Apple Announces Most Profitable Quarter in History 761
zacharye writes with an except from an article over at BGR about Apple's quarterly results: "'Disappointing' though it may have been to some, the iPhone 4S propelled what is now confirmed to have been the most profitable quarter any technology company has ever recorded. Apple on Wednesday reported record earnings for the December quarter, revealing a profit of $13.06 billion on revenue that surpassed $46 billion. Among technology companies, Apple's fiscal first quarter represents the most profitable quarter ever recorded. Only one U.S. company has ever posted a more profitable quarter — Exxon managed a profit of $14.8 billion in the third quarter of 2008 — and the driving force behind Apple's record-setting performance was quite clearly the iPhone."
Nokia and RIM (Score:5, Insightful)
Nokia and RIM should read and weep. This should have been them.
Re:Nokia and RIM (Score:5, Funny)
Nokia and RIM should read and weep. This should have been them.
Poor choices of business partners and lack of vision on the part of RIM, nothing new there. Someone has to win.
I imagine Steve Ballmer needs a new chair at the moment. So that's a plus for the local office furniture outlet he buys from .. expect them to declare a good quarter, too.
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Apple makes more money from its smartphone than every other smartphone manufacturer in the world combined.
The top-selling smartphones in the US last quarter were, in order: iPhone 4S, iPhone 4, iPhone 3GS.
And the tablet market? Let's call it what it is - the iPad market.
Re:Nokia and RIM (Score:5, Insightful)
Re:Nokia and RIM (Score:5, Insightful)
I hear Kodak had a huge market share too.
Re:Apple has greater market share too (Score:5, Insightful)
The number of iOS devices (iPhone and iPod Touch) sold last quarter exceeded the number of Android units
Just barely, and only if you believe that overtly biased analyst's estimate. And why would you count the Touch as a phone? Apples to apples please :-)
More to the point, there is no guarantee of a repeat next quarter, far from it.
Re:Nokia and RIM (Score:5, Informative)
Mmm... when Steve came back in 1996 and introduced the reworked Apple (with cleaning of the board and going back to the strongpoints) he also announced a deal with Microsoft where MS injected money for non-voting shares (that MSFT made use of 5 or so years later with hefty profit) and promised to bring office etc to Apple's platform for N years. THAT did save Apple to some extent as Steve's said that they were days away from bankruptcy.
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THAT did save Apple to some extent as Steve's said that they were days away from bankruptcy.
No, not according to news reports at the time. Apple had 1.2 B in cash on hand [cnet.com]. The 150M was nice but was nothing that would save them from any bankruptcy. The bigger help was Office for Mac and other cross licensing deals.
Re:Nokia and RIM (Score:5, Informative)
There are only 3 models of iOS phones currently being sold. You can't expect one of the tens-hundreds of Android phones to outsell anything on a platform of only 3 models.
And the reason for this is that Android users have Choice - this is a Good Thing, not a Bad Thing.
Re:Nokia and RIM (Score:5, Interesting)
There are only 3 models of iOS phones currently being sold. You can't expect one of the tens-hundreds of Android phones to outsell anything on a platform of only 3 models.
And the reason for this is that Android users have Choice - this is a Good Thing, not a Bad Thing.
It's only good to a point to where the models are actually supported. If you buy a smartphone and the mfg never updates the software or supports it afterwards due to the next big thing coming out, I don't see how anyone can see that as a good thing, unless the model was near perfect at launch. Having too much of this Good Thing leads to bad things.
Unware (Score:4, Insightful)
First of all, if Apple does any R&D
Webkit?
LLVM?
Obviously doing material based R&D on materials for cases and such...
It's a little odd how even the most casual, and certainly any technical user, could be unaware of the R&D Apple does.
Hell just with LLVM alone they are probably even ahead of Microsoft in modern compiler research!
Re:Nokia and RIM (Score:5, Informative)
First of all, if Apple does any R&D, I'm fully unaware of it.
Apparently, such fullsome unawareness is a willful choice on your part, because R&D is a line item in public companies' income statements [edgar-online.com]. Looks like Apple spent $758 million last quarter. If that's typical, then that's about $3 billion a year.
I guess you're fully aware now.
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And seriously, a person only has to compare Apple products at launch to the competition to see if there is any R&D being done.
The iPhone at launch was entirely like any other phone on the market. It inspired a new generation of phones from almost every other manufacturer. The bulk of the R&D on that product might have gone into ergonomics and user interface and not "new technology", but that's still R&D and it's still significant.
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The iPhone at launch was entirely like any other phone on the market..
Your misspelling is accurate. the iPhone didn't do anything new that existing smartphones did. In fact, almost all of the iPhones "new" features were already available on other devices.
But it is pretty.
And yet very few used those "existing features" before the iPhone came along.
Either those existing features were too cumbersome to use, or the makers of those phones had the crappiest marketing of all time.
"Pretty" was used to dismiss the Mac GUI (or any GUI) in the pre-Windows 95 days, and yet every major consumer desktop OS today still uses a close variation of all its original key concepts, almost 30 years later. "Pretty" is just the term ignorant people use to dismiss design and polish.
