How is it that Saul Hansell, who has been covering technology and media for so long, thinks iTunes is a 28% gross margin business? Given that most of the purchases are made 99c at a time, the auth + transaction credit card fees alone (even though Apple tries to hold them for a few days to batch them together) bring it down to about 18%. Then with bandwidth, servers, and other cost of sale items, it’s about an 11% gross margin business.
That, he thinks, is good for Apple? Are you kidding me? A company who’s hardware GMs are 40+%? Jobs is right and Hansell’s wrong — iTunes and the AppStore are low-margin businesses which enhance the hardware products.