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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Cogito who wrote (60086)	1/4/2007 2:21:30 PM
From: aaplfan	Respond to of 213182

Apple has stated repeatedly that the iTunes store itself is only very slightly profitable. Agreed. Even though it is decent revenue, not much of that flows through to the bottom line. I am starting to believe we may see that change as more of the revenue seems to be coming from gift cards. This could help make it more profitable (maybe not any more material) due to the fact that credit card fees as a % of revenue for the transaction would go down vs. say $1-3 transactions via the online store. It's not a lot but if the estimates (I've heard anything from $.10 to $.25 for a $.99 song for online sales) are correct and instead Apple is able is able to sell more $25 and $50 gift cards where the fees are more like $.25 + 2% of the transaction amount, it adds up when you multiply the savings by millions of transactions. Though there is the matter of the merchant selling the card taking a cut... anyone know what the retail margin on gift cards is?