Apple Posts $18B Quarterly Profit, the Highest By Any Company, Ever 534
jmcbain writes: Yesterday, Apple reported its financial results for the quarter ending December 27, 2014. The company posted $18 billion in profit (on $74 billion in revenue), the largest quarterly profit by any company, ever. The previous record was $16 billion by Russia's Gazprom (the largest natural gas extractor in the world) in 2011. Apple sold 74.5 million iPhones last quarter, along with 5.5 million Macs and 21.4 million iPads.
Tax (Score:3, Insightful)
I wonder which country Apple are paying tax on that profit?
Oh wait, they are based in Ireland and pay no tax at all. Silly me.
Re:Tax (Score:5, Funny)
Apple has invented a really fabulous business model, which was previously monopolized by the churches and governments. They take a bi-yearly Apple-tax from their believers by making devices which have planned obsolescence.
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What is so wrong about selling a good product at reasonable price. Now I will agree with you that Apple devices are spec wise not at the leading edge and price/value wise not the best sell. But they are withing reason comparable to other high end products. What I must give them; or rather Steve Jobs, is the fact that they/he embraced the "it just works" mantra and many people want that. Now I like my Android the way it is: open; but issues with apple devices are only rarely seen. Granted it comes at the cos
Re:Tax (Score:5, Insightful)
We don't even have to debate the evilness of walled gardens
Evilness? The walled garden is the *reason* I buy Apple products. The only annoying thing is that they don't set the walls highs enough. If they would charge a few hundred dollars per app submitted, they could (1) examine apps more closely, (2) do it faster, and (3) eliminate the millions upon millions of garbage apps that clutter the app store with the expectation it might make a few bucks.
Sure, there exists the theoretical possibility that a good app might not get submitted, but the reality is that if you don't believe in your app enough to put a few hundred dollars behind it (or find anyone else to), it's unlikely to be a very good app. Almost all successful apps have a minimum of $50-100K behind them already.
Some modest barriers to entry are a *good* thing for the vast majority of consumers. And for those who really, really want the choice? They've got a jillion Android phones to choose from. No one is forced into the walled garden.
Re:Tax (Score:5, Informative)
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26% tax on 0 turnover... is 0.
(no I haven't read the filing, I just know how these tax dodges work).
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Re:Tax (Score:5, Informative)
It looks to me like you've got this wrong.
According to this Forbes article from 2013 [forbes.com], Apple routes all non-US sales revenue through Ireland. That's sketchy on the part of both Ireland and Apple, and offensive to all the other countries that get no cut from Apple's sales within their borders.
According to this financial statement [marketwatch.com], Apple paid $9.48b in current US income tax in 2014, $2.15b in current foreign income tax.
Pooling everything, in 2014 Apple had pre-tax income of $53.48b, $13.97b total income tax, for a net income of $39.51b.
I don't know how those numbers compare to other large corporations, or "socially responsible corporations", or whatever you want to compare to. But claiming that Apple routes US sales revenues through Ireland, or that Apple doesn't pay tax on its profits, appears to be completely false.
If I'm misinterpreting these numbers, please post corrections.
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That subsidiary appears to be managing cash assets. Now, last time I checked, Apple was sitting on an absurd pile of cash, and I'm sure income from it is non-trivial. But it's still likely a drop in the bucket compared to total corporate income, which IS taxed at significantly higher than 0%.
Bottom line, Apple paid corporate income tax equal to 26-odd percent of their pre-tax income. Feel free to argue that they should be paying more, or less, or exactly that amount. But if you're trying to imply that Apple
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Apple's sales revenues in the US are routed through this holding company in Ireland
This statement is 100% false. You're entitled to your own opinions, but not your own facts.
Re:Tax (Score:4, Interesting)
So when Tim Cook sat in front of a Senate Finance committee, sworn in and under subpoena, and said that they paid almost $6B in taxes in 2013 he was lying?
Why isn't he in jail if he lied to all those Senators under oath, on something so easily disproven?
Or are you just misinformed and wrong? I think we know which is more likely.
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Which is the amount they couldn't find a way to avoid. Their profits would be taxed at around 40% in the US, but they funnel them to Ireland (the famous "Double Irish") and pay 0% on them. What they do pay is made up of sales tax, employment taxes, and tax on things like property that they can't pretend does not exist in any taxable jurisdiction.
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Which is the amount they couldn't find a way to avoid. Their profits would be taxed at around 40% in the US, but they funnel them to Ireland (the famous "Double Irish") and pay 0% on them. What they do pay is made up of sales tax, employment taxes, and tax on things like property that they can't pretend does not exist in any taxable jurisdiction.
