iPhone sales are falling, and Apple's app fees might be next
SAN FRANCISCO (AP) - As iPhone sales slip, Apple has been positioning its booming digital-services business as its new profit engine. But there could be a snag in that plan.
A brewing backlash against the rich commissions Apple earns from all purchases and subscriptions made via iPhone apps could undercut the app store, which generates about a third of the company's services revenue. Late last year, Netflix rebelled against Apple's fees, which can range from 15 percent to 30 percent.
Analysts fear other companies may follow. Attorneys representing consumers in a pending Supreme Court case also charge that Apple is an unfair monopolist in the market for iPhone apps. An adverse decision could open a legal door that might eventually force Apple to cut its generous commissions.
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