Android Tops 50% Share of Smartphone Sales, But Apple Still Dominating Profits

[linux2mac]

And you have yet to answer for your irrelevancy on the link brought out to Bestbuy, how does a loss of profit to Bestbuy have anything to do with loss of profit for manufacturers? It only raises the profit as sales increase. Unless you do not understand how business works in retailing.

Not irrelevant. It goes to show the desperation of iPhone competition. No one knows the exact business contract Samsung has with Best Buy. I see numerous manufacturers rebates and promos posted all the time in circular ads. Aside from that, on first glance of the ad, I see an Android phone paired with a free BD player. To me it looked like a way to entice a customer to go with the Samsung Android. More Samsung Androids sold at Best Buy due to the promo means that inventory will be decreased and Best Buy will have to purchase more of these units from Samsung (**bells going off** which means more sales for Samsung which means more sales for Android). Samsung could be selling Best Buy a large enough volume discount - so the profit margin per unit (**bells going off again** for Samsung) may be minimal like HP's sold with Windows (they make $52 per computer compared to Apple making $650 per Mac - see reference below). It doesn't surprise me that Apple is still more profitable on less sales than Android. **Even more bells going off** People are willing to pay more money for the quality of iOS devices and Macs. Enough with splitting hairs so tiny they are short and curly.

Apple Makes More From Selling One Mac Than HP Does From Selling Seven PC's
http://www.loopinsight.com/2011/06/...-selling-one-mac-than-hp-does-from-seven-pcs/

 

[samcraig]

I sincerely think it's time for you to bow out "gracefully" from this aspect of the conversation since you're over the top when it comes to assumptions you know nothing about. You even admit it below. You have no idea what the arrangement is. Yet you would like to attach "value" to that. Fact is - your commentary/analysis is meaningless. Have a great day

Not irrelevant. It goes to show the desperation of iPhone competition. No one knows the exact business contract Samsung has with Best Buy. I see numerous manufacturers rebates and promos posted all the time in circular ads. Aside from that, on first glance of the ad, I see an Android phone paired with a free BD player. To me it looked like a way to entice a customer to go with the Samsung Android. More Samsung Androids sold at Best Buy due to the promo means that inventory will be decreased and Best Buy will have to purchase more of these units from Samsung (**bells going off** which means more sales for Samsung which means more sales for Android). Samsung could be selling Best Buy a large enough volume discount - so the profit margin per unit (**bells going off again** for Samsung) may be minimal like HP's sold with Windows (they make $52 per computer compared to Apple making $650 per Mac - see reference below). It doesn't surprise me that Apple is still more profitable on less sales than Android. **Even more bells going off** People are willing to pay more money for the quality of iOS devices and Macs. Enough with splitting hairs so tiny they are short and curly.

Apple Makes More From Selling One Mac Than HP Does From Selling Seven PC's
http://www.loopinsight.com/2011/06/...-selling-one-mac-than-hp-does-from-seven-pcs/

 

[Rodimus Prime]

Not irrelevant. It goes to show the desperation of iPhone competition. No one knows the exact business contract Samsung has with Best Buy. I see numerous manufacturers rebates and promos posted all the time in circular ads. Aside from that, on first glance of the ad, I see an Android phone paired with a free BD player. To me it looked like a way to entice a customer to go with the Samsung Android. More Samsung Androids sold at Best Buy due to the promo means that inventory will be decreased and Best Buy will have to purchase more of these units from Samsung (**bells going off** which means more sales for Samsung which means more sales for Android). Samsung could be selling Best Buy a large enough volume discount - so the profit margin per unit (**bells going off again** for Samsung) may be minimal like HP's sold with Windows (they make $52 per computer compared to Apple making $650 per Mac - see reference below). It doesn't surprise me that Apple is still more profitable on less sales than Android. **Even more bells going off** People are willing to pay more money for the quality of iOS devices and Macs. Enough with splitting hairs so tiny they are short and curly.

Apple Makes More From Selling One Mac Than HP Does From Selling Seven PC's
http://www.loopinsight.com/2011/06/...-selling-one-mac-than-hp-does-from-seven-pcs/

I think you also just posted proof of the Apple Tax. You pay all that extra amount in profit for Apple that is way out of line with the rest of the industry which is an example of the Apple Tax.