This is somewhat misleading. The US is special in that its the only country that actually taxes income that isn't even earned in the country. Most countries will tax someone on the income generated in the country, but not tax income generated outside the country. That includes both corporations and *people*. If you are a US citizen and you go outside the country and earn income, you're required to pay US income tax on that income, even though it was earned entirely outside the country. To repeat: that'
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The indictment applies equally to all those other corporations as well. If you know of examples, make them public. But Apple - as the most profitable of the bunch - has a higher profile. Sorry if that affects their public relations. Walmart is hated for a lot of the stuff it does too. Is Target any better - possibly, but probably not by a lot. But Walmart gets all the 'biggest retailer in the world' publicity, so they bear the brunt of criticism of what all the 'biggest retailers' do.
No companies shou
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Just for people who are incapable of actually putting their arguments of facts, here are the numbers: Net Income is 18,024 and the Taxes payed are 3,869. This turns out to be 21.4%. This is not no taxes, even if the actual figure is rather low.
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I've looked at the filing. As another poster pointed out, 26% of nothing is nothing.
What is the dollar amount of tax paid? Give me an actual number.
Potato
Good job! (Score:5, Funny)
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You couldn't have possibly meant sarcasm </sarcasm>
(trollface) :-D
Re: Good job! (Score:5, Insightful)
It is hard to know what to think (Score:4, Interesting)
It feels strange that Apple is making such a profit with a rather smallish that may be 12% of the market and no particularly eye-popping new products since the Steve Jobs era, just a series of well-engineered refinements.
Then again, certain shoe and apparel companies do this and have done this for decades. Seems odd to see this in technology sector that historically has been very market-share, volume and dominance oriented. However historically, this was the method employed since the early days of Apple (premium pricing).
Re:It is hard to know what to think (Score:4, Interesting)
It feels strange that Apple is making such a profit with a rather smallish that may be 12% of the market and no particularly eye-popping new products since the Steve Jobs era, just a series of well-engineered refinements.
I think you underestimate the "eye-popping" value of the 6 Plus screen size among consumers. I've owned every new iPhone since the 3GS and despite waiting a couple of months after the release date, still had a backorder time of 6 weeks when I ordered a 6 Plus. That hasn't happened for any other model.
It may not have been an eye-popping change in absolute technology terms or geek credibility, but what would be and would consumers care? There's too many constraints on size and battery life for more much more than incrementalism.
Plus I think all smartphone vendors want to maintain the current niche paradigm for these devices -- the consumer understands the "role" of the smartphone in their larger electronics ecosystem.
I think it will take someone willing to gamble on the idea of a dockable phone that can be used with KVM as a PC and/or tetherable to a "screen only" tablet to really shift the paradigm a lot. Apple could do it since they control the whole ecosystem but likely want to protect their product segments from sales loss, x86 is too power hungry and Windows failed on RISC and with Metro.
Google seems likely since they aren't specifically tied to given CPU and so much of Chrome is web-focused. Maybe Project Ara is sort of the start of this to sort out the modularity aspect so that you can assemble an Android/Chome system from parts or dock components with other components.
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Re:It is hard to know what to think (Score:4, Informative)
Maybe you should bother to look so you don't sound like you're an idiot.
Revenues from hardware - $69.8B
Revenues from other(iTunes) - $4.8B
Net profits (not broken down) - $18B
Even if 100% of revenues from iTunes was profit (i.e. no cost to run the App Store), it's still less than 1/3 of total profits.
Taxes (Score:5, Funny)
And they paid $12 in taxes.
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Re:18B on 75B (Score:5, Insightful)
Who runs on 4% margins that has any choice at all in it? There's nothing more moral or good business about razor thin margins. If you run at single digit margins you have absolutely no ability to invest in development.
Yes, they could still make more profit then anyone else -- because everyone else is putting out crap that isn't profitable, sustainable or with the economics of scale factoring into production.
That last bit is important. Samsung can match it, but they do so by making many products and they're suffering a lot lately on making money via that strategy. They're keeping share, absolutely, but making money is waning.
Apple margins are high relative to its bottom-feeding competitors partly because they are leveraging scale. They make very big deals over long terms, invest in suppliers and buy out supplies for years (Yes, at a premium rate, someone's going to mention the sapphire plant that went bust: they signed onto a deal they couldn't execute and you blame Apple? Please.)
As to the comment on taxes, I don't know what it means but it makes me think you don't know how taxes work.
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There's nothing more moral or good business about razor thin margins.
Nope, but they mean that the "free markets" work... anything other than razor thin margins signal that there's a disturbance in the market -- either actors don't have all the information they need, or something is preventing competition -- that allows for profit to emrge. Which is one way to say that good business is all about preventing the free markets from working!