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Samsung, Motorola, HTC have made some outstanding pieces of hardware
Not a user feature
nothing I've seen comes close to beating Samsung's sAMOLED+ screen
Not a user feature
Apple was far late to the game in providing dual-core processors in their phones
Not a user feature
Apple doesn't care about what it HASN'T included, it cares that what it HAS included is user-friendly and easy to use, is manufactured and sold at a price that no competitor can match, and (more than anything) that it is available on the exact
Re:Nokia and RIM (Score:5, Insightful)
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iPhone4's are top selling model only because competitors like Samsung offer many different models.
And which one of those strategies seems to be working the best?
Re:Nokia and RIM (Score:4)
Other than Samsung, who's actually making growth in this industry? RIM and Nokia aren't. HTC isn't, Moto isn't.
Unless you're able to vertically integrate like Samsung does, having a huge smattering of devices isn't particularly healthy.
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I don't see why any consumer would care. Here's how economics works: companies come up with products and services and people buy them, or don't buy them. People are buying iPhones at Apple's price, which means that people perceive that there is value in them.
Frankly, the fact that there are significantly cheaper options out there and yet Apple still manages to do so well speaks volumes as to how happy their customers are.
People joke about Apple "fanbois" and there is some truth behind the derision, but c
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Re:Nokia and RIM (Score:5, Informative)
But - How come we don't hear the politicians demanding a "windfall profits tax" like they did with Exxon two years ago? I guess it's only bad to make a profit if you're an evil oil company, but if your a tech company it's a good thing to rake-in equivalent amounts of money.
Um because Exxon was collecting subsidies from the US government at the same time they were making extreme amounts of profit. I am unaware that Congress enacted laws to give Apple subsidies. Also Exxon moved their headquarters to Switzerland [cbsnews.com] to reduce taxes than Apple which is still an American company. Now if you go down to Houston, the buildings and workers are still there. They just moved to Switzerland on paper.
Re:Nokia and RIM (Score:5, Insightful)
I don't know the real numbers, but Android could still be winning. It's not as if all of the different manufacturers have one joint financial statement.
More than half of Verizon smartphone sales in Q4 were iPhones
Read more: http://reviews.cnet.com/8301-19512_7-57365200-233/more-than-half-of-verizon-smartphone-sales-in-q4-were-iphones/#ixzz1kQco5gZ4 [cnet.com]
And the rest is shared between all the numerous Android manufacturers, not to mention RIM (which is still hanging in there), the smattering of Windows Phone manufacturers and a hodge-podge of low end smart phones still running Samsung's Bada or Nokia's Symbian.
You are correct... Android is not a company with its own income statement. The Android handset manufactures compete among themselves as much as they compete against the iPhone. And the thing that is rarely ever said out loud (only whispered in dark tech filled corners) is that the majority of the Android registrations that Google cites in its numbers are cheap low end hand sets that most people pick up for free on a two year contract...
The Android standard bearers such as the Galaxy S2 and some of the HTC models are easily as good as or better than the iPhone... but so many people are entering the smartphone world at the bottom end; and that space is filled with so many so-so Android devices, it is understandable why some (39% according to the latest research) make the switch to an iPhone as soon as they can.
Platform loyalty: 94% iPhone 47% Android (Score:5, Interesting)
Of course some people seem to think that Windows and Android are winning.
It all depends on your definition of winning. One of the analysts covering the mobile industry was being interviewed on CNBC after Apple reported their quarterly results. This analyst claimed that 94% of current iPhone users would buy another iPhone but only 47% of current Android users would by another Android device.
Re:Platform loyalty: 94% iPhone 47% Android (Score:5, Interesting)
The reason for the high rate of defection is not because Android is not as good as iOS, but rather because so many people pick up free (on a two year contract) low end Android devices and those really tend to be very bad.
Google has done such a great job of showing people what a great platform Android is that people start to think that every Android handset is like a Galaxy S. Many people are still picking up no-name-brand Chinese specials running an outdated version of Android and cursing their decision everyday. Not every Android device is a Galaxy S2... and consumers need to realise that.
Re:Platform loyalty: 94% iPhone 47% Android (Score:5, Interesting)
I bought a Droid shortly after they came out. My wife bought an iphone right around the same time.
I was cursing the Droid probably 6 months after I got it. The thing was just slow, unresponsive, and sucked.
Fast forward last fall. The Droid was locking up constantly, while the iPhone was still quite responsive and felt like new (almost--two major OS revisions had slowed it down a bit.) I couldn't ditch Android fast enough.
It's not just the low end phones.
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The problem Google has is they still don't understand service. Which you would think is odd since their search engine was built on top of being the best as services search queries...
This service problem works it's way into many things. But the worst is it is blinding them from where they got their initial success. Most of Google's products since have been released for "free as in beer". They essentially tried to apply the ad model to everything without recognizing that it doesn't work in all cases.
If th
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Actually iOS ships on more devices than Android.
What makes you think Google cares how many music players ship?
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They didn't have Jobs. When he came back Apple was almost bankrupt and had to be rescued by Microsoft. It took great vision to take a nearly broke computer company and take on the most contested markets like consumer electronics and music and win through quality and design of the products alone. And I'm not even an Apple fanboy.
Re:Nokia and RIM (Score:5, Informative)
[...] and had to be rescued by Microsoft.
