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Old Feb 12, 2013, 09:44 AM   #51
locust76
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Originally Posted by Reelknead1 View Post
Why was Samsung left off this chart?
Because Samsung probably had bigger numbers.
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Old Feb 12, 2013, 09:45 AM   #52
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Originally Posted by Death Star View Post
Brace yourself... iPhone 5s... made out of plastic lol.
You mean this robust material used in military applications? ;-)
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Old Feb 12, 2013, 09:49 AM   #53
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Not saying the numbers aren't impressive, they are, but it does stand out to me that you're not just talking about iTunes sales done on iPhones or iPads. You're talking about comparing a digital media and App Store + Accessories to phone sales. I buy TV Shows on iTunes on my home Windows PC... not even on a Mac.

Again, let me say that it is an impressive, very impressive, accomplishment, but the article seems to read as if we're just talking iTunes on iDevices, which I don't think is the case...

Again, not to take away from it, but just to point out a little oddity in the wording.
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Old Feb 12, 2013, 09:50 AM   #54
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Old Feb 12, 2013, 10:00 AM   #55
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Originally Posted by slu View Post
Finally people will stop with the nonsense that Apple doesn't make anything from iTunes and it only exists to sell hardware. This business has not been a break even business for years.
Based on what? As recently as Q1 2012, Apple has stated that they operate the iTunes Store a bit over break even. Not sure if anything has been said about it since then.
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Old Feb 12, 2013, 10:17 AM   #56
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Originally Posted by bjm2660 View Post
Sometimes it can be challenging to reconcile charts like these (which present Apple as such a formidable player) with more pessimistic financial reports (which provoke such ire from Wallstreet talking heads).

Which is it? Is Apple a dominant, powerful, effective company or is it a withering, coasting, declining company?

Discuss
Much more the former than the latter. Referring to a company that is pulling in $175+ billion of revenue and $40 billion+ of profit (and yet increasing year-to-year, quarter by quarter) as withering or declining is utterly ridiculous. It is the prattle of nattering nabobs and stock manipulators.

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Quote:
Originally Posted by locust76 View Post
Because Samsung probably had bigger numbers.
That is not the point.

The point is that Apple is large enough where they are selling more in doodads and tunes than Nokia, Motorola, Sony, LG, RIM and HTC are in PHONES.

That's the point.

And I'm bemused by the revenue/profit argument that some are making here. If Apple's margins on their phones are 30-40 percent, what do you think the margins are on their accessories? The profits they make off of these probably exceed the profits of the others short of Samsung.
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Old Feb 12, 2013, 10:26 AM   #57
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Well, Apple accessories cost more than many smart phones. Hardly a reason to rejoice.
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Old Feb 12, 2013, 10:31 AM   #58
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Originally Posted by BaldiMac View Post
Based on what? As recently as Q1 2012, Apple has stated that they operate the iTunes Store a bit over break even. Not sure if anything has been said about it since then.
Citation? I see nothing in the transcript of the Q1 2012 earnings call or press release that back that up:

http://seekingalpha.com/article/3218...pt?part=single

In fact, the only article I can find from around that time frame states the opposite:
http://www.tuaw.com/2012/01/25/lesse...ngs-statement/

And this was when iTunes revenue was less than half of the last quarter.

This whole break even thing is now an urban legend. Especially with the huge growth of the iOS ecosystem. There is no way costs scale at the same rate as revenue for this service. I would bet that at this point margins are pretty good.
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Last edited by slu; Feb 12, 2013 at 10:38 AM.
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Old Feb 12, 2013, 10:35 AM   #59
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Originally Posted by slu View Post
Citation? I see nothing in the transcript of the Q1 2012 earning call or press release that back that up:

http://seekingalpha.com/article/3218...pt?part=single
http://appleinsider.com/articles/12/...ent_deals.html

"Cook then addressed the specifics of the question, noting that Apple has lots of content, "most everything" in the music business and around 40,000 movies and 70,000 TV shows, but that it "was not there for the profit," noting that the iTunes Store is targeted to run at break even as a convenience to users, not as a business."
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Old Feb 12, 2013, 10:40 AM   #60
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This is the reason why we won't see an actual Apple TV set. A cheap set top box will get into the hands of many, many more people who will then spend more on iTunes.
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Old Feb 12, 2013, 10:40 AM   #61
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Samsung would be the ONLY company to exceed Apple's sales of iTunes and accessories by sales of phones, which they report to be around 18 billion dollars per quarter in mid-2012. However, their phone sales (not only smartphone but featurephones as well) would be lower than sales of Apple's ONLY smartphones.