Re:18B on 75B (Score:5, Insightful)
Not necessarily. The market rewards companies that demonstrate an ability to outproduce or out-innovate their competitors. I'm not arguing that's necessarily the case with Apple, but a company that reaps large profits doesn't necessarily indicate a broken system.
In my opinion, the best indication of a broken market is a company whose customers hate their guts yet still manage to reap huge profits. That's an indication that legitimate competitors are somehow being kept out of the market, either because of leverage/buyouts, artificial monopolies, cartels, or whatever. Capitalism is a pretty decent economic system compared to the alternatives, but anyone who thinks it's infallible isn't paying attention.
The people that buy Apple products tend to like them, enjoy using them, and regularly upgrade their products with new purchases. Whatever faults Apple has, it's hard to argue that their success is completely illegitimate.
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per Wikinvest (Score:5, Informative)
Amazon: .1% operating margin.
Apple: 29.3% operating margin.
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That is 24%. That means your device could be 20% cheaper and they would STILL make more money then anybody else in percentage per product in the electronics world. So instead of 500USD for the Ipad2, you could be paying 400USD and they would still make money. And some people don't think Apple is overpriced.
Don't worry, you can buy a $500 phone from my non-profit, $400 will be my for salary and $100 for a junk Android phone. Profit is an indication that you're delivering more value relative to cost than the competition, after all sales price is just a number you decide. They're not competing against some imaginary non-profit, the day Google, Microsoft etc. deliver a competing product forcing them to lower prices they will. Until then, keep blaming the one delivering what people want and not the ones who don't.
Re:18B on 75B (Score:5, Interesting)
Look, someone compares market wants to religion. Again. Because they can't fathom that people decide to buy things with reason and knowledge behind their choices.
No. It *has* to be the Cult of Apple, nothing else explains why someone makes a different choice from you.
The funny thing is, you say we're the religious ones. Your faith fails to work as you want and predict the reality you experience, so we're the cultists. Its us who are irrational, not you who say things should be different from how things are.
Good luck with that.
Re: 18B on 75B (Score:5, Insightful)
I am sure some people think software developers are overpriced, but I am not going to walk into my managers office and tell him to give me a pay cut.
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And some people don't think Apple is overpriced.
74 million phone buyers, 21 million tablet buyers, and 5.5 million computer buyers didn't think Apple products are overpriced. By definition, if you pay the money for a product willingly (not under duress) then it isn't overpriced.
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Compare that to Microsoft's at 61.71%, IBM's 53.34%, Blackberry's 51.70%, and Red Hat at an eye watering 84.35%.
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That means your device could be 20% cheaper.
Since when companies charge for making cost + x% margin? That's not the way prices are set. A product is sold at the price it can be sold - the higher the better. Many entrepreneurs are still making huge profit selling stuff 10~100x what it costs in China. Apple could sell 20% cheaper - but why would they do that? They can barely answer the huge demand of iPhones worldwide.
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It may be 24% on average, but it's much higher on some items. Flash memory upgrades for phone and tablets cost 10-15x what other manufacturers charge, for example, let along what they cost Apple.
Their products seem to be needlessly expensive too. I have a OnePlus One. It's faster, it's got more memory, a better screen and is built at least as well if not better than an iPhone 6, yet costs about 1/3rd as much. If Apple is only making 24% on their phones they must be making the cases out of gold pressed latin
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With the mac book pros they took a lesson from netbooks and tablets, mass produce a one-size-fits-all model that you can't modify or upgrade. (minor spec differences at buy time, but that's it).
Its competition is somewhat the Surface Pro series.
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I think some of what you write is exactly what is wrong with the PC industry. There is more to quality that the amount of RAM or disk space, there is also the quality of the components. Don't get me wrong, Lenovo uses pretty good hardware for the most part, but there is a reason Apple crushes everyone else on consumer satisfaction, hardware failure rates, and DOA rates every year in Consumer Reports. The last numbers I recall, Apple scored 86 versus Lenovos 63 out of 100 for overall laptop quality.
The prob
yeah.... (Score:5, Funny)
And all this without Jobs (Score:5, Insightful)
It just goes to prove no one is irreplaceable; not even Jobs.
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Headline is flat out wrong (Score:5, Interesting)
The highest by any publicly traded company, you mean. I'm pretty sure Saudi Aramco is at the top with annual profits estimated at a whooping $182 billion [nationalsecurityzone.org]. Where else do you think the terrorists and the Bush family keep getting all that money from?
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The highest by any publicly traded company, you mean.
Well, yeah. Private companies don't tell you how much they make.