I'm not sure that's entirely true.
One of Apple's biggest problems at the time was that they were going out of business. It was all over the news, in case you missed it. Apple was going out of business. Everybody knew Apple was going out of business.
Now, would you buy a product from a company that everybody knew was going out of business? Would you consider selling parts or components to a company that everybody knew was going out of business? If you would do so, would you offer them decent credit terms? Of course not--they're going out of business! Everybody knew that Apple was going out of business! You'd be crazy to offer them any kind of credit because they'd go out of business and you'd be left trying to collect pennies on the dollar in bankruptcy court.
It's tough to build iMacs when you have to pay cash up front for parts.
Microsoft's cash investment was $150 million in common stock--remember that, at the time, Apple had something like 4 billion dollars in the bank. So the dollar amount wasn't that much. It was more the press of Apple being aligned with Microsoft to basically shut up all the "Apple is going out of business" people. Once everybody decided that Microsoft wouldn't let Apple go out of business because then Microsoft would be a monopoly (of course,, Microsoft tried to play the Apple card during their monopoly trial and the judge decided that Apple was not a competitor of Microsoft), Apple was able to get better terms.
I will agree that Microsoft "rescued" Apple. But the rescue was more in the terms of reputation than in cash.
Comment removed (Score:5, Insightful)
Re:Nokia and RIM (Score:4, Insightful)
Re:Nokia and RIM (Score:5, Insightful)
I can. Most of the phones in the world will still be nokia's basic phones just like they have been for last ten years or so. Why? Because in the biggest markets (in terms of numbers sold), people can't afford anything else.
Remember to mention that you're talking about SMARTphones if you want a discussion about rich markets and place where android, ios and black berry have a standing.
Re:Nokia and RIM (Score:5, Interesting)
Yeah... when you look at the global stats (not just the US and Europe) you see that about a third of all smart phones sold each quarter run Symbian OS. http://gs.statcounter.com/#mobile_os-ww-monthly-201101-201112-bar [statcounter.com]
It is easy to forget that when we talk about iOS, Android, Blackberry and Windows Phone, we are talking about touch screen smart phones - which still make a tiny portion of the number of handsets sold globally, but a huge portion of the revenues earned by the industry.
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While that's true, what we think of as smart phones (QWERTY keyboard or large touch screens) aren't what these stats consider to be smart phone. The candybar Nokia E51/E52 is considered a smartphone.
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None whatsoever, and I'm not blind. Low end symbian phones go for ~20-30 USD right now. Each android phone pays about 10 USD to microsoft in licensing costs. Then you have to factor in the reality that symbian requires almost an order of magnitude less computing power and RAM to run.
Hell, don't take it from me. Take it from the person who known a whole lot more then you or I about the issue: samsung. They explicitly and publicly state that they cannot compete with nokia in low end phones. End of story.
WebOS (Score:5, Interesting)
As a WebOS fan, this makes me sad. Why would HP give up on such an incredibly profitable market after only investing $3.3billion http://techcrunch.com/2011/11/21/hps-failed-webos-experiment-cost-them-3-3-billion-but-whats-next/ [techcrunch.com] ? The iOS and Andriod user experiences still have not passed WebOS smoothness, in my opinion, though the notification systems are catching up.
Although HP's management style of WebOS reminded me of: "They say you gotta spend money to make money. I don’t know what went wrong. We spent all our money." - Tom Haverford
Re:That was sad (Score:5, Interesting)
I completely agree. Having used Android, iOS and WebOS I agree that WebOS was a superior platform to both of them. However, WebOS failed on two fronts:
WebOS failed where Apple succeeded because WebOS didn't have the cult following, and WebOS failed where Android succeeded because many hardware manufacturers made Android devices.
Everyone has to admit that the flagship WebOS device, Palm Pre, was a beautifully designed device. It even made the iPhone look like an eye sore, but it was clear from day one that without the support of the fanboys and without the blessing of the hardware manufacturers it was just not going to go anywhere.
Re:That was sad (Score:4, Informative)
You should check out QNX on the Playbook -- It's undoubtedly rather heavily inspired by WebOS, and smooth as silk.
American jobs (Score:4, Insightful)
And yet Apple couldn't manufacture iPhones in the US because they couldn't afford the extra $49 it would cost to make iPhones here. It might shave a few millions off of those billions. Can't have that happen!
Re:American jobs (Score:5, Insightful)
I think if I went to my boss and suggested it would be a patriotic move to build here and it would only cost us $8 billion a year, I would probably be looking for work.
I am a big fan of building in the US, but let's look for products like construction equipment (that take large amounts of natural resources we have, and are expensive to ship), and do those first. (See Caterpillar for a success story like this). When China's economy has caught up to ours (they want Lattes too), then we can look to compete on things like electronics that are cheap to ship.
Re:American jobs (Score:4, Informative)
Considering that the only reason Apple exists is because of American prosperity, they have a duty to aid in the continuation of that prosperity so that the innovators of the next generation receive the same benefits that they did. Reducing their profits by $1.8B out of $13B is not asking all that much... only about 14%. Less than Mitt Romney pays in taxes!
Besides, pumping an extra several billion dollars a year into the pockets of middle class Americans will increase the sales for all Apple products, so the actual cost to the company would be less.
