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Apple Makes More From iTunes and Accessories Than Most Companies Do From Phones
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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.
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.
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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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.
Citation? I see nothing in the transcript of the Q1 2012 earnings call or press release that back that up:
http://seekingalpha.com/article/321...-results-earnings-call-transcript?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/lesser-known-facts-from-apples-earnings-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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http://appleinsider.com/articles/12...dends_a_stock_split_itunes_content_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."
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.
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/iphone-revenue-greater-than-all-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."
![iphone-galaxy-2.jpg]()
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/2013/02/01/us-apple-samsung-idUSBRE91015B20130201
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"
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/iphone-revenue-greater-than-all-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/2013/02/01/us-apple-samsung-idUSBRE91015B20130201
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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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.
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.
"iTunes+Accessories combined is a bigger business in terms of revenues than all users of MacRumors in 1877 MULTIPLIED."
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.
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.
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-more-complete-picture-of-the-itunes-economy/
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:
The linked article has a lot of good info.
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my bank account knows
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.
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.
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.
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.....
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.
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?