Asian success was not unexpected (Score:5, Interesting)
Now, the iPhone 6 Plus is (very visibly in the metro) stealing customers back from the Android camp, often these are switching back buyers.
I did ask a few colleagues about their switch back, the general opinion is that while they needed to unlearn a few Android habits, they thought that the Apple gear worked very well, and (ALWAYS a factor mentioned by the lady colleagues) they thought that the iphone was simply a beautiful, elegant device.
I upgraded 2 months ago from a 4S to the 6 Plus myself. I am not so impressed by hateful online arguments (nor do I have a problem with Android phones), and it must be said that it works indeed very smoothly. It is still just about portable and the comfort has made me almost abandon my old ipad (between the 6Plus, and the small MAcbook Air the ipad sits now a bit uncomfortably). Also, the camera is remarakable. Without doing scientific tests, I have the impression that the general image quality is akin to my old Nikon D200 (without the nice bokeh of course), the pictures are more than good enough for most casual uses.
And yet. (Score:2)
It's a quarterly profit announcement, not for the year.
So the real questions are what is the declared profit / loss for the entire year and how much actual tax are they actually paying on the year?
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Couldn't you Google that information in the same amount of time it took you to type the question?
Nope. I did in fact google it and all I saw quickly are quarterly report information results.
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Also what is in their annual report isn't necessarily accurate anyway, so don't just throw that link at me.
Apple wasn't even reporting its U.S. taxes accurately, either, the Senate subcommittee found. Its annual report disclosed it paid much higher U.S. taxes than it actually paid to the IRS. To investors, Apple said it paid $6.9 billion in U.S. taxes in 2011. But it actually only paid the IRS $2.5 billion, according to its tax return.
Read more: http://www.businessinsider.com... [businessinsider.com]
Slave Labour is certainly profitable (Score:5, Insightful)
$18 billion profit, but they can't afford to make their phones in a country with decent labour laws. Nope, can't do it. The numbers just don't add up I tell you. Apple are the apotheosis of psychopathic corporate greed, at the expense of any human decency.
Re:Slave Labour is certainly profitable (Score:5, Insightful)
Are you setting a positive example for this world like you promised?
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I was going to say that the Mac Pro is manufactured in the US, but then I saw that you asked for decent labor laws.
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I'm using a PC, it was assembled in the UK, but as you point out, the components were surely made in the far East.
So what? Is your point that because we all use computers, and wear clothes that were made by workers in terrible conditions, that it is wrong to criticise those conditions?
I never said Apple were the only company that does this, but they are the biggest, and they have the largest gulf between their polished, doing-good-for-all image, and the reality.
use it to fix itunes (Score:5, Insightful)
Why is this flamebait? (Score:3)
Seriously, why is this guy's comment flamebait? Apple does this. They move billions of euros through Ireland to avoid paying any taxes.
I find it curious that so many Slashdoters have no problem when a company uses all the advantages of society and yet refuses to contribute to keeping the society going. In this case, literally racking in billions upon billions in profit while barely contributing to the tax base.
Why do you think this is a good thing?
I work for a small company. We have only about 80 people. So
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you have a partially valid point, however apple don't pay anyone any tax (at least nothing of significance), e.g you have countries like Australia where apple did 27 billion in revenue and paid tax of less than 200 million, this is repeated in countries all around the world. china is probably doing the best out of them compared to most countries as at least they get a shit load of low paid jobs from putting there shit together. It is a result of poor ethics from apple and broken tax laws.
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Re:Tax (Score:5, Informative)
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Oh, for...
A corporate tax filing reports corporate taxes, not "income taxes paid by employees".
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Company tax is not based on revenue, it is based on profits.
And yet, all personal income taxes are based on revenue.
Sure, you might have some deductions from income, but unlike a business, you can't subtract all the money you paid for food, housing, and paying your "employees" (like babysitters, taxi drivers, etc.).
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It's not some dodgy set up like Amazon, which has huge turnover but genuinely makes losses and so pays minimal or no tax. (Which in any other industry would mean it was bankrupt).
Re:Tax (Score:5, Insightful)
Company tax is not based on revenue, it is based on profits.
That's only income tax. There are sales taxes, VAT, tariffs, use taxes, port fees, gas taxes, etc.
Re:Tax (Score:5, Insightful)
because it trades on the US market, mayhap?
Simple rule: if you trade on the floor, you pay the fucking rent.
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Apple operates primarily in the US. .