If they don't do it voluntarily, slap a 15% tax on overseas production and give that money to the poor and unemployed. It would be more efficient if they did the right thing by choice, but if they don't, we should obtain the effect by force.
Re:American jobs (Score:5, Insightful)
Do you think Steve Jobs would have started Apple if he had been born in Kenya? Would the engineers there be able to design great devices if the electricity was only on for four hours a day? What if some warlord rolled through, enslaving, raping, and murdering anyone in their way?
There's a reason you don't see any successful businesses based in Somalia. You need a prosperous, stable nation as a launching point. Companies like Apple are quite happy to take advantage of the great conditions here, but give absolutely nothing back. Those conditions won't be around for the next generation as a result.
Re:American jobs (Score:5, Insightful)
Yeah I understand your argument but you're acting like one half is more important than the other.
There's a reason Apple is making billions of dollars and you're not. You both have the advantage of American prosperity and stability. But they made it and you didn't (not to the same level). And yet you want your "piece" of their success.. and the only thing you did to earn it is to be born into this backdrop of prosperity and stability which you have very little responsibility for. So why do you deserve anything more than the same opportunity that the people high up in Apple have? And you already have that opportunity because you live here, you don't need to steal their money to have it.
Even this late in the game you could get a piece of the action by working for them or buying a tiny amount of their stock.
Let's do some calcs.. you said $1.8 billion, divided by 300 million, that's $6 per person. How many shares of Apple would you need to buy to get that same $6 legitimately and morally, not by just taking it from them at gunpoint? Well probably about 1 share the way their price has been appreciating, you'll get more than $6 per quarter.
But nope, that's not good enough for you! They "owe" it to you, because they happen to benefit from American prosperity (just like you).
You know, I can totally get on board with this sense of entitlement. I'll do you one better. China's economy is heavily dependent on American wealth.. so they owe their success to us too. In fact we should own like 60% of China. Africa takes a bunch of aid money from us, I propose a 75% tax for everybody in Africa, payable to us.
Btw this is exactly why so many left wing movements evolve into fascism, from unions to communist regimes. Turns out everybody owes you everything, and you and your buddies are just the men to make them pay their fair share. Screw freedom, it's wealth that makes us all happy and successful.
Windfall profits tax! (Score:5, Insightful)
When Exxon posted those profit numbers people were screaming for a windfall profits tax. Where are those people now? Probably listening to their iPod, tuned out to the world.
Re:Windfall profits tax! (Score:4, Insightful)
Unlike Apple, Exxon deals in commodities with inelastic demand. It could be argued more readily, I suppose, that Apple actually earned those profits while Exxon gains them purely of virtue of having pumped it out of the ground. YMMV.
Personally, I would have more respect for Apple if they started paying a dividend.
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As others explained already, oil is a commodity. Regular gas costs the same whether you're well off and bought a decent new car for $25,000, or if you're a broke student forced to buy a used $500 clunker.
No one forces you to buy a luxury item, and people don't complain much about phone prices because there's plenty of choice, at different price points. They'll rant about the ridiculous monthly fees, of course.
Scaled Tariff (Score:5, Insightful)
This would not only restore manufacturing, but it would also improve our tax base, rather quickly. Finally, it would force nations that we have supposed open markets with that manipulate against us to change their behaviors.
So, for our top 20 nations that we trade with, this would punish the following:
While giving other nations like Canada a pass:
Interestingly, this is legal PER WTO. WTO's position is that when a nation's trade deficit is larger than 10% with another, than you may take action.
The trick here is to convince the neo-cons that are attached to China's pants to let go and back America instead. Right now, far too many neo-cons are the ones blocking efforts at a balanced trade. In addition, without a budget deficit below 500 billion (or so), this probably becomes impossible to do.
Re:Scaled Tariff (Score:5, Insightful)
Or instead of crippling yourselves with trade manipulation you could just repeal the Bush Era Tax Cuts - there's 2 trillion right there, that barely touches the bottom 90% of earners and yet will cost the US 2 trillion dollars - more than twice the "expensive, wasteful, ill-affordable" healthcare bill.
Get your house in order before blaming countries like Germany, who have built a very strong export economy, for harming your own. You'd hardly say that Germany was in the position it's in by being like China in the way it goes about becoming a large net exporter - this is not simply about "restoring manufacturing" - it's not as simple as that by a long shot.
Re:Scaled Tariff (Score:5, Insightful)
The Republicans took millions of people hostage last time we even talked about reducing the Bush tax cuts. They'd burn the country to the ground before allowing them to be dropped entirely.
When ~50% of your government is insane, evil, or both, the best course of action is usually unavailable. We've got to work with what we've got.
Re:Scaled Tariff (Score:5, Interesting)
However, the solution to a trade gap is not protectionism. It may help in the short term, and appear to be an ideal solution but it only hurts the economy as a whole and stifles growth.
Examples? This seems to be an oft-quoted talking point, but I've seen few evidence to support it.
I do have a counter example. Brazil has high import tariffs, which apply, among other things, to Apple products. Did Apple pull out of Brazil? Hell no. Foxconn is building a factory in the country now so that they can manufacture locally and dodge the tarrifs. End result: numerous local jobs which feed right back into the country's economy, and, of course, all those workers pay taxes, too.
