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This figure of more than half a trillion dollars of value transacted through iOs should give some pause. It it a very powerful figure that can be combined with the other data from apple: • More than 1.5 billion active devices • More than 1 billion iPhone users • More than 500 million paid subscriptions More than $1/day iPhone hardware revenues for apple. The half-trillion per year on services implies between $335 and $520 in spending per user (likely closer to $500) per year. This would be in addition to the approximately $365/yr in hardware spending per user (which apple books as hardware revenue). In the case of the iPhone there is yet more: the cellular network service which may average $350 per year. To simplify, the "average apple user" spends $1/day for each device, $1/day for the network and $1.4/day on items bought through the device. adding a margin of error, that's between $3.4 and $4 per day each user spends. Oh, and there are about a billion such users. The total spending enabled by iOs thus is close to $1.4 trillion/yr. That's a significant amount. It's bigger than many industries. There are only about 12 countries with higher GdP (spain is about the same.) How does apple benefit from this? Apple captures 30% of billings through its app store. My estimate for these billings were $67.9 billion in 2019 which means app store billings were 13% of the 2019 ecosystem. apple's 30% cut of Billings amounts to 3.8% for the whole ecosystem. It's hardly an oppressive number. If apple only captures 3.8% what use is this to apple? The last decade has seen apple emerge as the world's largest company in terms of market capitalization, and not doing so with a wild multiple of revenue or earnings, quite the opposite. It did this by creating the world's greatest customer base. Not in absolute scale. android and Facebook have larger customer bases with multiple billions of users. No, apple's one billion users are simply the best billion users. They are the most likely to stick with apple and they are the most likely to buy more from apple and—this is crucial—they are the most likely to buy everything else. Those other companies whose sales come from apple customers have been taking note. They know that apple customers are desirable customers and choose to target apple customers, as much as they can. Associating your company with apple makes a lot of economic sense. I will admit however that my argument that apple created a customer base is contrived. The fact is that apple creates products and services and those products are the root of its power to attract the right customers. By choosing to create the best products it coincidentally chooses to create the best customers. The power flows from product not from pricing or positioning. This is a lesson lost for many. Developers and regulators might feel apple's massive power is perhaps too much. In the last decade, the narration around apple has shifted from apple being perpetually "doomed" to it being too dominant. Although i'm sure there are some who will try to conflate the two declaring that dominance will inevitably result in doom, most critics of apple went from laughing (at it) to crying (about its practices). The argument that apple should change its practices developed to price as it does, distribute as it does or design as it does because it was too successful or is "unfair" is getting the causality wrong. Dominance won't be altered by a few points of percentage change (on a tiny fraction of ecosystem transactions). Fairness won't be altered when there are thousands of business models and many remain to be invented. Case in point is pornography which is not permitted on the app store but which exists in abundance thorough other access methods. The argument is that apple should be more generous. That it should decrease the "cut" it takes for distribution. Or that it should not enforce revenue split for the customers it exposes to others. But this is problematic on many levels. The playing field for all developers needs to be level. The customer must be respected and access to that customer should be constrained or certainly metered. Abuses must be policed and that requires leverage. These practices are inter-dependent and the effect multiplicative, not additive. apple has a monopoly on iOs and on MacOs and WatchOs and iPadOs. It does this to control the experience, security and safety of the user. It's that control which created the customer in the first place. It should naturally control access to its hard- earned customers. It does not monetize the distribution of content or apps unless the developer/ creator directly charges for the product or service. Distribution is not cost free and to offer it for free is a subsidy which would create additional market and innovation disincentives. The loyalty of apple users is evidenced by the 600 million paid subscriptions (end of year estimate) that are booked through the app store. Developers benefit directly as a result. One could argue that the abundance of services which don't distribute through the app store is evidence that the system works as intended. Apple's app store front is its property and it reflects its core values. Being on the shelf in the app store means you operate on the terms of the shelf owner. If the rules are not agreeable then the half trillion dollars of ecosystem activity is testament to the availability of alternatives.