Apple

In two thousand and eight, Apple released the iPhone. The hardware cost three hundred dollars to manufacture and sold for six hundred. Hardware margins were thirty-six percent. But Steve Jobs saw the real business was not the phone itself. The phone was the entry point into an ecosystem where customers would spend thousands over five years. Developers built apps on the iPhone. Apple charged thirty percent commission on every app sale and in-app purchase. A developer selling an app for ten dollars paid Apple three dollars. A user spending twenty dollars on purchases paid Apple six dollars. Billions of transactions times thirty percent took billions to Apple yearly. Services revenue was hidden.