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View Full Version : Apple's iPhone business makes more money than the WHOLE OF MICROSOFT


0dev
Feb 4, 2012, 12:45 PM
Tech writer MG Siegler just noted a remarkable fact:

Apple's iPhone business alone is now bigger than Microsoft.

Not Windows. Not Office. Microsoft.

Think about that.

The iPhone did not exist five years ago. And now it's bigger than a company that, 15 years ago, was dragged into court and threatened with forcible break-up because it had amassed an unassailable and unthinkably profitable monopoly.

The iPhone also appears to be considerably more profitable than Microsoft.

In the December quarter, Apple's iPhone business generated $24.4 billion of revenue. Microsoft's whole company, meanwhile, from Windows to Office to servers to XBox, generated $20.9 billion.

If we assume that Apple generates the same operating profit margin on its iPhone business that it generates on its overall business--38%--the iPhone business generated about $9.3 billion of profit in the December quarter.

All of Microsoft, meanwhile, generated only $8.2 billion.

http://www.businessinsider.com/iphone-bigger-than-microsoft-2012-2

mrsir2009
Feb 4, 2012, 02:06 PM
Seems Microsoft's stranglehold on the tech world is loosening :)

Dagless
Feb 4, 2012, 03:44 PM
Seems Microsoft's stranglehold on the tech world is loosening :)

And another one is strengthening.

Hopefully we see a nice parity across the tech board, but that's never the case.

*LTD*
Feb 4, 2012, 03:49 PM
And another one is strengthening.

Better that than what was before, that's for sure. A real innovator who at least makes an effort (and who has redefined a number of markets for the better) is leading the industry now, and who has gotten to that position fairly.

Even if Apple eventually stagnates over time, I'd rather see a decade of Apple at their best than a decade of MS at their "best." The consumer will always do better, all else being equal, with a vertical business model.

Rodimus Prime
Feb 4, 2012, 03:52 PM
And another one is strengthening.

Hopefully we see a nice parity across the tech board, but that's never the case.

And apple is by far worse than Microsoft ever was. Mind you apple possible poor enterprise support and real road maps will prevent the from the enterprise market. In many ways Apple is not going head to head with Microsoft bread and butter.

*LTD*
Feb 4, 2012, 03:54 PM
And apple is by far worse than Microsoft ever was.

How?

(Remembering that Apple is not a convicted monopoly-abuser.)

And consumers seem to actually be *choosing* Apple gear, rather than choosing among the same things in an MS-dominated universal-licensing racket, that is, among "choiceless choices."

Rodimus Prime
Feb 4, 2012, 06:41 PM
How?

(Remembering that Apple is not a convicted monopoly-abuser.)

And consumers seem to actually be *choosing* Apple gear, rather than choosing among the same things in an MS-dominated universal-licensing racket, that is, among "choiceless choices."

examples of how?
How about many of Apple devices do not play nice with anything but Apple devices.

iTunes movies only play on Apple devices or on iTunes. Apple fairplay DRM same thing and the real reason Apple removed it was they could see the writing on the wall and that was they were risking losing in court in the future and it would of been a much larger blow.

You have the app store lock down and very strong rules. If you have in app billing at all you are REQUIRED to use apples system for a 30% cut which is nothing more than a credit card processor. No links to external sites or anything in the app.
No side loading of Apps.

Trying to sue for the name App store which thankfully the courts saw right threw it.

*LTD*
Feb 4, 2012, 06:46 PM
examples of how?
How about many of Apple devices do not play nice with anything but Apple devices.

iTunes movies only play on Apple devices or on iTunes. Apple fairplay DRM same thing and the real reason Apple removed it was they could see the writing on the wall and that was they were risking losing in court in the future and it would of been a much larger blow.

You have the app store lock down and very strong rules. If you have in app billing at all you are REQUIRED to use apples system for a 30% cut which is nothing more than a credit card processor. No links to external sites or anything in the app.
No side loading of Apps.