How big is iPhone business? "To start out with, Apple's iPhone business unit could be a Fortune 50 company on its own. That business unit is already bigger than all of Microsoft in terms of revenue. From June 2011 until June 2012, the iPhone generated $74.3 billion in revenue for Apple. By comparison, all of Microsoft's business units together generated $73 billion in revenue." http://www.tuaw.com/2012/09/07/iphon...of-microsofts/

http://barefigur.es - according to them, in last quarter Apple sold a record 47 million iPhones bringing in about 30 billion dollars in revenue (total revenue was 54 billion dollars in that quarter).

Compared to Samsung: "Raymond James compiled a chart of the cumulative sales of the iPhone 4, iPhone 4S, and iPhone 5, and compared it against sales of Galaxy S and Galaxy Note smartphones. The analyst found that Apple’s (AAPL) flagship smartphones are doing just fine and have outsold Samsung (005930) 219 million to 131 million over the past two and a half years."



From these numbers, its clear that all of Samsung phone sales actually lower than sales of iPhones.

In US market Apple with single smartphone iPhone 5 model outsold ALL samsung phones combined "Apple sold 17.7 million iPhones in the U.S. in the fourth quarter, up 38 percent from the previous year, driven by aggressive marketing of its new iPhone 5 (Smartphone), the firm said. Samsung shipped 16.8 million phones during the same period."
http://www.reuters.com/article/2013/...91015B20130201

Compared with Apple's sales of iPhones of 30 billion dollars, sales of likes of LG (Nexus 4) in low 2-3 billions are miniscular. Don't forget that in addition to giant sales, Apple takes in lion's share of profits as well.

More you think about it, more the sheer size of Apple in phones is staggering. And this is a company which just 5 years ago didn't have phones and when introduced iPhone, was ridiculed as "PC company which doesn't know about phones"
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Old Feb 12, 2013, 10:43 AM   #62
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Quote:
Originally Posted by BaldiMac View Post
http://appleinsider.com/articles/12/...ent_deals.html

"Cook then addressed the specifics of the question, noting that Apple has lots of content, "most everything" in the music business and around 40,000 movies and 70,000 TV shows, but that it "was not there for the profit," noting that the iTunes Store is targeted to run at break even as a convenience to users, not as a business."
Outside of the "not there for the profit" statement, that article is light on direct quotes and sources for the quotes. But even if these are direct, in context quotes, he never said it doesn't make a profit. He said it wasn't designed to make a profit. I don't buy it. I guess we will never know for sure unless Apple wants to tell us.
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Old Feb 12, 2013, 10:43 AM   #63
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Originally Posted by slu View Post
I guess not. I know revenue and net income are not the same, but there is no way that the cost to run iTunes makes it a break even proposition. No way.
70% of revenue goes to the content. And that revenue does not reflect at all the cost associated with any of the free content. Housing, processing, distributing, facilitating all the content, free or paid is mostly taken up by the 30% they make off paid content.

Pay real attention to their earnings and their financial statements.
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Old Feb 12, 2013, 10:48 AM   #64
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Originally Posted by bigcat318 View Post
"iTunes+Accessories combined is a bigger business in terms of revenues than any of the other phone vendors except Samsung."

Because statistics are manipulated to prove the point you are trying to make.
"iTunes+Accessories combined is a bigger business in terms of revenues than all users of MacRumors in 1877 MULTIPLIED."
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Old Feb 12, 2013, 11:03 AM   #65
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wasn't there a time ...

