Apple gross margin on services rises to a new record high

Apple posted its quarterly earnings last night, with generally strong performance. One standout point was the company’s ability to continue to expand its gross margin on the ever-growing services division. In fact, Apple recorded a new all-time high for gross margin on services this quarter, at 75.7%. That figure is based on costs of $6.46 billion on sales of $26.64 billion. This 75.7% figure compares to 35.9% gross margin for Apple’s hardware businesses, combining for an overall company gross margin of 47.1%. The hardware gross margin was a slight miss compared to analyst expectations; consensus ahead of earnings expected around 36.6% margin for the hardware business. The Services business includes revenues from things like iCloud, Apple Music, Apple TV+, AppleCare, and more. However, a big chunk is also derived from Apple’s cut of App Store in-app purchases, which ranges from 15-30% on digital goods purchases and subscriptions. Critics like Spotify and Epic refer to this the ‘Appl ... Read full article.