It's perfectly logical, too. Apple can outsource manufacturing to China to cut costs, but they can't sell as many of their gadgets there as they'd like to (to make profits like the one in TFA). They need rich countries for that - the kinds of countries where workers are not overworked and starved so they have interest in fancy gadgets like that, and paid well so that they can afford them. So if you just make that particular method of cutting costs unprofitable - via tariffs, for example - you'll see manufacturing plants in U.S. and Europe in no time.
And no, you can't compete with China otherwise. Not unless you are willing to bring the standard of living down of their level - and not to the level of Chinese middle class, which is the lucky 200 million; but down to the level of those factory workers, who think of their 12 hour job as God's grace compared to what they face otherwise.
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Have you ever read any comments by a Brazilian geek, or indeed one from any other country with this kind of high import tariffs? The main effect is that prices of consumer electronics are so inflated as to be unaffordable to most of the population.
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Nice buck passing.
Where's that image meme of Bush with the tagline "I fucked it all up but thanks for blaming it on the black guy".
Ideally Obama wouldn't have extended them, but he really had no choice - you saw that the Tea Party were willing to force the country to default over taxes, and you think he'd be able to pass a 2 trillion dollar tax hike for rich people?
Re:Scaled Tariff (Score:4, Insightful)
What is interesting to me, with the continual WTO talk, is that imports are taxed heavily in China. The item does not even need to be an imported product, it only needs to be an imported brand.
This means that even if the product is made entirely in China, if the brand is significantly foreign owned then the item is taxed at a rate that is equal to the amount that is projected to leave China due to the purchase. Tax code is actually a bit more complicated than this; but that is basically how it works.
This allows the Chinese branded competitors to the American and German brands to establish their production process, allowing them to compete internationally. To the Chinese consumer the result is higher prices.
Part of the reason for the higher prices is that the Chinese manufacturer does not need to offer the item at a lower price, or even the the same price as the, Chinese made, item is sold for in the US and EU.Like I have mentioned here before, it is cheaper for me to have friends in America purchase items like smart-phones and computer and mail them to me in China than to purchase the item in China. Even most household goods, other than the most basic items manufactured by "not for export" companies, are more expensive in China.
Right now China is playing both sides, they are calling to the WTO when anyone considering responding to China's practices and the results of those practices. At the same time China is crying, "oh, pity poor China," when anyone considers demanding that China obey the same rules that it demands that others abide by.
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as to taxing those companies, they simply move their HQs. Issue solved for them.
Re:Who Cares? (Score:5, Insightful)
I'll have to disagree ...it's tech worthy news. The more money Apple gets, the more money they have to influence the shape of things to come.
It's good to be aware of the shifts in power and the current status quo regardless of whether you are a fanboi or not.
Re:Who Cares? (Score:5, Insightful)
I'll have to disagree ...it's tech worthy news. The more money Apple gets, the more money they have to influence the shape of things to come.
It's good to be aware of the shifts in power and the current status quo regardless of whether you are a fanboi or not.
Speaking of which :
@fmanjoo [twitter.com] : "Apple's profits ($13 billion) exceeded Google's entire revenue ($10.6 billion)."
Thought that was pretty mind-blowing since we're all used to thinking of Google as some kind of juggernaut.
Re:Who Cares? (Score:5, Interesting)
None of the other phone or tablet makers have this kind of profit margin, yet their products easily match the iOS products
in quality and ease of use.
1) "match the iOS products in quality and ease of use." We'll have to agree to disagree on that one. Most Android phones I've seen (with some very few exceptions) feel cheap, they feel much cheaper than they are in fact.
2) Android makers get the OS for free, remember Apple does more than just sell the hardware. There's R&D, software development, patents to be bought, etc.
3) Even with a free OS, show me the phones and tablets significantly undercutting iOS devices while providing the same quality. And the "going out of business, please buy our inventory" sales don't count.
If apple cut their prices the "cool factor" would be diminished, and the fanbois would move onto something else. If they aren't over paying top dollar its just obviously not the best thing ever.
To me calling people "fanbois" and looking down on them because they think "the mainstream is so cool but they don't know what's cool, I know what's cool" just makes you another hipster. Just accept there are people who like something different from you, is that so difficult ? I can see why people like Android or Windows Phone, that doesn't make them idiots or "fanbois" just people with other needs.
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Don't forget that Apple got their OS for free too (most of it, anyhow).. since its primarily based on BSD, which they use and then of course contribute little back to the open source community, unlike Google who makes significant contributions to many open source projects
Oh really?
It looks [apple.com] like Apple contributes [apple.com] quite a few open source [opensource.org] projects.
Re:Who Cares? (Score:4, Insightful)
That'd be a great point, if customer satisfaction surveys and analysis of support call center numbers didn't suggest the exact opposite of what you've just claimed.
Here's what's funny: the iPad has been competing with similarly priced competitor devices for a while now - devices from Motorla, Samsung, Dell... how is it that those other makers have lower profit margins on their devices (by your own claim), yet Apple could cut the price of the iPad in half and still make a profit?
