_26

[2] https://daringfireball.net/2025/03/something_is_rotten_in_th...

cyberax•54m ago

I joked several years ago, that when a software company loses its way, it does UI refresh that makes everything bigger and removes features.

mrtksn•59m ago

This screams huge potential for dividing the internet into localities due to new geopolitical situation.

Europe accounts for over %26 of the revenue, for $30B thats close to ~$8B for the last 3 months.

The thing about hegemons is that they are able to enforce things like breaking the network effect or demolishing the walls of walled gardens. If things get bad enough, EU can give Apple a choice: leave EU market and loose all your EU revenue which is %26 of all revenue or as big as %65 of the US revenue OR unlock your devices %100 to be usable with 3rd party services. Put in numbers, definitely loose $38B per quarter or possibly loose $8B per quarter.

I bet with %76.5 margin which translates to potential $2B profit per month and employment for thousands of high paying jobs, this will create enough greed to push for 3rd party local services investment. Anti-Americanism, national security concerns, pricing and better services(Apple's some services can be better) or even maybe bad due to war/political meddling can push Apple's services revenue to 3rd parties. Also, there's quite a bit unemployed American talent out there so with EU's push they can move to EU and eat Apple's service revenue.

That's a bit on the fantasy realm but considering that so many unthinkable things are happening these days, maybe US will threaten France and bring a carrier strike group to Normandy shores and US services revenues from EU will go to zero? There's definitely will among the people for that, just the politicians need some push.

runako•54m ago

I think comments focusing on the App Store are way off base.

Unless my household is a wild outlier, I would expect the vast majority of services revenue to be Apple One and similar. You need more cloud storage to backup your photos, you get Music and TV with it. Even many folks who don't do Apple One will end up paying for some amount of iCloud storage.

Yes, renting cloud storage at scale to consumers can be very profitable. BackBlaze is not as scaled, and doesn't have the platform tie, and achieves a 60% gross margin.

raincole•53m ago

Why do people even calculate or care the gross margin percentage outside of manufacturing and retailing?

I genuinely fail to see why and how it's a number with any meaning. For example, a plumber fixed your house's pipe. He charged mostly for his time instead of the tools and materials he used (righteously). If you count his 'gross margin percentage' it might be higher than Apple. Does it mean anything?

airstrike•51m ago

It doesn't mean anything because you're comparing the plumber with Apple, but if you compare plumbers to each other, or possibly even a plumber to an electrician, it could be useful.

Galanwe•46m ago

The plumber hourly wage is to be deducted from his margin. Just as Apple's costs for running the payment system and platform are deducted.

> I genuinely don't know why and how it's a number with any meaning.

It has meaning in the context of Apple arguing that their fees are that high because they have to maintain said infrastructure.

Which leads to the question "how come there is no competition to lower such high margins?", which in turns questions whether any competition in unfairly blocked by Apple.

In a totally frictionless market, profit margins are usually low. Very high margins are often a sign of a closed market where _somehow_ competition cannot emerge.

zmmmmm•47m ago

Somehow Apple maintains this perception that they make money on the hardware and therefore are trustworthy because they don't have any interests hostile to their users.

But when you look at what's really happening it's clear - they have a highly hostile interest to their users - they want to lock them into the ecosystem and then rent seek like crazy on services that their users have almost no choice but to buy.

This is why I love Apple products but I only buy the open ones that leave me choice to do what I want - which pretty much means I'm only buying Macbooks these days.

PlatoIsADisease•41m ago

Walled Garden is marketing speak. Walled Prison is the reality.

Its always been like this, but I don't think their target demographic cares. I remember 10 years ago I heard something like: "Iphone, the phone your mom uses." Not that its accurate. Blows my mind VIPs use iphones after Pegasus.. How could these people be so unaware?

msy•28m ago

iPhones, particularly with the advanced security/hardening turned on are light years in front of Android devices for protection against advanced/sophisticated actors. Which is why VIPs use iPhones.

Apple responded to Pegasus with Lockdown Mode, which is probably the most hardcore security modality that's ever shipped in mass produced consumer hardware.

didip•42m ago

As a shareholder, this is super fantastic.

marstall•29m ago

yet tim cook still feels the need to attend the melania premiere

zer00eyz•26m ago

For some context:

Nvidia: GAAP and non-GAAP gross margins are expected to be 74.8% and 75.0%,

Micron: MU (Micron Technology) Gross Margin % as of today (January 28, 2026) is 56.04%