ALL of what you mentioned, is to Apple's credit, and is actually a positive for consumers.

Ergo:

http://mashable.com/2012/01/24/apple-quarter-by-the-numbers/

You have to *choose* to buy an Apple product. An unlicensed OS, locked to a limited number of devices, as part of a heavily-vetted ecosystem. And what do we want? More of it. Holy ****, our wallet's are opening already! See?

aristobrat
Feb 4, 2012, 07:03 PM
Gesh, it doesn't seem like so long ago Paul Thurrot was commenting on how while Apple made more revenue than Microsoft, Microsoft made more profit. Not so much anymore. :eek:

steve2112
Feb 4, 2012, 08:57 PM
How?

(Remembering that Apple is not a convicted monopoly-abuser.)



Not yet.

Rodimus Prime
Feb 5, 2012, 02:06 AM
ALL of what you mentioned, is to Apple's credit, and is actually a positive for consumers.

Ergo:

http://mashable.com/2012/01/24/apple-quarter-by-the-numbers/

You have to *choose* to buy an Apple product. An unlicensed OS, locked to a limited number of devices, as part of a heavily-vetted ecosystem. And what do we want? More of it. Holy ****, our wallet's are opening already! See?

I see you choose to pass over the fact. I already see you are doing your typical BS of posting profit from Apple. Not a valid argument here.

Lets see Apple system screws over anyone not Apple. The required to use Apple 30% cut for in App purchases was crap. It magically started being enforced right after Apple started prepping for their own streaming services and offering iBooks. WOO huge suprise there.

Also its lock in prevents other companies from entering the market or offering competing services. It puts a near to impossiblely high front loading cost to break in. This hurts consumers.
You have the insane Apple lock in that once you invest anything into the Apple eco system it pretty hard to break out as Apple only plays nice with Apple products.

But you LTD do not get the point. Instead you try your spin tricks to justify it. Heck your own so called arguments could be turned against you when you point to MS. MS did some dirty things in the past. Apple is doing plenty as well. Remember you had to CHOOSE to use MS windows, and you had to CHOOSE to use MS office. Apple is hurting competition not helping.

if you want other examples you have Apple string of law suits with it crapents.

AppleScruff1
Feb 5, 2012, 02:06 AM
The consumer will always do better, all else being equal, with a vertical business model.

Source?

Macman45
Feb 5, 2012, 02:17 AM
And another one is strengthening.

Hopefully we see a nice parity across the tech board, but that's never the case.

" If wishes were horses then beggars would ride " :D

eawmp1
Feb 5, 2012, 02:28 AM
"There's no chance that the iPhone is going to get any significant market share. No chance," said Ballmer. "It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get." -Steve Ballmer 4/2007

There is a lesson for Apple management here.

0dev
Feb 5, 2012, 03:35 AM
There is a lesson for Apple management here.

That it's fun to laugh at Monkey Boy Ballmer?

Yumunum
Feb 5, 2012, 03:43 AM
-Steve Ballmer 4/2007

There is a lesson for Apple management here.

I wish I would've seen that quote sooner... Hilarious!

ixodes
Feb 5, 2012, 03:46 AM
There's nothing surprising here. It's just business. No one stays on top forever, and nothing is more uncertain than fickle consumers. Apple fans should bask in their moment now. You never know what tomorrow will bring.

0dev
Feb 5, 2012, 05:45 AM
I wish I would've seen that quote sooner... Hilarious!

"By next Christmas, the iPod will be dead, finished, gone, kaput." -Alan Sugar, 2005 :rolleyes:

Sirolway
Feb 5, 2012, 05:57 AM
Even now, in business, you pretty much have to use Windows & MS Office. I'm not saying they're bad, but there's not really a lot of choice there.

iPhones may be swallowing all the profit in mobile phones, but there's plenty of choice to buy from - Android has the bulk of the market & even RIM, MS & others have very viable alternatives to the iPhone.

iPad similarly ish (ok, on rockier ground here). Apple has the lion's share of the market, but there are very viable alternatives - most obviously the Kindle Fire, but also a fair few models from Android etc.