Wasn't there a time when Steve Jobs wanted to omit the cell phone companies from the the communication process? Whatever happened to that dream? Would it be possible with apple's profits to make this happen? Completely kill the cell phone carrier ridiculous rates while they make money from iTunes and the hardware. Thats the dream. Would be nice to not have to worry about data plans or cell phone contracts. Just buy a new phone when they come out.
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Old Feb 12, 2013, 11:05 AM   #66
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Originally Posted by roland.g View Post
70% of revenue goes to the content. And that revenue does not reflect at all the cost associated with any of the free content. Housing, processing, distributing, facilitating all the content, free or paid is mostly taken up by the 30% they make off paid content.

Pay real attention to their earnings and their financial statements.
Outside of your snide remark, do you have any citation for this? I did some actual research and Apple is quite silent on this topic. They in now way have made the claim that you have made in any earnings call or financial statement. All that exists regarding the profitability of iTunes is speculation, including what you posted.

Here is a recent detailed "educated guess" on the iTunes store: http://www.asymco.com/2013/01/09/a-m...tunes-economy/

Quote:
Here are some conclusions:

The iTunes economy defined as gross revenues transacted through it is now about $12 billion/yr.
Over the last five years content owners (media and app) received a total of $24 billion while Apple spent about $10 billion to create those sales
Seen as a retail business, iTunes costs about $3.5 billion/yr to operate. This includes merchandising, payment processing and “shipping & handling”.
Total revenues have risen steadily in a range of 32 to 38% compounded over the last 4 years.
Apps are now a third of all iTunes revenues, (about $4 billion/yr) having taken that share in only 4.5 years.
Non-app media still make up 2/3 of iTunes in terms of sales value but their growth is now 28% vs. about 50% for apps.
I'd be happy to read anything you can point me to that will back up your "conclusions". It seems to me that you need to "pay real attention". Because what you are spouting off is simply the 70/30 app split and completely ignores all the other content on iTunes.

Also, this is from the article linked in the MR article:

Quote:
When re-stated this way, iTunes becomes much more than a “break-even” business. My own estimate for its gross margin as currently reported is between 15% and 17% but it could be even higher.
The linked article has a lot of good info.
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Last edited by slu; Feb 12, 2013 at 12:04 PM. Reason: added quote from article linked in the MR story.
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Old Feb 12, 2013, 11:08 AM   #67
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I spent ridiculous amounts of money via iTunes (apps/in app purchases/music etc.) last year after I got my iPad. Of all those apps/in app purchases/music, I'd say 1/20 of what I spent was worth buying.

Should I replace my iPad, I will definitely be much more cautious/frugal with my purchases.
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Old Feb 12, 2013, 11:12 AM   #68
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Originally Posted by LittleStuffBull View Post
This is the most confusing London Underground map I have ever seen.
I literally laughed out loud when I read this! Thank you, kind sir!
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Old Feb 12, 2013, 11:17 AM   #69
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Originally Posted by StoneJack View Post
Samsung would be the ONLY company to exceed Apple's sales of iTunes and accessories by sales of phones, which they report to be around 18 billion dollars per quarter in mid-2012. However, their phone sales (not only smartphone but featurephones as well) would be lower than sales of Apple's ONLY smartphones.

How big is iPhone business? "To start out with, Apple's iPhone business unit could be a Fortune 50 company on its own. That business unit is already bigger than all of Microsoft in terms of revenue. From June 2011 until June 2012, the iPhone generated $74.3 billion in revenue for Apple. By comparison, all of Microsoft's business units together generated $73 billion in revenue." http://www.tuaw.com/2012/09/07/iphon...of-microsofts/

http://barefigur.es - according to them, in last quarter Apple sold a record 47 million iPhones bringing in about 30 billion dollars in revenue (total revenue was 54 billion dollars in that quarter).

