Actually, they make about $1.2B on online sales, i.e., iTunes. That's the 30% cut they made (so it's roughly $4B sales per quarter). Of course, it's a VERY tiny slice of the pie - you're talking about $1.2B revenue, when Macs sell an order of magnitude more, and IOS devices even more (another order of magnitude above that, I believe). Plus, it's revenues, not profit, so all that's re-plowed into iCloud and other services. And it's sales from apps, as well as much (30% cut too) and movies and TV shows (probably 30% cut there too - see a pattern?). And that revenue has to pay for hosting the free stuff as well. And don't forget that it's credit card fees and such - 20-30 cents per transaction plus 1-5% of total transaction value. Buy one 99 cent app a week and that 30% is consumed in charging your credit card. iTunes gift cards are probably break even as well - considering you can get them 20% off pretty regularly, which means Apple probably offers them to the store at 25% off cover price (i.e., a $100 iTunes card probably charges the store $75, so the sore gets $25 profit) since you can bet the store still makes a profit, and Apple's 5% goes into printing and distribution. In the end for Apple apps, movies, music, books, and TV are considered break-even-ish - value-adds for the consumer to buy Apple hardware. If you want to contrast this, take Amazon which sells content at a profit and hardware at break-even (Apple sells hardware, tosses content in as a value-add. Amazon sells content, tosses hardware in as a value-add.) Oh, and Apple's 30% cut isn't that high - comparatively. Books normally go for 50% off cover price wholesale. Console DLC can go between 25-40% off their sale price goes to the seller.