How many times do we have to make the argument that Apple doesn't run the app store to make a profit?
Please look at any Apple quarterly statement. There you'll see that the margins of the app store are in the low single digit percent range, whereas hardware has over 30% or even 40% margins.
That's what Apple is doing both with iTunes and the app store. Which doesn't mean this will always be the model - the rumored Apple TV could be different, there Apple could make most of its money selling services, while selling the hardware at cost. Maybe. Who knows. But the app store, and iTunes are merely feeder operations supporting hardware sales.
Please look at any Apple quarterly statement. There you'll see that the margins of the app store are in the low single digit percent range, whereas hardware has over 30% or even 40% margins.
That's what Apple is doing both with iTunes and the app store. Which doesn't mean this will always be the model - the rumored Apple TV could be different, there Apple could make most of its money selling services, while selling the hardware at cost. Maybe. Who knows. But the app store, and iTunes are merely feeder operations supporting hardware sales.