And the profit levels absolutely do say something about the shape of things to come: the person with the thinnest profit margins is the one who has to start cutting corners on build quality and components to be able to make a profit. The person with the biggest profit margins has some room to reduce their per-unit profit without sacrificing build quality, allowing them to maintain their market share in the face of competitive pressures.
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It may not make sense to you, but it sure make sense to apple fans.
If they didn't care about technology they wouldn't buy every new phone apple puts out.
Making things expensive has ALWAYS brought new customers and repeat customers. If the product in question is anything other than a commodity, raising the price, and thereby implying a better product always sells well [upenn.edu].
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The fact you can raise a price to imply a better product, does not mean that expensive products are not better.
By there very nature better products will often cost more to produce.
People really struggle to separate price and value.
Re:Who Cares? (Score:4, Interesting)
Apple now has $96 billion in cash/equivalents.
Which means that the $100M spent on Android lawsuits accounts for just over 0.1% of their current cash (equivalent) reserves. Barely a blip on the quarterly report.
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Re:Who Cares? (Score:5, Interesting)
It shows that nerds are wrong and Apple is right.
Seriously, you're confronted with an existence-proof.
Money is the final decider? (Score:5, Insightful)
Re:Who Cares? (Score:4, Informative)
Nerds are often arguing about issues that require foresight
That is exactly right, and why you should place no stock in predictions from those on Slashdot that constant predict Apple's demise for reasons that plainly make no sense and exhibit the continued misunderstanding of the market as a whole.
something the general public doesn't have when it comes to IT because they're good at other things than us.
And yet the general public generally speaking could have told you Apple continues to fare well, just form anecdotal evidence. So should not there be some giant red flags here that nerds En Masse have apparently willfully given up the power of foresight simply because of hatred?
Which is why we still argue that the 'losing' alternative is superior.
You can still argue something is superior while correctly predicting the thing you think is not superior will win out and understanding why. That's what helps you to make the truly superior thing fare well in the market.
But again many nerds here on Slashdot have instead decided over and over again to proclaim Apple is not successful because they say so, and the technologies they favor will win "just because". That is not going to work out well long-term.
Re:Who Cares? (Score:5, Informative)
abusus non tollit usum [merriam-webster.com]
: abuse does not take away use, i.e., is not an argument against proper use
That is, fanboyish reactions do not strip the relevance of one of the largest players in a tech industry making more money than ever before, or prevent sane discussion of the fact.
Re: (Score:3)
abusus non tollit usum [merriam-webster.com]
: abuse does not take away use, i.e., is not an argument against proper use
Quod Latine sonat alta.
Re:Who Cares? (Score:5, Informative)
You should learn a few things about investing before making a fool out of yourself. The fact that AAPL shares are above 400$ bares no meaning at all on whether the price is "sky high" or not. Berkshire Hathaway class A shares are over 100,000$ each and their price is not "sky high" either. It's all about the actual valuation metrics of the company relative to the share price and according to them, AAPL was actually pretty fairly priced before the earnings release.
Or are you going to be making even more of a fool out of yourself by sticking to your guns and saying that a PE of 15 for a company with projected 30% revenue growth is "sky high"? Except that it was actually even cheaper then that, because the revenue growth ended up being twice higher.
Re:Who Cares? (Score:5, Funny)
Damn you, dnaumov, now I have to open at least 5 Wikipedia tabs so I can later pretend I understand something about investing.
Lessee... "PE".... 41 matches. This is gonna take a while...
Re: (Score:3)
I think they meant it was Apple's most profitable quarter ever and the second most profitable for any US company.
Re:Who Cares? (Score:4, Interesting)
I know the fundamentals of AAPL back up its valuation. So maybe, the purchase habits of consumers in our society have gotten way out of whack with reality.
Re: (Score:3)
Nothing lasts forever. But Apple have put together a quite amazing run. If Apple were to shut down tomorrow, and distribute all of its cash as dividends, it would be returning 100bn to its investors, and for anyone who invested in Apple 10 years ago, they would be getting a stupidly large return. That for what was already a mature company.
Re:Bubble? (Score:5, Interesting)
They make very little from the software/media sales. Gross margins on the hardware are huge though: 44.7%. Tim Cook indicated in the conference call that that's probably not a sustainable number (their margins are typically in the high 30s). But the raw numbers of devices they sold grew by stunning amounts. Even Mac volumes rose by more than 25%, and that's in a PC industry that's not doing that well in aggregate.
Say what you want pro or con about their products, but they know how to make stuff that people want to buy.
Case in point: Verizon reported that iPhones accounted for 55% of their smartphone sales last quarter. That's against how many different models of Android phone?
Stuff that people want to buy. KEY PHRASE. (Score:4, Interesting)
Everyone I know has gone Mac in the last 2-3 years, and most have a story like mine. I was committed hardcore to another platform, though I had more than a few complaints. Still, no expectation of ever switching.
But the iPhone was a quantum leap in consumer technology. I was using a Palm, which was "not a bad smartphone" the month before the first iPhone announcement was made. Then iPhone was released and after 10 minutes using it I knew it was a completely different class of device. Within a few months I had realized that I couldn't keep my hands off one and bought it. Rather than let me down and gradually disappoint me, leading to rationalization and acceptance (the usual model for technology buys of all kinds), it continued to impress weeks and months into ownership and I have had no desire to switch—only to upgrade—ever since.
