Apple takes 92% of smartphone market profits on just 20% of sales

[mr moose]

Fixed. That might seem like a small change, but it's very important to note. Apple's real strength is marketing.

 

Except that my statement applies to all products not just apple.  If you think a company only makes money because majority of its consumers are ignorant then I am afraid you are very mistaken.   There will always be a small percentage of a companies customers that are ignorant and buy for the wrong reasons, but to assume that majority do is simply erroneous.

 

Not too sure what I mean?  A products survival depends on it's products meeting the standards of it's marketing. Marketing alone will not keep a shit product selling, the average consumer isn't that stupid. Therefore unless a product is actually built to a standard that justifies the price it will not continue to sell.  

[Kurosaki Isshin]

-snip-

 

you buy for consistency, which is respectable. but some people just buy beats heaphones; this I will never understand. but hey, to each their own.

 

 

Except that my statement applies to all products not just apple.  If you think a company only makes money because majority of its consumers are ignorant then I am afraid you are very mistaken.   There will always be a small percentage of a companies customers that are ignorant and buy for the wrong reasons, but to assume that majority do is simply erroneous.

 

Not too sure what I mean?  A products survival depends on it's products meeting the standards of it's marketing. Marketing alone will not keep a shit product selling, the average consumer isn't that stupid. Therefore unless a product is actually built to a standard that justifies the price it will not continue to sell.  

idk man, beats headphones aren't that impressive

[79wjd]

you buy for consistency, which is respectable. but some people just buy beats heaphones; this I will never understand. but hey, to each their own.

 

 

idk man, beats headphones aren't that impressive

Except they do have a VERY strong bass -- stronger than most headphones. It may not be a refined bass, but a LOT of people enjoy that strong punchy bass -- myself included (however while I like a nice strong bass I don't want to listen to just the bass track).

[mr moose]

you buy for consistency, which is respectable. but some people just buy beats heaphones; this I will never understand. but hey, to each their own.

 

 

idk man, beats headphones aren't that impressive

 

They're not, but you are comparing a personal single use boutique fashion product to a multi-functional piece of technology that has more than just subjective points of failure.

E.I you won't see beats or sol republik headphones in a studio, but many companies will use iphones in their fleet of company phones.  Many managers and small business owners use iphones, In fact there are many surveys the show professionals (managers and directors) are more likely to own an iphone.  If the iphone was a piece of crap that required repairs all the time, was slow or crashy or simply couldn't do what users needed it would have stopped selling in this field by now, especially if there was a better option on the market cheaper.

[cesrai]

They're not, but you are comparing a personal single use boutique fashion product to a multi-functional piece of technology that has more than just subjective points of failure.

E.I you won't see beats or sol republik headphones in a studio, but many companies will use iphones in their fleet of company phones.  Many managers and small business owners use iphones, In fact there are many surveys the show professionals (managers and directors) are more likely to own an iphone.  If the iphone was a piece of crap that required repairs all the time, was slow or crashy or simply couldn't do what users needed it would have stopped selling in this field by now, especially if there was a better option on the market cheaper.

but but but iSheeps and ........

[patrickjp93]

you buy for consistency, which is respectable. but some people just buy beats heaphones; this I will never understand. but hey, to each their own.

 

 

idk man, beats headphones aren't that impressive

Beats can burn. The lowest I let myself fall (due to college student budget) for heaphones was a pair of Logitech G230, and back home my family exclusively uses Sennheiser. For gaming I use the PC 363D. For high-definition music and videos I use the HD 700.

[patrickjp93]

but but but iSheeps and ........

There's something to be said for the philosophy of Steve Jobs shining through. Everything must be perfect and overbuilt for function before form. Unfortunately we now have the race to paper thinness getting in the way of that, but still.

