Comment by bigyabai
7 hours ago
Look at any recent Apple revenue breakdown. If you pretend that the iPhone doesn't exist, Apple's most profitable market segment is services. Even the iPad and Mac can't dethrone it.
According to leaked BOMs, the iPhone usually has ~40% profit margins. It's very likely that Apple Music, the App Store and iCloud all turn >90% margins, which is basically free revenue to shareholders.
Apple Music’s margins are probably not that great. It does have to pay licensing fees, but everything else? Maybe…
I'd bet it's still well over 50% margins. At Apple's scale, royalties are pennies on each dollar you make.