Apple is a hardware company with proprietary CPUs and such. They have such a moat that if they open sourced their entire OS stack today nobody would be able to do anything with it except by buying their hardware.

But the issue with the app stores is the app fees. Those must be lucrative enough to want to keep that gate for themselves.

Services are super high margin (twice that of hardware), growing quickly year over year, and now make up a big fraction of Apple's overall revenue. Sadly, I think, the days of Apple having the incentives and motivations associated with being primarily a hardware company are well past us—we're at the stage where hardware and OS product decisions reflect a need to drive services revenue, rather than simply making something great that people want to buy.

Services are the second largest revenue steam for Apple, after the iPhone. All other hardware they make is way further down. There's a relevant discussion at [0].

[0] https://news.ycombinator.com/item?id=45764986

They have such a moat that if they open sourced their entire OS stack today nobody would be able to do anything with it except by buying their hardware.

That doesn't make much sense, XNU and the layers above it are very portable, they went PowerPC -> x86 -> x86_64 -> ARM64 after all. They also supported multiple different GPUs in the Intel era.

If the entire OS stack was open sourced today, we would have forks running on standard Intel/AMD CPUs in a week. They wouldn't have the same optimized power management, etc. But I think it would have a good chance of wiping out desktop Linux within a brief period.

macOS/iOS are part of the moat.

Their services revenue this quarter was their second largest business segment (iPhone #1), but experienced more growth than any other segment (~15% iirc, iPhone was more like 6%). Many onlookers see "Services" and think "Oh wow Apple TV and Apple Music must be doing really well", and that's exactly what Apple wants you to think. In reality, these services are doing good, but my understanding is: that category is utterly dominated by tolls. Their toll-taker position in controlling App Store sales, the fees they charge on Apple Pay transactions, and their revenue from their part in the Apple Card system.

Their genuine services, other than maybe iCloud storage, are small businesses. Consider this: Apple reports $28.7B in quarterly services revenue. Spotify reported $3.8B in quarterly revenue directly from their 281M premium subscribers ($4.3B total) (AM has no free tier). Spotify is, in all likelihood, quite far ahead of AM in subscriber counts; estimates put AM at ~100M. AM also gives away a ton of subscriptions likely at a bulk discount (its included with some Chase credit cards, Verizon Wireless plans, etc); it would surprise me if total AM revenue is higher than $1.5B/q.

This is very true, and this is why we need freedom for our phones. Sadly, the best way of running free software on a modern and feature-complete phone at the moment is to buy a Pixel and flash Graphene.

According to the first Google result they had a revenue of 10 billion dollars in app store fees in 2024.