[rambi36]

I don't see a reason to argue on a topic like this. Apple's products are way more expensive than how much it actually costs to make them so it's not really a surprise. Nuff said

[patrickjp93]

I don't see a reason to argue on a topic like this. Apple's products are way more expensive than how much it actually costs to make them so it's not really a surprise. Nuff said

Of course, so are any phones really. And CPUs, GPUs, and tons of other things. If there was no profit, there'd be no business.

[RagnarokDel]

Average iphone price 650$ in 2013

Average android price 441$ in 2013

[patrickjp93]

Average iphone price 650$ in 2013

Average android price 441$ in 2013

Where the Hell do these numbers come from? I just bought the middle of the road iPhone 6 and it was 399 for the 64GB storage option. I don't remotely believe your iPhone numbers.

[kuddlesworth9419]

Wait, let me get this straight....the reason other companies are doing badly is because Apple charges too much...

 

I must be missing something. 

Like $170 profit

 

And because they can -- it's downright stupid to sell something for less if you don't have to. 

No but if a person buys an Apple product they won't go and buy another different one. They have no more money to spend on another device. I would say it's difficult for other companies to be competitive with Apple because they can charge so much for their products when other companies have to have smaller margins and aim their products to make less money because of Apple.

[kuddlesworth9419]

i currently run the ios 9 beta and thats more stable than android

 

 

whoa there calm down no need to ignore him....jeez

 

btw butt hurt much....

 

dont bother replying i already had you on my ignore list months ago....

 

 

spoken like a person that dosnt understand capitalism 

Who does.

[mr moose]

No but if a person buys an Apple product they won't go and buy another different one. They have no more money to spend on another device. I would say it's difficult for other companies to be competitive with Apple because they can charge so much for their products when other companies have to have smaller margins and aim their products to make less money because of Apple.

 

I don't know about you but I don't know many people who own two current top end phones.   The cost of an iphone has nothing to do with people not buying Android. It might help sell more given android is typically cheaper but certainly not hinder sales.

[kuddlesworth9419]

Capitalism operates on the microeconomic theory of two people: Adam Smith and John Nash (From "A Beautiful Mind"). Companies put prices of products at the point marginal cost of production = marginal profit of sale. This is the profit maximization point. That is universally true for any business in any market be it commodities or monopolistic competition such as in smartphones, tablets, GPUs, etc.. Profit stems from revenue. The profit maximization point is also the revenue maximization point. Revenue comes from the price, and the price is set according to a number of factors used to gauge how much the consumers are willing to pay. How consumers perceive a product is one of the big factors. Apple has a huge brand capital compared even to Intel. If you proved to consumers they'd get the same or better experience for a cheaper price, most of them would go with the alternative. The problem rests in how you intend to do that. Marketing enters here. Apple doesn't really market in my experience. I've never actually seen an Apple commercial, though I have seen plenty of Droid and Samsung Galaxy ads on TV and elsewhere. So perhaps Apple's success is best described as the incompetence of competition paired with consumers not doing their jobs of being differentiating. 

 

As for the profit margins, Apple designs its own chips, phones, and software; Apple has a large scale foundry produce the chips in such huge volume that the foundries compete to give the lowest price. Nvidia and AMD have no such luxury with TSMC since GloFo has historically sucked at GPUs and Intel is not generally an open foundry. Thus, Apple gets the best possible production deal = lower cost = higher margin = higher pricing potential (remember marginal cost vs. marginal profit and how that effects the end price). Apple also has a cheap labor force and a very large scale at their production centers in China through Foxconn. Since Apple's products fall under an economy of scale, bigger scale reduces costs and marginal costs. It's just raw microeconomics. There's nothing intricate or savage about it. Samsung has to deal with Google's royalties for Android, has to deal with its own fab R&D costs, has gotten ARM's vanilla core designs and built chips around them until now, and it doesn't command the same brand loyalty that Apple does. Its perceived quality is overall lower across the market. Thus it sells fewer units. So, not only are Samsung's costs higher, but it has consumer perception problems to deal with as well.

