However, we have to understand that iTunes now is a blend of many business models. Some, like music, use a wholesale revenue recognition method and have very low to zero margins, others, like eBooks and Apps, are sold using an “agency” revenue model with potentially higher margins and some, like Software, are recognized at full value with very high margins.
When re-stated this way, iTunes becomes much more than a “break-even” business. My own estimate for its gross margin as currently reported is between 15% and 17% but it could be even higher.
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