 

[slinky199]

Not irrelevant. It goes to show the desperation of iPhone competition. No one knows the exact business contract Samsung has with Best Buy. I see numerous manufacturers rebates and promos posted all the time in circular ads. Aside from that, on first glance of the ad, I see an Android phone paired with a free BD player. To me it looked like a way to entice a customer to go with the Samsung Android. More Samsung Androids sold at Best Buy due to the promo means that inventory will be decreased and Best Buy will have to purchase more of these units from Samsung (**bells going off** which means more sales for Samsung which means more sales for Android). Samsung could be selling Best Buy a large enough volume discount - so the profit margin per unit (**bells going off again** for Samsung) may be minimal like HP's sold with Windows (they make $52 per computer compared to Apple making $650 per Mac - see reference below). It doesn't surprise me that Apple is still more profitable on less sales than Android. **Even more bells going off** People are willing to pay more money for the quality of iOS devices and Macs. Enough with splitting hairs so tiny they are short and curly.

Apple Makes More From Selling One Mac Than HP Does From Selling Seven PC's
http://www.loopinsight.com/2011/06/...-selling-one-mac-than-hp-does-from-seven-pcs/

Is this how you arrive at your conclusions for non-apple products?

 

[MacNewsFix]

You pay all that extra amount in profit for Apple that is way out of line with the rest of the industry which is an example of the Apple Tax.

Someone else makes Macs besides Apple?!!

Just kidding.

I wonder what is the industry standard? As someone who has had to maintain both large numbers of Macs and PCs, I can attest to the fact that when a manufacturer reaps around $50 dollars of profit from a machine, you typically get support commiserate with their profit margins (exs. non-native English speaking call centers, long waits on hold, no local location to get support).

Also, Wintel boxes have become a commodity where manufacturers hope volume can offset small per-unit profit. Apple doesn't believe in participating in a race to the bottom where their customers suffer, so Macs will typically be more expensive than their PC counterparts. An example of where they are not are the "ultrabook" category where PC manufacturers are killing themselves trying to figure out how to undercut Apple.

How did we even get on this topic? I thought the thread is about smartphones.

 

[aerok]

Not irrelevant. It goes to show the desperation of iPhone competition.

In your reasoning, Apple must be desperate selling its Macbook against its competition because MacConnection is offering $150 rebate
http://9to5mac.com/2011/11/10/new-macbook-air-for-899-bundled-with-discounted-199-applecare/

Sarcasm intended, Apple is not the one being desperate but MacConnection trying to have more buyers from its competitors. Just like Bestbuy is trying to grab Galaxy buyers from their competitors.

To me it looked like a way to entice a customer to go with the Samsung Android. More Samsung Androids sold at Best Buy due to the promo means that inventory will be decreased and Best Buy will have to purchase more of these units from Samsung (**bells going off** which means more sales for Samsung which means more sales for Android).

Thank you for pointing out the obvious, I really needed you to tell me that to know /sarcasm. But judging how you tell us this, you must have been thinking really hard for the logic behind it. But once again, this is Best Buy, not Samsung offering the promotion. How do I know this? Well it's only Best Buy having this sale.

may be minimal like HP's sold with Windows (they make $52 per computer compared to Apple making $650 per Mac - see reference below).

This is what I hate about Apple the most, they rip us off! Not a good point about Apple to bring out.

It doesn't surprise me that Apple is still more profitable on less sales than Android.

No one is saying the contrary... Insecurity much?

**Even more bells going off** People are willing to pay more money for the quality of iOS devices and Macs. Enough with splitting hairs so tiny they are short and curly.

Only Macs are more expensive than PCs, phone prices are similar when bought off contract, I paid the same price when I bought my iPhone as my HTC or Blackberry. the iPods are similarly priced to the competitors products. Actually some devices are more expensive on contract than the iPhone is... http://www.unwiredview.com/2011/10/...roid-razr-goes-on-pre-order-tomorrow-for-299/

Apple Makes More From Selling One Mac Than HP Does From Selling Seven PC's
http://www.loopinsight.com/2011/06/...-selling-one-mac-than-hp-does-from-seven-pcs/

LOL yeah post a link posted in June written by a 16 years old with no sources behind his number. An article written by a fanboy for a fanboy. OH WAIT! Did you happen to write this?

 

[vitzr]

In 2007 Steve Jobs said he was after only 1% marketshare. Obviously, marketshare is not what they are chasing.

This is true.

Long before iPhones, Apple has charged very high prices for their products. Something they could not have done if they licensed the OS to others.

Keeping it to themselves, they have no competition. This is how Apple Tax was established. Its working very well, aided by the cult like following of religious like believers. They'll buy anything with the Apple logo.

This was the brilliance of Steve Jobs.

