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Apple’s Price Hike Economics

Industry people like to say that Prime Video’s business model is about making movies to get people to buy more toilet paper. But what if the Apple TV+ model is, in part, about getting everyone to sign up for Apple One?

Despite its fortress balance sheet, isn’t idly investing in film and TV because Tim Cook likes attending the Oscars or Emmys.
Despite its fortress balance sheet, isn’t idly investing in film and TV because Tim Cook likes attending the Oscars or Emmys. Photo: Emma McIntyre/WireImage
Julia Alexander
November 1, 2023

During its rocket ship ascent to become the world’s largest company, with a market cap of some $2.7 trillion, Apple has segued from hardware to services provider to, most recently, an owner of services—namely Apple Music, Apple News+, Apple Fitness+, Apple Arcade, and, of course, Apple TV+. It’s a natural progression, befitting the business realities. Apple’s gross margin for its hardware division is just over 34 percent, according to third party analysis. The margin for its services business sits at 70.5 percent.