CUPERTINO - Apple runs its popular App Store for iOS mobile apps just above the breakeven mark, according to Apple CFO Peter Oppenheimer. Mr. Oppenheimer made the announcement during today’s Apple shareholder meeting — one of the few revelations unveiled during the event — in response to a question about the company’s iOS subscription plan for newspapers and magazines .
The question came from an Apple shareholder late in the question and answer section of the meeting from a shareholder asking the three execs on stage for the event — COO Tim Cook, Marketing VP Phil Schiller, and CFO Peter Oppenheimer — about rumors that the next iterations of the iPad and iPhone were delayed, and about the controversy over the 30% Apple was taking from iOS subscriptions.
The first question was largely dismissed, as most long-term Apple watchers would have guessed, but it did provide Tim Cook the opportunity to make a quip concerning the March 2nd iPad media event that was announced earlier in the day.
“You may want to fire up a browser,” Mr. Cook said with a laugh, “and check the news on the media event [we announced today]. That may give you some clues.”
The second question, however, yielded one of the few new pieces of Apple information from the entire meeting. Phil Schiller fielded the question about the company’s subscription plans, making the case that Apple wasn’t asking for a cut of revenues from subscribers brought to the iPad by publishers outside of their iOS apps, and that Apple only wanted a cut from new customers brought to subscriptions from in-app purchases using Apple’s iOS infrastructure.
That, in turn, lead to Tim Cook making the case that free apps are a big part of the iOS app store ecosystem, and that Apple supports those apps — many of which make developers money in indirect ways — in order to support the broader iOS platform as a whole.
At that point, Peter Oppenheimer added, “We run the App Store just a little over breakeven,” implicitly making the case that the App Store was not a big profit generator for the company.
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.