I don't think anyone has yet managed to pull off what MS did with Windows & Office. I'm pretty glad about that, although I do admire Bill Gates & MS for achieving that in the first place.

As a final rant, I never could understand why educational systems (e.g. here in the UK) insisted on shelling out for Windows & Office. What a waste of money - I wish they'd done the German / Brazillian sort of thing & gone open source with Linux, OpenOffice etc. In the UK the IT (ICT, they call it) syllabus has recently been heavily slated for teaching a few powerpoint skills & not much else. Crazy.

The Raspberry Pi (a credit-card sized PC for about $25) might change all that with a little luck but probably only / first in private schools.

Anyway - back to the original point. I think MS still have a lock on business with Windows & Office in a way that no one else has in technology.

0dev
Feb 5, 2012, 06:05 AM
As a final rant, I never could understand why educational systems (e.g. here in the UK) insisted on shelling out for Windows & Office. What a waste of money - I wish they'd done the German / Brazillian sort of thing & gone open source with Linux, OpenOffice etc. In the UK the IT (ICT, they call it) syllabus has recently been heavily slated for teaching a few powerpoint skills & not much else. Crazy.

Couldn't agree more, IT education in the UK is a massive joke. I finished it a few years ago and the only thing it "taught" me was how to take screenshots of MS Office then write about what all the buttons do. Utter ********* waste of time. I spent most lessons playing games and posting on forums and I still got BBB. No wonder I get people asking me how to do things as simple as print documents when that's how the education system works, and it's equally as bad at teaching every other subject as well, I can tell you.

Dr McKay
Feb 5, 2012, 06:16 AM
I see you choose to pass over the fact. I already see you are doing your typical BS of posting profit from Apple. Not a valid argument here.

When will you learn that you cannot argue with LTD? His logic is either backwards or non-existent, he flips and changes his points and arguments at the drop of a hat and denies his previous ones, if you call him out on these he will just ignore you. And if you point out a colossal flaw in his argument or points, he'll just post an article about how Apple are making profits like it makes everything Sunshine Lollypops.

He will often just all-out lie, and when you ask his sources, will post something unrelated and insist that you "read between the lines". Just give up, you cannot win ;)

*LTD*
Feb 5, 2012, 06:20 AM
Source?

Source?? It's obvious. LOL look around. The sources are everywhere. For years now.

8th time:

http://www.macrumors.com/2011/09/20/apple-tops-u-s-pc-customer-satisfaction-survey-for-eighth-consecutive-time/

Been this way since it debuted:

http://www.bgr.com/2011/12/22/ipad-satisfaction-rate-at-84-according-to-new-survey/

6th time:

http://forums.macrumors.com/showthread.php?t=1225989

Is it any coincidence the best-selling smartphones all sport an Apple logo?

That's the strength of vertical integration done right. It creates an ecosystem that has no peer. This stuff doesn't happen by accident.

AppleScruff1
Feb 5, 2012, 10:31 AM
Source?? It's obvious. LOL look around. The sources are everywhere. For years now.

8th time:

http://www.macrumors.com/2011/09/20/apple-tops-u-s-pc-customer-satisfaction-survey-for-eighth-consecutive-time/

Been this way since it debuted:

http://www.bgr.com/2011/12/22/ipad-satisfaction-rate-at-84-according-to-new-survey/

6th time:

http://forums.macrumors.com/showthread.php?t=1225989

Is it any coincidence the best-selling smartphones all sport an Apple logo?

That's the strength of vertical integration done right. It creates an ecosystem that has no peer. This stuff doesn't happen by accident.

But that doesn't prove your statement. You stated it as a fact. It does not prove that vertical integration is always best for the consumer. Believe it or not, Apple isn't the only company on earth. I was giving a warning for trolling because I made a statement that I couldn't prove.

