The testimony of an Epic Game expert witness said: App Store has created a lot of wealth for Apple, and the profit margin of the online mall is close to 80%. Before the trial of Apple and Epic Game on May 3, the details of the financial transactions and activities of the two companies had been exposed. In the latest disclosure, it seems that an expert witness from Epic believes that Apple has made a lot of money from the App Store.
The testimony of Ned Barnes, a researcher in finance and economics, stated that the App Store’s operating margins are very high and have been so for many years. According to a Bloomberg report, Barnes said that documents discovered by the expert showed that the operating profit margin of the App Store in the fiscal year 2019 was 77.8%, compared with 74.9% in 2018.
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It is said that these data points are “obtained from documents prepared by Apple ‘s corporate financial planning and analysis team and generated from documents by Apple’s CEO Tim Cook.” This percentage may not be very accurate, because Barnes said an Apple employee told him that these numbers did not show the full picture. Barnes then calculated the new estimate and believed that the profit margin for the past two years was closer to 79.6%.
Barnes also said that the documents he obtained from Apple showed estimates of profits and losses for the 2020 fiscal year. He believes that Apple has been tracking App Store profits for many years and found the 2013-2015 report. These figures are likely to be used by Epic to try to persuade the court that Apple has obtained considerable revenue from the App Store with relatively small expenditures. Epic may use this statement to justify cutting Apple’s 30% transaction fee on App Store purchases, which is also one aspect of the company’s complaint.
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