Aswath Damodaran, professor of finance at the Stern School of Business at New York University, is widely regarded as the world’s leading expert on corporate financial data. He keeps a regularly updated database tracking all kinds of values, including industry specific margins. His data tells us that Apple’s 30% App Store margin is tiny in comparison to the massive profitability of the large software companies that don’t want to pay their share. In fact, the margin on Software (System and Application) sits at 72.38%.
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That latter figure is astonishingly high and indicates how much of your tax dollars are subsidizing software companies. (How much does your local or national government pay in software licensing costs at roughly 70% margins?) It certainly helps Microsoft maintain its own 43.79% margin across its business — and presumably means larger software firms have been able to lavishly lobby governments and regulators to force the App Store to open up.
The only sectors higher than software are retail REITS (shopping centers, office rentals, etc) at 77.48% and Big Pharma (70.3%), closely followed by financial services (ie. the people who gave us the financial crisis) at 68.37%. Even now, tobacco is also a high-margin industry at 61.96%.
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