Apple Makes More From iTunes and Accessories Than Most Companies Do From Phones

[apple-win]

http://www.google.com/?tbm=pts#hl=en...pw.r_qf.&cad=b


http://www.google.com/?tbm=pts#hl=en...pw.r_qf.&cad=b

About 7,440,000 results for Samsung.

About 2,250,000 results for Apple.

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Originally Posted by apple-win

http://www.google.com/?tbm=pts#hl=en...pw.r_qf.&cad=b


http://www.google.com/?tbm=pts#hl=en...pw.r_qf.&cad=b

About 7,440,000 results for Samsung.

About 2,250,000 results for Apple.

I posted it in the wrong place

[chagla]

Originally Posted by lilo777

Well, Apple accessories cost more than many smart phones. Hardly a reason to rejoice.

at last, someone mentions it. any company making huge profits by overcharging consumers is HARDLY a reason for a consumer to celebrate.

i'm baffled by all the joyful posts in every typical "apple making billions" profit thread.

[rodedwards]

With all these massive profits in mind, isn't it about time iTunes movie rentals came down in price to match Netflix and Lovefilm ?

I think Apple iTunes movies are damn expensive ...

[samcraig]

You're not over-reacting at all

I do think that many movies (for me) would be fine as streamed. There are enough though, for me, that between the movie itself and extras that come with the blu-ray - I wouldn't switch. Plus I like to own my media. And now, quote often - owning the blu-ray also gives me access to an iTunes version anyway. So for the same price as you might pay to own the iTunes movie - I get a blu-ray - all the intended extras + itunes movie.

Now - I did convert all my DVDs (no small feat) to files. But I have little desire to do that with my blu-rays at the present.

I totally understand the desire/preference for streaming. But I'm not there yet - not even thinking of it when it comes to my HD stuff.

Originally Posted by Soulweaponry

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?

[BaldiMac]

Originally Posted by slu

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.

Light on sources? It was from Tim Cook at the annual shareholders meeting in February 2012. Not sure what else you want.

Your original statement was clearly incorrect based on Apple's statements. Unless you are just starting with the assumption that someone is lying.

[Soulweaponry]

Originally Posted by samcraig

You're not over-reacting at all

I do think that many movies (for me) would be fine as streamed. There are enough though, for me, that between the movie itself and extras that come with the blu-ray - I wouldn't switch. Plus I like to own my media. And now, quote often - owning the blu-ray also gives me access to an iTunes version anyway. So for the same price as you might pay to own the iTunes movie - I get a blu-ray - all the intended extras + itunes movie.

Now - I did convert all my DVDs (no small feat) to files. But I have little desire to do that with my blu-rays at the present.

I totally understand the desire/preference for streaming. But I'm not there yet - not even thinking of it when it comes to my HD stuff.

Overreacting is way more fun than underreacting. Wouldn't you agree? Sometimes it's even followed by exclamation points.

Didn't really understand the "it's interesting you're willing to accept subpar quality" comment. What's interesting when the quality difference is barely noticable? There are pros and cons to every decision we make in life and by the "quality" being such a minute thing, it was alot easier to focus on the benefits of a digital download rather than the cons of not having physical media that can be lost or damaged.

I was going to go out and convert a bunch of blu-rays and have my whole collection in itunes and then it turns out, that's not as much fun as eating a hot pocket and watching x files reruns. I would if i had time and patience but, money isn't something i'm really worried about and i've already rebought a few movies on itunes anyway. So i've kinda given myself this rule of "only re-buy if it's a favorite movie. Keep old blu-rays and just start buying new movies digitally". I find i watch alot more movies more than once when its available in front of me as a bunch of tiled icons. I look through my dvd case and am always surprised "oh wow. I bought THIS dvd? I didn't know. I would've watched it".

[JackieTreehorn]

Originally Posted by Reelknead1

Why was Samsung left off this chart?

Title says companies, not cheap-ass copycats.

[gnasher729]

Originally Posted by roland.g

Revenue and income however are not the same thing. The iTunes Store as a major component to their profit is a myth. iTunes Store inclusive of the app and movie stores is a just better than break even enterprise contributing less than 4% to Apple's bottom line. It is there solely to facilitate the sale of iOS and Mac products from which they make their best margins.

I am quite sure "just better than break even" was true when iTunes started, but if they are not making a decent amount of money from iTunes today, then someone at Apple is doing something very wrong. Obviously they sell so many iPhones and iPads that even something hugely profitable may only add 4% to the bottom line.

I just wish it was made clear whether the 70% that Apple sends straight to record companies and software developers counts as revenue or not. If I buy £100 worth of music, books, movies, software, is that £100 revenue or is it £30 revenue for Apple?

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Originally Posted by Monkeydude

Samsung was left out, because then Apple wouldn't be on top.
Even though the text clearly states "more than most" it is a bit ridiculous.

Apple is doomed. The iTunes store makes less revenue than all of Samsung does.

Originally Posted by ArtOfWarfare

Would someone please explain why it is that Google will pay Apple for Apple to use their service but if I want to integrate Google searches into my App or Website I have to pay Google. It's the same freaking service, but Apple is able to purchase it for a negative amount of money!

