I don't really think it's about the number. I try not to think about these kinds of things in terms of what different companies "deserve." Apple can get away with demanding a 30% cut on their platform and they do so without much arm twisting. Nobody has to support macOS or iOS, and both developers and customers can completely ignore their existence. They'll be missing out on a lucrative customer base but that's true of realestate in high-traffic areas as well.
Apple being able to pull off such huge margins in markets where they have competition on every front I think paints a picture of just how ahead they are. The fact that the gap is so big and nobody has been able to step up and close it is mind-boggling to me. You can only blame so much on slick marketing because for 64% gross margins I think other companies would be happy to put up the marketing cash.
Is Nike so far ahead of every other shoe manufacturer? What's the margin on a pair of Nikes? How many young kids waste family money on a brand who makes the shoes for a fraction in Southeast Asia. How about Christian Louboutain?
There's also the sunk cost for many people. If you've bought tons of content in the App Store, you'd have to rebuy everything if you switched to another ecosystem. For the same reason, if you own proprietary camera lens for Camera Body A, you are not likely to dump all your photo equipment even if a Camera Body B comes out that is cheaper and better.
Path dependency. We learned this lesson once with the Wintel duopoly. Then with the Web, from about 1994 to 2007, we had broke the shackles. And now, people are happy to enslave themselves again, and vigorously defend their servitude.
Apple makes great hardware and software. They don't need this.
>> Is Nike so far ahead of every other shoe manufacturer?
From personal experience, yes. Easily. It's like comparing a Wal-Mart 'First Act' electric guitar to a Fender Stratocaster, or one of those awful Crosley turntables to a pair of Technics SL-1200s.
I have particularly sensitive feet, and ride a push scooter everywhere so cheap soles will wear quickly. I'll go through 4 pairs of $30 knockoff shoes a year instead of buying a pair of Nikes for $100 and enjoying them for three or more years. I live in Toronto and make my pilgramage to the actual Nike retail outlet in the Eaton's centre once a year to see what's new, try things on, and buy just one pair of shoes between $100-200. As a result, my closet is full of stylish, comfortable shoes that have lasted years and years. :)
YMMV, but honestly the same goes for Apple for me. I'm still using a G5 tower from 2005 with 16GB RAM and 2x1TB SSD's on the daily. I paid a couple grand for that back in the day (with about 4GB RAM originally and a 120GB HDD, I believe)...I don't have a single PC tower or laptop left except a hackintoshed Lenovo that's only a couple years old, despite buying a bunch.
Nike is not 'so far ahead' of every other shoe manufacturer, but, similar to Apple, they are only comparable in any way to similarly-priced manufacturers of their tier - Adidas, Reebok, or Microsoft Surface, Alienware.
The Surface is probably the only portable I've had the pleasure to use that is comparable to the build quality and feel of Apple's manufacturing.
Gucci, for example; is a company that represents true excess for the sake of excess. (What's that Lil' Pump line? 'Spent 10k on my Gucci bed sheets'?)
As an iOS dev for a living, I think the 30% is bullshit. But from what I've read/heard, it's based off something similar to retail margins.
Retailers have physical real estate that is a limited resource. They have to have logistics and shelf stocking. The marginal cost is that is non-trivial compared to maintaining a large database of apps which is almost but not quite zero.
The retail analogy is bogus. Software isn't a physical product these days.
A purse is a purse, do you think some purses are so ahead of the curve that people pay thousands of dollars for one, or do you think they are buying a brand name despite the cost?
Like I get what you’re saying but there’s also lots of luxury designer brands. The competition in that space isn’t about the margin on individual items. Like the market thousand high-end bags, shoes, or even art is a whole other world. Like do you think a Rembrandt is overpriced because paint is only a few cents?
But that’s so different from the smartphone space. Like iPhones were really a status symbol like a decade ago but you can get one now at like every price point and flagship androids aren’t much cheaper. You have threads full of people on HN arguing that Apple is actually the budget pick if you can afford to frontload the cost. I’m typing this on a used iPhone X that cost less than $400.
Like have we all forgotten when Apple released FaceID and then Samsung responded with the lamest front camera picture match thing?
Like yes lock-in is a thing, lifestyle marketing is a thing, brand loyalty is a thing, and momentum is a thing, but that doesn’t explain how Apple is seemingly able to do it so much better than everyone else. Because we could name companies that have all of those but still aren’t Apple.
Apple being able to pull off such huge margins in markets where they have competition on every front I think paints a picture of just how ahead they are. The fact that the gap is so big and nobody has been able to step up and close it is mind-boggling to me. You can only blame so much on slick marketing because for 64% gross margins I think other companies would be happy to put up the marketing cash.