When iPad came out, I was absolutely sure I didn't need one, but ended up using one regularly for reasons unrelated to my own consumerist impulses. But boy did it drive those consumerist impulses... Again, within months I had bought one and it has becomemy most used and relied upon work device.
After those two experiences, Mac OS didn't seem far off, and already being in love with iPhone/iPad based on my own use of them, the one annoyance I had with them was the way that they seemed not to mesh as well with other platforms (in my case, Linux, but the same goes for Windows) as they do with Mac OS. So I resolved never to spend Mac-level money, but to buy a very old old used Mac and a Mac OS update pack, and get the OS X pack running on a hackintosh machine to "test the waters." I built a hackintosh box for $250 or so with a dual core mainboard, Firewire-800, and a RAID-1, and within a week of using it I knew I would soon migrate my life from Linux (where it had been since 1993) to Mac OS.
Within six months of going "Mac OS only," though, the difference in quality and hardware/software integration between my iPhone/iPad and my other technology devices (a hackintoshed desktop and a hackintoshed Thinkpad) was painfully obvious and I knew that I was done for—I really, really wanted access to true Mac hardware to avoid the niggling little issues and flaws of PC world hardware that seemed increasingly apparent to me.
Got a MacBook Pro 13" machine last January, finally.
It is the best computing device I have ever owned, bar none. Build quality is exceptional, fit and finish are so precise and refined that you feel as though it wasn't made by humans, but by perfect machines. Even the ThinkPads I'd always owned had little things that I'd never noticed. For example, I would never have said that the power switch was slightly crooked or that there was a little key vibration and noise in some keyswitches, or that the hinge had uneven tension throughout its range or that the display was a bit uneven in its brightness UNTIL getting and really using a MacBook Pro. The build quality is measurably better. It has raised my expectations for technology goods.
Aside from that, the ergonomics are also much better. Apple's touchpad and keyboard, though very foreign to me at first, have now enhanced my work speed considerably. For example, the key travel distance and key "give" on the chicklet keyboard has given me another 10-15 wpm in typing speed with no loss (indeed, a gain, thanks to keys not touching each other) in accuracy.
And of course beyond all of these things, there are just fewer fatal flaws. No BIOS to worry about. Exceptional battery life. No need to fuck around with drivers. No "update hell" in which the latest round of absolutely necessary updates kill some functionality in your system that you rely upon, leaving you installing/uninstalling/tweaking in a desperate haze for hours or days (problems seen both in Windows and in Linux). Just massive, massive piles of It Works Without You Having to Think About It, and It's Tough as Nails to Boot.
My parents and siblings' families have gone Mac (something I never thought would happen, an
Re: (Score:3)
It is the best computing device I have ever owned, bar none. Build quality is exceptional,
I've heard this a lot. I've been surrounded by Macs and Apple hardware for quite a while and they've certainly had their problems. Many of the problems seem to come from the fetish for thinness which tends to sacrifice build quality for thinness.
I used to work and live at high altitude (7200 feet). At the time (2006 or so) it was rare for a macbook pro to last a year before all the fans died. Not so for other laptops
Re:Bubble? (Score:4, Interesting)
> Apple's success is the limited variance. They make a few models of each device, and generally a good/better/best option for each
That is certainly a factor.
See: http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice.html [ted.com]
For why choice is a bad thing for consumers.
Re: (Score:3)
Take a look at this chart.
http://cdn.macrumors.com/article-new/2012/01/appleq112topchart.jpg [macrumors.com]
The orange strip is revenue from downloads. Sure Apple makes money from them, but it's dwarfed by the money they make from hardware.
Just where does your Android phone comes from? (Score:5, Interesting)
They are building all their products in China. What's so hard to figure about this?
So is everyone else. Everyone else is not enjoying this level of increase in profits quarter after quarter, or the same margins that Apple has.
Only Apple as far as I know has started moving any production (the A5 chip) back into the U.S.
OK, Foxconn will now pay the workers a few Renminbi more
They already do, and yet Apple's sales surge.
Re: (Score:3)
Only Apple as far as I know has started moving any production (the A5 chip) back into the U.S.
No, that would be Samsung [samsung.com] that's doing that [reuters.com]. And I don't know if you've noticed, but Apple and Samsung haven't been getting along that well recently. (Something about Apple thinking they own the rights to rounded corners in electronics or something.) It's unclear whether or not the A5 will continue to be manufactured by Samsung at all, let alone in Texas.
Re:Bubble? (Score:4, Insightful)
The Foxconn factory complex in question has a lower suicide rate than the overall suicide rate for China. When you have half a million employees in the same city, some of them are gong to commit suicide. If you have half a million humans in the same city, some of them are going to commit suicide.
Re:Bubble? (Score:4, Interesting)
I've always wondered about this statistic.
When you compare a single company to a country, you have to consider demographic differences. For example, suicide rates are generally higher among the unemployed, among the mentally unstable, among the elderly, etc.
Foxconn employs people who are young, healthy, sane, not on drugs, and (obviously) gainfully employed. What is the national rate among that demographic, and how does Foxconn's rate compare? My guess is not favorably.