Because Google _wants_ to be the default search engine on all iDevices, so they have to pay. And you _want_ to integrate Google searches, so you have to pay. You might ask Microsoft how much they will pay you to integrate Bing.

Originally Posted by slu

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.

I'm sure it's not _designed_ to make profit. But at the number of songs, books, and apps sold, making some good profit is almost _unavoidable_. Yes, you make some business decisions different when the company as a whole makes more money from iTunes making customers happy than from iTunes selling music, but I'd still expect some significant profit.

[Laird Knox]

Originally Posted by Soulweaponry

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?

Wow, what a troglodyte! I bet you don't even have gold plated fiber optic cables.

[slu]

Originally Posted by BaldiMac

Light on sources? It was from Tim Cook at the annual shareholders meeting in February 2012. Not sure what else you want.

Your original statement was clearly incorrect based on Apple's statements. Unless you are just starting with the assumption that someone is lying.

Yes, light on source. In the Apple Insider article you linked, this is the relevant passage:

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.

There is nothing there but out of context partial quotes and Apple Insider's summary of what he said. There is no transcript of the meeting available:

http://www.forbes.com/sites/conniegu...low-your-mind/

As usual, the hour-long meeting was not webcast and no transcript will be available from Apple. Reporters, also as usual, were not allowed to record the meeting, use computers or sit in the main meeting hall with Apple executives and the board. Instead, reporters watched the proceedings on video in a separate room.

So unless Apple Insider was there (unlikely, but not impossible), they are simply repeating other news organizations reporting of the meeting, which they don't even cite. Even if they were there, this is simply their summary.

And again, I said I don't think anyone was lying. These guys choose their words very carefully. Saying something was not "designed for profit" and saying it is "targeted" to run as break even doesn't mean it doesn't make a profit. I suggest you read the article MR used as a source for their article which is linked in the original article.

[BaldiMac]

Originally Posted by gnasher729

I just wish it was made clear whether the 70% that Apple sends straight to record companies and software developers counts as revenue or not. If I buy £100 worth of music, books, movies, software, is that £100 revenue or is it £30 revenue for Apple?

It does not count as revenue for Apple.
http://appleinsider.com/articles/13/...app-developers

[Internaut]

Now there's a case for the cheaper iPhone hypothesis/rumour, if there ever was one.

[roland.g]

Originally Posted by gnasher729

I am quite sure "just better than break even" was true when iTunes started, but if they are not making a decent amount of money from iTunes today, then someone at Apple is doing something very wrong. Obviously they sell so many iPhones and iPads that even something hugely profitable may only add 4% to the bottom line.

I just wish it was made clear whether the 70% that Apple sends straight to record companies and software developers counts as revenue or not. If I buy £100 worth of music, books, movies, software, is that £100 revenue or is it £30 revenue for Apple?

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Apple is doomed. The iTunes store makes less revenue than all of Samsung does.



Because Google _wants_ to be the default search engine on all iDevices, so they have to pay. And you _want_ to integrate Google searches, so you have to pay. You might ask Microsoft how much they will pay you to integrate Bing.

From an accounting standpoint the revenue is total dollars or pounds generated. The 70% payout goes into Cost of Good Sold. They are reporting gross numbers and not just their share. For those that want more concrete evidence, I would be happy to track down what you may be to lazy to, however not on my phone, it will have to wait till later today.

[BaldiMac]

Originally Posted by slu

I suggest you read the article MR used as a source for their article which is linked in the original article.

Sure. I think the assumptions in the article are reasonable. I disagree with your original statement.

Maybe putting the numbers in context will help. $2 billion in gross margin sounds like a lot to most companies. It was around 3% of Apple's gross profits for 2012. Seems pretty clear that the iTunes Store primary benefit to Apple is to help sell hardware. Just as it was reported that Tim Cook said.

[tthere5]

$29 adapters, 'nuff said.

[slu]

Originally Posted by BaldiMac

Sure. I think the assumptions in the article are reasonable. I disagree with your original statement.

Maybe putting the numbers in context will help. $2 billion in gross margin sounds like a lot to most companies. It was around 3% of Apple's gross profits for 2012. Seems pretty clear that the iTunes Store primary benefit to Apple is to help sell hardware. Just as it was reported that Tim Cook said.

Fair enough. Although the statement I disagree with, not necessarily said by you, is that Apple breaks even on iTunes. It certainly is not a large share of profits compared to iPhone and iPad, but $2 billion is $2 billion.

[BaldiMac]

Originally Posted by tthere5

$29 adapters, 'nuff said.

Because you get more revenue from a $29 adapter than a mobile phone?

Originally Posted by slu

Fair enough. Although the statement I disagree with, not necessarily said by you, is that Apple breaks even on iTunes. It certainly is not a large share of profits compared to iPhone and iPad, but $2 billion is $2 billion.

Apple had frequently said that they operate the iTunes Store a bit over break even. I guess it depends on your definition of "a bit" as to whether that continues to be true based on these numbers from Asymco.

[semontuffy]

I looked for such type of info before but now I am quite satisfied to read this a useful post about Apple iTunes. I think iTunes+Accessories combined make very big benefit for apple maybe.