What you need to know
- Epic Games CEO Tim Sweeney has decried Apple's record-breaking earnings, claiming that "much" of the money Apple makes "isn't rightly theirs".
- He was referring to Apple's "monopoly" on App Distribution and payments, despite the fact nearly 85% of Apple's revenue comes from hardware sales and only 15% comes from services.
- He also said that people speaking out in defense of Apple were "bozos" who "deserve to live in the world they advocate for."
Epic Games CEO Tim Sweeney has decried Apple's record-breaking Q1 earnings in his latest Twitter tirade, claiming that "much of the money" Apple is making "isn't rightly theirs."
Responding to Apple's record-breaking Q1 earnings call, Sweeney took to Twitter stating:
As was immediately noted by commenters including 9to5Mac's Chance Miller, Sweeney's comments seem to be a stretch given that nearly 85% of the revenue Apple recorded in Q1 of 2022 ($104 billion of the $123.9 billion to precise) came from hardware sales of Apple's best iPhones like the iPhone 13, the iPad, Mac, wearables like Apple Watch and home devices. Only 15% comes from Apple's services range, which includes Apple's App Store and revenue from iOS App Distribution, but also includes several other notable lucrative revenue streams including iCloud storage and subscriptions, Apple Music, and likely includes a large amount of money paid by Google to Apple for the privilege of being the default search engine on iOS, a figure estimated to be between $8-$12 billion.
Sweeney's original tweet generated enough unpopular responses that he followed up by stating:
In response to Miller, Sweeney also claimed that the money attributable to "Apple's app tax" was more profit "than all but a handful of companies in history have ever made." He did not provide any further information regarding the claim.
In a 2020 interview with iMore, Apple analyst Neil Cybart noted that while the App Store is profitable "it ends up representing a small share of Apple's overall gross profit" and that based on his own estimates "the App Store's net profit margin is not as high as consensus assumes." Responding more recently to Sweeney's comments Cybart stated that Sweeney was "gaslighting" and that the App Store accounted for around 5% of Apple's revenue, and retierated that App Store gross margins "are not as high as most people assume."
Apple and Epic Games are gearing up for the second round of their legal battle as both sides look to appeal the ruling handed down by a court last year, which stated that Apple did not have a monopoly on iOS app distribution, but should no longer be allowed to stop developers from sending their customers to alternative payment methods outside of iOS.
The company continues to face further pressure around the world to open up its App Store to alternative payments, notably in the Netherlands and South Korea.
Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.
Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple.
While you're busy being an Apple apologist, you could take the time to get the numbers right. Is it 15% or 5%? And how could the Google "portion" of the services revenue be 12 billion (10%)? Also, this triffling amount that you're talking about should be roughly 18 billion dollars! A small sum indeed, lol. Real folks never see a million in their lifetime. The App store would be raking in somewhere around 60-70 BILLION dollars a year by even conservative estimates.
Hey Tiny Timmie. Once again. You can NOT have a “monopoly” on your own product. PLEASE learn what “monopoly” means. Hint: the recent court case that you lost tells you all you need to know.
Is this the same epic games that charges 70$ whole USD for a game that’s been out for years and was ported to PC? (Final fantasy 7)
Yes...Tim Sweeney, that altruistic CEO, always looking for ways to help humankind and better the planet. And of course, anyone that disagrees with him on his view of how other companies should run their businesses? Bozos? Really? Nobody else can possibly have a differing view and still be a reasonable person? I mean, sure, $5 billion for games and a gaming store that is beyond reproach isn't near as much as Apple is making, but both companies are in the same club, and it's not like Tim Sweeney doesn't want to run a trillion dollar company.
Apple should make web apps look and feel more like standard apps and be done with it. Allow notifications and reskinning of the browser UI inside the web apps and everyone will get off Apple's back.
Get the best of iMore in in your inbox, every day!
Thank you for signing up to iMore. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.