Rodimus Prime
Feb 5, 2012, 10:51 AM
-Steve Ballmer 4/2007

There is a lesson for Apple management here.

Just going to point out Apple did go to subsidies prices. The iPhone would never of gotten as big as it did if it was forced to stay at full price.

*LTD*
Feb 5, 2012, 10:59 AM
Just going to point out Apple did go to subsidies prices. The iPhone would never of gotten as big as it did if it was forced to stay at full price.

It wasn't just Ballmer. Nearly everyone in the industry - from Sanjay Jha to RIM's (former) half-CEOs thought June 2007 was all a big joke (for other reasons), and they wasted no time in their chest-thumping, declaring just that to the world. But those who understood Apple saw it for what it was. And the same thing happened in January 2010 with the iPad.

And here we are.

----------

But that doesn't prove your statement. You stated it as a fact. It does not prove that vertical integration is always best for the consumer. Believe it or not, Apple isn't the only company on earth. I was giving a warning for trolling because I made a statement that I couldn't prove.

No one says you have to accept my proof. Nor am I required to secure your unequivocal belief.

GenesisST
Feb 5, 2012, 02:35 PM
It wasn't just Ballmer. Nearly everyone in the industry - from Sanjay Jha to RIM's (former) half-CEOs thought June 2007 was all a big joke (for other reasons), and they wasted no time in their chest-thumping, declaring just that to the world. But those who understood Apple saw it for what it was. And the same thing happened in January 2010 with the iPad.

And here we are.[COLOR="#808080"]


I think that *LTD* and Rodimus Prime are both right (sorry haven't figured out how to multi-quote, both too busy with the kids and mostly too lazy).

iPhone would still have sold well, without subsidies. It just wouldn't have sold THIS well. What I find proof to that is that the 3GS is still being sold at 0$ in some cases, so subsidies do bring customers.

And yet the iPad is not a subsidized device (is it?) and still sells pretty "decently"...

danahn17
Feb 6, 2012, 05:41 PM
examples of how?
How about many of Apple devices do not play nice with anything but Apple devices.

iTunes movies only play on Apple devices or on iTunes. Apple fairplay DRM same thing and the real reason Apple removed it was they could see the writing on the wall and that was they were risking losing in court in the future and it would of been a much larger blow.

You have the app store lock down and very strong rules. If you have in app billing at all you are REQUIRED to use apples system for a 30% cut which is nothing more than a credit card processor. No links to external sites or anything in the app.
No side loading of Apps.

Trying to sue for the name App store which thankfully the courts saw right threw it.

Yup... If I buy an iPod or iPhone, I need to use iTunes to load music/pictures/buy apps, etc...

To me, it's not that different from when MS made its users use IE with Windows.

A Hebrew
Feb 6, 2012, 05:55 PM
Apple does everything possible for profit...I am surprised they haven't restricted apps on a Mac to the app store only...at least not yet...

benzslrpee
Feb 7, 2012, 09:52 PM
1. how is a 30% cut screwing over everyone? if developers are essential "vendors" providing goods and service through a retail channel, then they always have a choice of who to sell through. if developers can't survive with Apple's revenue share agreement then they simply won't sell via that channel. if enough developers move, then Apple will revisit the T&Cs and adjust the revenue share accordingly.

also look at it this way. the original app store rules were 70/30, developer/Apple. this type of revenue share is quite typical as the retail distribution channel offers a service of bringing customers directly to the product maker. a typical example can be grocery stores. Haagen Daz sells their wonderful ice cream for $7 a pint at Store X, upon a successful sale, Store X gets some percentage of the transaction because they provided the freezer to store it in, the electricity to keep it cool, the retail lease for the store etc etc etc.

subscription based apps became problematic because customers can d/l the apps for free, sign up for the service through Rdio, and the revenue will never go to Apple. however, Rdio has used the infrastructure that Apple has provided for the hosting service and they benefited from Apple's wide user base.

if Apple didn't take a 30% cut from Rdio, then the developers of Angry Birds would probably start to question why should they be subjected to the revenue share when the only difference between them and Rdio is the timing of payment from customer? so right from the beginning, if Rdio had a decently smart executive team, they should have realized the 30% would have to be applied to maintain revenue equality across paid apps.

regardless, on their earnings call they continue to reiterate that the iTunes + App Store only runs at a break even. if the 30% was really about "greed" as tech bloggers whined back then... well, that was a waste of effort in trying to develop an additional revenue stream since it's still running at break even.

