^^^^^ And the irony of all this? Google engineers get paid more than Apple's! That surprised me when Apple could very easily take 1 billion of their 140 billion cash reserve and split it up to add a sizable chunk to many of their peoples paychecks.
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Apple loses US Marketshare at expense of Windows & Android
- Thread starter damitssam
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LOL, is this a joke?
I'm not asking for proof that Apple makes a profit in their devices. NEWSFLASH: businesses are out to make a profit!
I'm asking how it's any different than other manufacturers when they sell premium products? They're "premium" for a reason. S3, Note 2, One X, those are premium devices with high margins as well.
I'm sorry if it makes you upset that Apple simply sells more of them but you must be naive if you think other manufacturers have suddenly become non-profit NGOs.
The only thing I would fault Apple with is how high their prices are on old and outdated tech, such as the iPhone 4. It's way overpriced off-subsidy especially when compared to other phones selling for similar. Same goes for all their old stuff like the 2010 Mac Pro...
But I'd never fault a company for maximizing profit as they can as long as it's done honestly and ethically. That's what they do. That's what any company does. How else would they stay in business otherwise?
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Maybe that's why they work so slow.
Honestly, with all those programmers and developers, sometimes I don't see where a year went in an iOS update.
http://economictimes.indiatimes.com...phone-expense-survey/articleshow/19344725.cms
Beginning of the end for apple?
ComScore says different.
http://www.engadget.com/2013/04/04/comscore-february-2013/
Maybe that's why they work so slow.
Honestly, with all those programmers and developers, sometimes I don't see where a year went in an iOS update.
I agree only vis à vis the move from iOS 5 to 6. However, past upgrades (iOS 1 to 2, 2 to 3 and so on) did bring considerable changes to iOS, iOS 4 to 5 especially comes to mind.
Can't comment on salaries though. I don't have numbers that compare average salaries at Apple versus others.
I think a lot of people sort of woke up when ios 6 released and was basically the same thing with nothing that really improved the user experience.
Previous updates brought relevant features atleast.
I never said that businesses don't did I? No....
No they don't. Samsung devices are 15% +/- which is what you'd expect, even on there premium devices. Can you honestly say a huge note 2 with bigger screen, bigger battery, NFC, SD card slot, waccom digitizer, stylus, etc etc is CHEAPER to manufacture then an iPhone 5?
I never said that did I? Why do you feel compelled to put words in my mouth?
There old tech is less expensive then there new tech? So essentially you are saying the same thing I'm trying to dumb down for you.
Here is what I said....
Try reading bud...
That's how it sounded to me.
Could be if they are using mass-produced common parts instead of custom ones specifically tailored to a specific device. And where are you getting these 50% and 15% figures anyway? Are you simply taking price - cost of components? What about other overhead costs such as R&D, investing in green-energy and new manufacturing processes, marketing, wages, infrastructure, transport, brick and mortar stores, etc.? Your calculations are flawed. There's more to the cost of a device than components alone.
And again, it's their right. If Samsung did the same and sold their stuff the same way, they too would have every right as long as it's done ethically and honestly. And between Apple and their competition, I personally find Apple to be far more ethical and honest in every respect with regards to the environment and corporate responsibility, especially since every media outlet and critic's focus seems to only be on them and because they are making an honest effort to rectify these issues. Meanwhile, their competitors are given a free pass to commit far worse without any attention whatsoever.
I'd easily be willing to pay more to a socially responsible company than one that was less.
But going back to profit. You don't succeed in business by operating with razor thin margins. You succeed by differentiating yourself (branding, quality, customer service, etc.) enough to sell your stuff at a premium. That's why companies like HP, Dell (the top 2 in PC market share) almost went under saturating the market with cheap, flimsy notebooks while Apple thrived on its measly 5-10% PC market share, and that's why they're following (or trying to) the Apple model today with their "ultrabooks".
