How Apple Will Make Money Off The Cards App

Apple recently revealed a new iOS app called Cards. Cards left a sour taste in many people’s mouthes. Why would Apple invest in a business model centered around greeting cards?

“You make it. We send it.”
— Apple 

Apple hopes that the Cards app will make it easy for the everyday consumer to produce personalized digital greeting cards. Apple will print and ship a physical copy of the card for a small fee, or micropayment. Prices are fixed at $2.99 for domestic addresses and $4.99 for international addresses. It does not matter where the recipient is, Apple will deliver the product.

Here, Apple is taking care of the last mile for the consumer. Buying (or printing) greeting cards then mailing them is a drag. And the truth is, you are going to spend about $2.99 to first buy then ship a greeting card.

For Apple, this is an easy business to be in. Instead of printing money, Apple is printing greeting cards. Heck, they might as well be printing money. This business has little to no variable costs. Once the infrastructure is in place, Apple will be able to print and ship greeting cards for well under $1. Remember, they are selling the cards for $3-5 a piece.

The timing of the launch is convenient. Apple is releasing the Cards app alongside iOS 5 on October 12th. This is right at the beginning of the holiday season. It will be interesting to see how hard Apple pushes the Cards app during the next few months leading up to Christmakkuh.

Check out Apple’s website for more information on the Cards app.