Still their margins are too high even if they do design and make most of their stuff. Which I am sure they don't. They don't make things like memory or their actual chips TSMC does all that. They are expected to be buying their chips from Samsung next. But yea I do understand where you are coming from it just makes me salty to see a company do better financially than it should. I have seen Apple ads before but I haven't in some time probably because they have transcended all money making laws and no longer need to. People will realise one day though and it will be magical.

[RagnarokDel]

Where the Hell do these numbers come from? I just bought the middle of the road iPhone 6 and it was 399 for the 64GB storage option. I don't remotely believe your iPhone numbers.

That's subsidized by your ISP usually with a 2 or 3 years contract. http://store.apple.com/ca/buy-iphone/iphone6

 

The source was this. http://bgr.com/2014/02/18/android-iphone-price-comparison/

[79wjd]

Still their margins are too high even if they do design and make most of their stuff. Which I am sure they don't. They don't make things like memory or their actual chips TSMC does all that. They are expected to be buying their chips from Samsung next. But yea I do understand where you are coming from it just makes me salty to see a company do better financially than it should. I have seen Apple ads before but I haven't in some time probably because they have transcended all money making laws and no longer need to. People will realise one day though and it will be magical.

You do realize that's not how economies work...a company can't do better than it should -- especially when it's in a market saturated by developed competition. 

 

I really hope people will come to this 'magical realization' you think needs to happen....I'd be perfectly okay with people jumping ship from buying Apple products, then maybe I could get my next Mac/iPhone for even less. 

[NateGSR117]

Dam, that is ridiculous. I would have never guess that one.

[AnkitJha]

Are Apple Employees paid the most compared to other comapnies......??

 

If not then where do they dump those billions $$$...

[mr moose]

Are Apple Employees paid the most compared to other comapnies......??

 

If not then where do they dump those billions $$$...

In the bank.

[patrickjp93]

Still their margins are too high even if they do design and make most of their stuff. Which I am sure they don't. They don't make things like memory or their actual chips TSMC does all that. They are expected to be buying their chips from Samsung next. But yea I do understand where you are coming from it just makes me salty to see a company do better financially than it should. I have seen Apple ads before but I haven't in some time probably because they have transcended all money making laws and no longer need to. People will realise one day though and it will be magical.

Says who? That's not something any individual should get to dictate external to the company. They don't make products any more expensive (in smartphones) than their competition. They are allowed to make the money they make unless they break antitrust law or other regulations. I said they design, and I should have specified assemble as well. And I specified they don't have the expenses associated with a foundry. Apple is allowed to make however much money they can while obeying the laws of countries they sell in and run parts of their business. If you want to talk about evil profit margins, IBM really takes the cake despite its much more narrow, targeted market.

[patrickjp93]

That's subsidized by your ISP usually with a 2 or 3 years contract. http://store.apple.com/ca/buy-iphone/iphone6

The source was this. http://bgr.com/2014/02/18/android-iphone-price-comparison/

And Android phones aren't subsidized the same way?

[79wjd]

And Android phones aren't subsidized the same way?

In the US they are (add in sales/deals you can get on Android phones the day after it's release and the iPhone is usually more expensive than the competition -- albeit the difference is like $100, which is nothing when you realize you're paying $2,000 for two years of service anyway). But US carriers are different then most of the world -- in most countries the carrier doesn't subsidize phone costs -- but service is also usually cheaper.

[Kurosaki Isshin]

They're not, but you are comparing a personal single use boutique fashion product to a multi-functional piece of technology.

 

I am not comparing the two.

 

Except that my statement applies to all products not just apple.

I was replying to this.

[79wjd]

Except they do have a VERY strong bass -- stronger than most headphones. It may not be a refined bass, but a LOT of people enjoy that strong punchy bass -- myself included (however while I like a nice strong bass I don't want to listen to just the bass track).

 

 

I am not comparing the two.

 

I was replying to this.