Same goes for Samsung when it comes to phones. It's the only manufacturer other than Apple that is succeeding and it's primarly because they have successfully emulated Apple's strategy of differentiating themselves from the rest, while the rest struggle financially to break even.
You were objecting to Apple's massive profits.
No I'm not. I have no problem with the fact that Apple profits on their older, outdated tech. I just personally think they're overpriced for what they are and that their prices are high when compared to similarly priced phones. This is an opinion.
On the other hand, Apple is still well within its right to sell at whatever price the market is willing to pay, just like any company does. When demand slows, prices will drop. If Samsung and others didn't have such short product life cycles, believe me they'd do exactly the same. Their products only depreciate faster because of the intense competition in the Android space + the ridiculous number of handsets they churn out every year, which practically kills demand for anything older than 6 months.
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Let me stop you.
R&D, wages, etc doesn't come from profit. Profit is after everything is paid for. You might be saying that if so I'm not trying to correct you there.
That chart I posted is material AND manufacturing cost.
How do you think Apple sells less phones then Samsung but makes more profit? Not exactly a trick question. In 2009 total manufacturing cost of the iPhone was 159 dollars (I can't find any other years). Even after shipping, accounting for warranty returns, running/operating Apple stores, paying software engineers to write iOS (can't include the app store, iTunes and the like because they are their own source of revenue), profit was still well above 50%.
Most profitable industry in 2009 was network and communication with 20% profit % to revenue according to CNN/Fortune 500. However Apple is categorized in computer/office equipment which averaged 4.9%. These are fortune 500 companies, I'd hardly call their profit "measly".
So you have high profits or high volume, either is fine by me I could careless. But that leads us back to where we started. A much larger percentage of your money when buying an Apple product goes to profit. The more popular and in demand it is the more profit they tack on like I brought up with the iPhone vs iPad cost unsubsidized.
I would love to have a Mac but I can't justify the price. Its not that I can't afford one its just I compare specs and features and don't buy just brand names. My gf is on her 3rd iMac because it keeps breaking. Which reading on this forum is not uncommon with iMacs. The redeeming quality is the excellent customer service Apple has offered. That said, enough profit and you can afford to replace equipment with little hassle.
I think Apple is perceived as "high quality" brand. It has not been relegated to "consumer" brand yet. Just like luxury goods market, sales is not based on "specs" (or production cost) but more of the brand name. Heck many are still buying luxury perfume for $100 but cost $2 to make.
Apple kind of reminds me of Sony. At one time put a Sony name on a TV and it will sell at premium price no matter what kind of specs is inside. But consumers have become more discerning and value conscious. That's why Samsung was able to kill Sony off by offering same product with higher specs but as good a quality and at a lower price. I see Samsung using the same strategy with smartphones. Given the metaphoric rise of the Galaxy phones, I think Samsung is doing another Sony on Apple.
No, I'm saying these are also COSTS that do not figure on your chart.
cynics said:
I already explained to you why. Apple sells far more iPhones than Samsung sells premium phones (S3, Note 2). Only a fraction of Samsung's total sales are from devices that bring in a good profit. For every S3 or Note 2 they sell for example, they may sell 10 if not more cheap phones (galaxy ace, s3 mini, feature phones... here are all of the phones they currently make and they've already announced 3 new cheap phones aimed at the chinese market) that have razor thin margins if any and are only aimed at capturing market share. Most of their sales are from these cheap devices. The S3 and Note 2, their premium phones, are only a small percentage of their total sales.
This is how Samsung premium devices sell compared to iPhone and explains the gap in profit.
cynics said:
There are always lemons with electronics. For every iMac that dies, there's one that still works 10 years later. There is a higher incidence with the iMacs made from 2009-2011 due to (what I think are) bad thermals, but again, this is the exception not the rule.