Compared to Samsung: "Raymond James compiled a chart of the cumulative sales of the iPhone 4, iPhone 4S, and iPhone 5, and compared it against sales of Galaxy S and Galaxy Note smartphones. The analyst found that Apple’s (AAPL) flagship smartphones are doing just fine and have outsold Samsung (005930) 219 million to 131 million over the past two and a half years."

Image

From these numbers, its clear that all of Samsung phone sales actually lower than sales of iPhones.

In US market Apple with single smartphone iPhone 5 model outsold ALL samsung phones combined "Apple sold 17.7 million iPhones in the U.S. in the fourth quarter, up 38 percent from the previous year, driven by aggressive marketing of its new iPhone 5 (Smartphone), the firm said. Samsung shipped 16.8 million phones during the same period."
http://www.reuters.com/article/2013/...91015B20130201

Compared with Apple's sales of iPhones of 30 billion dollars, sales of likes of LG (Nexus 4) in low 2-3 billions are miniscular. Don't forget that in addition to giant sales, Apple takes in lion's share of profits as well.

More you think about it, more the sheer size of Apple in phones is staggering. And this is a company which just 5 years ago didn't have phones and when introduced iPhone, was ridiculed as "PC company which doesn't know about phones"
There is one big problem with this chart - most Samsung smart phone models are not on it. And those, while not their flagship models, are much more advanced than iPhone 4S let alone antiquated iPhone 4.
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Old Feb 12, 2013, 11:39 AM   #70
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It's (somewhat) fun to find numbers like this but otherwise, it's mostly pointless to compare revenue in unlike markets like this.

The only thing you can really take away from this, that apple is really big, we already knew.
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Old Feb 12, 2013, 11:46 AM   #71
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Originally Posted by Scottama View Post
A much bigger problem; why does the scale of the Y axis fluctuate wildly. Each gap represents $2 billion, $1 billion, $2 billion, and $1 billion respectively.

It takes a special kind of incompetence to pull this off.
Good catch - I looked at the original posting by Horace and no one mentioned this in the Asymco comments either.

Not sure if he was using those divisions as a way of highlighting data, or if it's just a typo. Certainly he didn't explain it.

Horace has a pretty damn good body of work out there, but this is a bit puzzling. In the end, Apple still comes out on top, the ordering of the rest of the finishers isn't altered at all, but hmmmmmmmm.....
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Old Feb 12, 2013, 11:58 AM   #72
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As someone that ditched blu-ray to buy movies exclusively through iTunes, hell yeah. Keep it comin baby!
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Old Feb 12, 2013, 12:05 PM   #73
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As someone that ditched blu-ray to buy movies exclusively through iTunes, hell yeah. Keep it comin baby!
Yep. Same here. Ditched blu-ray for iTunes and love it.

Bye bye physical format forever.
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Old Feb 12, 2013, 12:10 PM   #74
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As someone that ditched blu-ray to buy movies exclusively through iTunes, hell yeah. Keep it comin baby!
So you have the latest and greatest from Apple. I'm assuming you believe Apple has the best overall experience. And is of the best quality?

Interesting then that you accept a sub-par video and audio quality when it comes to movies. To each their own. Sincerely.
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Old Feb 12, 2013, 12:18 PM   #75
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So you have the latest and greatest from Apple. I'm assuming you believe Apple has the best overall experience. And is of the best quality?

Interesting then that you accept a sub-par video and audio quality when it comes to movies. To each their own. Sincerely.
Basically, "You're an idiot for liking what you like but hey, to each his own". I appreciate the kind nature of statements like yours. Really

And i didn't decide overnight to buy exclusively through itunes. It was a process. Reading articles from professionals that compare picture quality and hell, i brought my bedroom tv into my living room so i could compare the same movie side by side with the exact same image settings on two tv's. There was next to no discernible difference AND a ton of pros to go along with it like always having on demand access to my movies and being able to just load it up on an ipad or iphone on the go and still getting special features.

But hey, i'm not a smarty pants videophile that gets my panties in a twist over what other people consider "good for them". I'm just a guy with some apple stuff, a receiver and a 55inch led tv i like to watch movies on. What do i know right?
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