An knowledgeable witness from Epic Games testified that Apple’s App Store had an working profit margin of over 70% in fiscal 12 months 2018 and 2019. The new court documents show. Ned Barnes testified that info from Apple’s company monetary planning and evaluation group confirmed that the App Store’s working profit margin was 77.8% in 2019 and 74.9% in 2018.
He confirmed that these figures are near Barnes’ calculations of the App Store’s profit, and “also refutes the criticism of some Apple’s expert witnesses on my report that the App Store’s operating profit margin cannot be calculated reliably or usefully.” Ens additionally testified that Apple has tracked its App Store income for a number of years.
Apple has strongly questioned the interpretation of the info. As Bloomberg notes, Apple’s chief compliance officer stated at a congressional listening to final month: “We don’t have a separate income statement for the App Store,” and Cook made a comparable assertion concerning the App Store and its construction.
An Apple spokesperson stated in an e mail edge Barnes’ figures on Saturday have been incorrect: “Epic experts’ calculations of the App Store’s operating margins are completely wrong, and we look forward to refuting them in court.”
The query of how a lot Apple earns from the app store is on the core of the continuing courtroom case between Apple and Epic Games. Epic argued that the App Store doesn’t present any actual companies, however solely as a method for Apple to get cash from builders.Epic sues Apple Violation of antitrust laws For these causes, within the launch of unauthorized functions Payment system Fort night Earlier this 12 months. But Apple insists that the App Store overview course of is a crucial half of the broader platform safety work that is carried out round iOS.
Court documents show Apple expert witness Richard Schmalensee (Richard Schmalensee) Also raised objections to the Barnes/Epic figures. “Mr. Schmalensee stated in written direct testimony that Barnes’ estimate of the App Store’s operating profit margin is unreliable because it looks at a segment of the iOS ecosystem in isolation, thereby artificially increasing the visibility of that segment. Operating profit margin. “From the attitude of Apple’s machine and repair ecosystem, the working profit margin has dropped to a very low stage. ”
Schmalensee additional proved that making an attempt to independently assess the profitability of the App Store is “pointless” as a result of it’s half of the iOS platform and depends on all of Apple’s mental property rights. “As Apple’s senior management will testify, Apple will not calculate profits and losses based on products and services because they think this is an unproductive approach,” Schmalense stated.
The trial proceedings will start on Monday.