But overall, the quality of the build is far superior with a Mac than a PC. If you ever have a look inside a Macbook Pro or an iMac, you'll see that every part was custom made to fit the chassis, instead of standardized parts that just wouldn't fit into that form factor. That's a much more expensive design and manufacturing process than, for example, just assembling a bunch of standard parts together in some random fashion and then build a brick of a chassis around them..
Of course a Mac is still expensive. But the quality of the build, the form factor, the customer service, how silent it runs, its stability, higher resell value, bundled software differentiates them enough from the competition to justify the premium pricing. Apple's strategy with computers has always been to make money on the hardware and subsidize or give away the software.
Other PC manufacturers did it the other way around (make money on the software and sell for cheap) and learned the hard way when they almost went bankrupt due to making very little profit despite their massive sales and market shares. That's why they're trying to turn things around by doing it like Apple and going after the premium market with their ultrabooks.
While you're not entirely incorrect when it comes to TVs, the same could not be said for the phone space. Samsung is succeeding because they're also trying to be perceived as a quality brand. Most of the profits they rake in from phone sales are for their "premium" phones.
While it's true that the multitude of cheap phones they make help capture a lot of market share, the majority of their profits are still coming from their premium line of phones alone. Without them, they wouldn't be making much profit at all.
See my response to Cynics above.
That's why Samsung was able to kill
Sony off by offering same product with
higher specs but as good a quality
and at a lower price
when I said this I am referring to Samsung premium range. Samsung sold lots more of galaxy phones in 2012 than 2011. in 2013 everyone is predicting another big jump.
Again, I disagree. What happened with TVs is that the tech matured and reached a plateau, so premium manufacturers like Sony were indistinguishable from others that were selling at lower prices. There was no reason to plop so much money down on a Sony TV when the Samsung TV is essentially the same thing but cheaper. Watch a movie on a brand new Sony or Samsung TV, the experience is similar. The only distinguishing feature is the UI but UI is not that important when it comes to TVs. Specs alone is what counts.
Also, one doesn't upgrade a TV that often. Unless some revolutionary new feature comes along (they tried and failed with 3D), people will keep their TVs for many years before upgrading again.
Phones are different in that it's not about specs alone. It's the whole package: the UI, the build quality, customer service, etc. Phones are more like computers. Walk into any computer store and you'll see hundreds of laptops all touting similar specs: Core i5 or i7, HD 4000, 8gb of ram, so on and so forth, and competing solely on price. They're all the same spec wise, so how does a manufacturer succeed? No, not with the lowest prices. It's this battle to the price bottom that almost killed the PC industry because they couldn't make any profit as a result.
Build quality, battery life, UI... i.e. the whole package. That's where they must focus. That's why Apple leads in profits in the computer industry, and why other manufacturers have decided they must do the same: go premium or go broke.
Problem is, since they're all running the same OS, there's still no distinguishing one PC manufacturer from an another in that regards, so they're going to end up competing over price all over again.
In that regards, Samsung isn't even trying to compete on price. Yes, they have a ton of phones they make that are cheap, but those bring in almost no profit and are designed to simply capture market share. It's their premium line of phones that bring in most of the cake. And those phones aren't any less expensive than iPhone. (at first, see below)
I don't think Apple is in any immediate danger from Samsung. If anything, they will fight for the #1 spot for years to come. Samsung will always have the advantage marketshare-wise due to their massive fleet of cheap handsets, but profit-wise Apple will always be king. Why? Due to heavy competition in the Android space. Samsung prices depreciate a lot faster so they can't profit on their new releases as much as Apple does. If Samsung could have it their way, they'd never cut prices till their new phone comes out, but at the present time they simply cannot.
Maybe that's why Samsung is trying to distance itself from Android... They know that heavy competition in the Android space (like the PC industry) is just another race to the bottom and nobody wins in that race, so they do not even want to be a part of it. But until Samsung succeeds in doing so, they will still be forced to lower their prices sooner and cut margins faster than Apple does.