Re: (Score:3)
Even less thought has been put in by the posters that refer back to the story as if suicides only happen at Chinese factories producing iPhones.
I don't think those people are being any less honest than the people who try to brush it off as a normal suicide rate by improperly applying statistics.
Re:Bubble? (Score:4, Interesting)
I hadn't realized you're the same person who posted the initial comment, so please don't think I was singling you out.
However, you ARE misusing statistics. Maybe not intentionally, but you are all the same. You can't just say "this stat is easily available, therefore I'll apply it" while ignoring all of the factors that would clearly run against your conclusion. For example, the median American wage right now is $33k. If Microsoft decided it was going to pay it's engineers $40k, you wouldn't say, "That's a good salary, because it's above what most people make." You have to compare apples to apples.
Re:Bubble? (Score:5, Funny)
And the number of "fanboys" appear to grow exponentially each quarter, judging by the financial results. How exactly do you imagine that Apple manages to keep on getting all these new fans?
WARNING: This question actually requires you to think. Be careful. Do some warm ups first.
Re: (Score:3)
I love this "the masses think" remark, because it exposes your elitism as well as lack of touch.
And the rest of your comment demonstrates your own elitism and lack of touch. Seriously, read your own comment. Since you don't use an optical drive, it's archaic? Since you're more productive with OSX, everyone else is as well? (I regularly use both OS X and Windows, by the way, and I'm far more productive on Windows).
Re:Massive profits (Score:4, Funny)
You lost me there. Everybody knows it's the drummer that has insight into everything.
Re:Massive profits (Score:4, Funny)
Re:Massive profits (Score:5, Funny)
Cause...
I'm a bass player
Meet effect...
it's now considered fortunate to have a shitty McJob
Re:Slavery is great! (Score:4, Insightful)
So the Android phones that are made in the same factory aren't as profitable.... why?
If it were solely down to the Chinese labour (who are not slaves btw, but we'll ignore the hyperbole) then there would be considerably more highly profitable electronics manufacturers.
Re:What's good for the goose (Score:4, Insightful)
The world's, and particularly the USA's, economy depends on oil. There is no alternative. The world needs oil. If the oil stops, everything falls apart. In other words, whatever the cost of oil is people will buy it. They don't have a choice.
If Apple stops, people will use a competitor's products. No big deal.
(see: "elasticity of demand")
Re:Expect... (Score:4, Insightful)
In related news:
Apple spent a tiny, tiny portion of their profits bludgeoning their competition in patent litigation.
$100 million sure sounds like a lot until you see how much they make.
Which is why I mentioned it. If you are on the other side of Highway 101, at a certain company you are probably cringing at this turn of fortunes.
Why not do evil? It evidently pays very, very well.
Apple knows something you do not (Score:3)
Apple is sitting on a giant pile of cash.
They probably have a very good reason for doing so.
So do you want to invest in a company with a lot of foresight or what?
And even if the market totally craters AAPL cannot go much below the cash value... around $82. A loss (if you were forced to sell then), but only 1/4 current value.
Re: (Score:3)
Me?!? No, I couldn't care less how much cash Apple sits on. The investment community however believes strongly in CAPM. What Apple is doing is equivalent to an individual putting cash under the mattress. From their point of view there are only two options, a) give it back to investors (dividends) b) invest in something that will improve returns. Holding cash or cash equivalent of this scale, from their point of view, is hurting their investors.
The investment community are a bunch of idiots. They were asleep at the wheel when the meltdown happened. MSFT is a company that pays dividends but their stock price has been flat for over 5 years give or take a few bucks. Dividends are a sign that the company is trying to make their stock look more attractive to "investors" because they are no longer a "growth" company.
Re: (Score:3)
"a) give it back to investors (dividends)" Why? If the company were not growing and their share price not rising substantially, I could see why they'd be remiss in not giving dividends. In the current climate, though, and especially when a company can go from saint to dog in a year, their cash hoard makes a lot of sense.
Re:so i guess. (Score:4, Informative)
1977 - Consumer friendly complete computer out of the box Apple II ...
1983 - Mass market desktop metaphor computer and software Lisa
1984 - Macintosh
1987(?) - Small business affordable ($6000) PostScript laser printer LaserWriter
2001 - iPod (hard drive based music player with easily purchased popular digital music, N.B. iTMS took some time to develop
2001 - Mac OS X first unix OS that allowed but did not require geek cred
2001 - Apple Store first tech store that didn't suck (usually) in contrast to Best Buy, Circuit City, etc
2007 - iPhone first modern multitouch based "smartphone"
2010 - iPad first tablet that is not a laptop wannabe due to same iPhone pioneered multitouch interface
Dates are off the top of my head so could be off slightly. You can contest all you want about "didn't exist before" but these things were not in stores available to buy from competitors
Re: (Score:3)
You do know that the income gap in China is narrowing, right? And it's widening in the US? Conditions in China are bad, but getting better. Conditions for workers in America are much better, but getting worse. Who's getting hurt here?
This is an expression of the free market at work, with a good dose of unintentional consequences for the corporate masters who shipped all the jobs overseas in hopes of getting cheap labour, thereby increasing the value of that labour, and slowly improving the lot of the worker