Really? the majority of their manufacturing is in china. China and other international markets are now also there biggest revenue source. For tax purposes they are a irish company. If anything the US should now be seeing the smallest part of the tax they "should" be paying. The general tax rule is you pay the tax in the country you earn it, only the US considers earnings outside of the country to have a tax burden as well. regardless Apple and many other internationals don't pay their fair share anywhere. I
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China and other international markets are now also there biggest revenue source.
Then why was Americas revenue listed as ~$30B and Greater China revenue listed as ~$16B?
If you read the quarterly announcement, you'll see that international sales made up 65% of revenue. "China and other international markets" is in fact a larger proportion (by revenue) than the US.
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Yeah, they should, like, disrupt themselves and adopt a paradigm shift to a leaner, more agile model.
Rand Paul for ScrumMaster 2016!
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The problem is that humans aren't actually that far beyond sheep.
We are ruled by pretty much the same instincts.
It's just that we have different ways to use those pretty much same instincts.
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Re:inflation embiggens numbers (Score:5, Informative)
No, this is really an absurd profit, Standard Oil's net profit from 1882 to 1906 was $838,783,800 equal to roughly $22B today, so on an inflation adjusted basis Apple's quarterly profit was nearly equal to the majority of the lifetime profits of one of the classic robber baron trusts.
Re:inflation embiggens numbers (Score:4, Informative)
No, this is really an absurd profit, Standard Oil's net profit from 1882 to 1906 was $838,783,800 equal to roughly $22B today, so on an inflation adjusted basis Apple's quarterly profit was nearly equal to the majority of the lifetime profits of one of the classic robber baron trusts.
The U.S. population in 1906 was 85,450,000 [demographia.com] compared to 2014's population of 322,583,006 [worldometers.info]. Apple is definitively a world wide, global corporation. Did Standard Oil reach as far.
Sorry, but you don't have much of a comparison here.
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Re:inflation embiggens numbers (Score:5, Insightful)
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Tax is not ethical. Legally avoiding it is not unethical.
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Re: iCult (Score:2)
So now a "cult" is half of US smart phone buyers?
What does that make Linux users then?
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So now a "cult" is half of US smart phone buyers?
The people screaming that kind of nonsense are those who see how successful Apple is, who _should_ see why Apple is so successful (because there is no secret about this), and even though everything that Apple does to get that success is totally out in the open, they just don't get it.
So because they just can't figure out why a rational person would buy an Apple product, they come with their ridiculous interpretations that there must be a "cult", or that people must be "sheep", or that an iPhone is "fashi
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half of US smart phone buyers
But only 12% worldwide. Android rules the rest of the planet.
Re: iCult (Score:2)
That still doesn't answe the questiom, does half of the US constitute a "cult"?
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Let's see what the dictionary says...
Cult: a misplaced or excessive admiration for a particular person or thing.
No further questions, your honor. ;)
Re: iCult (Score:2)
So does anyone who buys a product from a company that sells product at a high margin have an "excessive admiration" for that product? What do you think the marginal cost of a copy of Windows is? Does that mean every Windows user belongs to a cult?
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It's not the price, it's just that I really can't stand iOS. And this from a long-time Mac fan, but when it comes to mobile, I'm with the Android cult.
Re: iCult (Score:2)
So in other words there is no basis in reality that Apple's customers are a "cult"....
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If I find where they sell sense of humor, I will buy you some.
Re: to apple fan boys (Score:5, Insightful)
If they were "overcharging", they wouldn't be selling as many. Amazing how the free market works isn't it?
Re: to apple fan boys (Score:4, Insightful)
So half of all smart phone buyers in the US constitute a "small niche"?
Re: to apple fan boys (Score:2)
"Words Mean Things". By whose definition is "niche" - half of the relevant population?
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If they've litigated away their competitors, why do their competitors have most of the market share by volume?
Re:to apple fan boys (Score:5, Insightful)
When did "I win because I got ripped off the most!" become a sane argument?? By all means, be happy the company is stable and will stick around to make more devices for you or will money to invest in future devices but for goodness sakes, people, stop being proud that you're being ripped off!?
The tortoise lays on its back (Score:2)
"The tortoise lays on its back, its belly baking in the hot sun, beating its legs trying to turn itself over, but it can't. Not without your help. But you're not helping. "
Why aren't you helping?
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25% mark up for an OEM is pretty envious, especially in the electronic market where usual retail markup is less than 10%!
And that argument conveniently sidesteps the fact that apple make no claims to operate on lower profit margins. Running on 10% margin means that the company you buy from can not do as much R&D and can not provide the level of support or absorb things like the Nvidia GPU disaster on the MacBooks from a few years back (offering people replacement/repaired hardware well beyond the wa
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Are you really that stupid, or do you just play a moron on the internet? http://investor.apple.com/divi... [apple.com]