2. i'm not quite sure where you're driving with the "lock in" analogy as most electronic retailers all do essentially the same thing. Sony wants to cover you from PS3, to HDTV, to headphones, and cameras. Same with Samsung, LG, Panasonic etc. all these brands want to make consumers a Sony/Samsung/Panasonic customer. i mean, come on... how is this even an argument? this is just basic retail strategy. Gucci/Armani/J.Crew/Banana don't just make purses, they make shoes, evening gowns, club attire, and swim wear so their target demographic can always stay loyal to their in multiple conditions.

from a finance perspective, all of these product guys have a high(er) fixed cost to hurdle over... this is just the nature of making products and why so many things get made in China. due to the fixed costs, there is a natural barrier to entry for a lot of companies who are serious about competing. notice i said serious. you can be like Meizu cranking out knock offs through a cheap manufacturer but you'll never be in same playing field with titans.

i'm unsure of how this hurts consumers... you have Sony, Panasonic, Apple, Samsung, LG, Philips, HTC, Lenovo, Asus, Acer, Nokia, HP, Dell, Blackberry... i mean, this is a pretty decent sized list of companies that compete with Apple directly across their product categories.

3. what would outrage some of y'all is their supply chain strategy. this is where the real fixed cost hurdle is located. they plunked down $5B with Samsung just to secure a flash memory deal. they funded Foxconn's factory and equipment building just so they can have capacity priority over others. they did a similar deal with the iPad glass screens where they bought out the capacity on the market for 2 quarters. these three events have delayed phone and tablet manufactures from getting their products out to market, prevented them from creating a substitutable product, and achieving similar cost levels through economies of scale.

traditionally most tech product companies focused on cost cutting and operational efficiencies. i don't think i've seen any of them so skillfully use supply and manufacturing capacity as a lever against their competitors... without them realizing it either. i remember the when Samsung proudly announced the $5B during an earnings call. what Tim Cook orchestrated behind the scenes since 2007 has been absolutely brilliant. this is stuff CXOs dream about back in H/W/S that they'll someday achieve.

all this focus on lawsuits, patents, walled gardens... it's just side drama. even Apple doesn't believe they will succeed in banning Samsung products across the world. their headache would really begin if that happened as i'm sure multiple countries would have governments very interested in finding ways to fine a company with $100B in cash. Palm and Moto went the longest with using openess as their battle stance. Samsung and HTC both moved to other areas of attack. 2 companies still make money.

come on people, this is how business gets done around the world...



I see you choose to pass over the fact. I already see you are doing your typical BS of posting profit from Apple. Not a valid argument here.

Lets see Apple system screws over anyone not Apple. The required to use Apple 30% cut for in App purchases was crap. It magically started being enforced right after Apple started prepping for their own streaming services and offering iBooks. WOO huge suprise there.

Also its lock in prevents other companies from entering the market or offering competing services. It puts a near to impossiblely high front loading cost to break in. This hurts consumers.
You have the insane Apple lock in that once you invest anything into the Apple eco system it pretty hard to break out as Apple only plays nice with Apple products.

But you LTD do not get the point. Instead you try your spin tricks to justify it. Heck your own so called arguments could be turned against you when you point to MS. MS did some dirty things in the past. Apple is doing plenty as well. Remember you had to CHOOSE to use MS windows, and you had to CHOOSE to use MS office. Apple is hurting competition not helping.

if you want other examples you have Apple string of law suits with it crapents.