 

[haruhiko]

I find it quite interesting to hear the term "Apple tax" in 2011.

I think of the MacBook Air immediately.

The "Apple tax" rate on this thing is really really low. Why?

Because the Samsung equivalent of the MBA is even more expensive than Apple's top of the line ultraportable.

So what's it? Samsung tax?


and iPhones. It's not more expensive than any bleeding edge smartphone on the market. Where is the Apple Tax?

and iPads. Everyone thought that it would be ~$1K. Where has the Apple tax gone?

The real Apple tax lies in their "Pro" products.. the Macbook Pro, the Mac Pro. Those are really expensive machines comparing with PC equivalents. There is a price for Pro, of course.

 

[samcraig]

I find it quite interesting to hear the term "Apple tax" in 2011.

I think of the MacBook Air immediately.

The "Apple tax" rate on this thing is really really low. Why?

Because the Samsung equivalent of the MBA is even more expensive than Apple's top of the line ultraportable.

So what's it? Samsung tax?


and iPhones. It's not more expensive than any bleeding edge smartphone on the market. Where is the Apple Tax?

and iPads. Everyone thought that it would be ~$1K. Where has the Apple tax gone?

The real Apple tax lies in their "Pro" products.. the Macbook Pro, the Mac Pro. Those are really expensive machines comparing with PC equivalents. There is a price for Pro, of course.

Who says it's not there? It's entirely possible that Apple has arranged cut rate costs for these components and assembly in such a way that even though their product costs less to the consumer - they could still be making more profit than other companies who have to pay more for their devices yet price them competitively.

Unless you know the profit margin for both the Air and Samsung's - no one can really say.

 

[BaldiMac]

Who says it's not there? It's entirely possible that Apple has arranged cut rate costs for these components and assembly in such a way that even though their product costs less to the consumer - they could still be making more profit than other companies who have to pay more for their devices yet price them competitively.

Unless you know the profit margin for both the Air and Samsung's - no one can really say.

Of course you are just ignoring that "Apple Tax" is nothing more than marketing and propaganda. The price of a product is not based on profit margins. High margins don't prove an "Apple Tax" any more than a cold draft proves the existence of ghosts.

 

[samcraig]

Of course you are just ignoring that "Apple Tax" is nothing more than marketing and propaganda. The price of a product is not based on profit margins. High margins don't prove an "Apple Tax" any more than a cold draft proves the existence of ghosts.

Why do you keep insisting what I am or what I am not doing. I'm not ignoring "apple tax" - I didn't even use that phrase. Did you even read my post?

And what business training do you have that you think that costs have nothing to do with profit margins. What? Wow.

Stop trying to be contrary just to be contrary. It doesn't work. I know you enjoy it - or at least post such thoughts often - but this latest one is so far left field.

 

[linux2mac]

So what's it? Samsung tax?

LOL!

Perhaps I should join a VAIO forum and tell all the forum members there they are paying VAIO tax.

I am perplexed with the animosity toward Apple buyers here. There is nothing wrong with paying more for quality. No one tells me I have Prada tax for my choice of fine Italian leather dress shoes. And yes there is a difference in the craftsmanship between a $100 pair of shoes versus $600. I have had a pair of the former fall apart in less than a year while my favorite pair of black classic Prada lace ups still look sharp almost a decade later.

Its sad that others frown on people who choose to spend their hard earned money on quality craftsmanship like Apple products, Rolex watches, and Mercedes vehicles. What is so wrong with choosing to pay for quality? That's why I purchased the iPhone. I know quality when I see it. When you build a quality product it is no surprise you will dominate profits. *cough* iPhone *cough*

And there is no Apple tax on the iPhone for me ($199 from AT&T).

 

[aerok]

LOL!

Perhaps I should join a VAIO forum and tell all the forum members there they are paying VAIO tax.

I am perplexed with the animosity toward Apple buyers here. There is nothing wrong with paying more for quality. No one tells me I have Prada tax for my choice of fine Italian leather dress shoes. And yes there is a difference in the craftsmanship between a $100 pair of shoes versus $600. I have had a pair of the former fall apart in less than a year while my favorite pair of black classic Prada lace ups still look sharp almost a decade later.

Its sad that others frown on people who choose to spend their hard earned money on quality craftsmanship like Apple products, Rolex watches, and Mercedes vehicles. What is so wrong with choosing to pay for quality? That's why I purchased the iPhone. I know quality when I see it. When you build a quality product it is no surprise you will dominate profits. *cough* iPhone *cough*

And there is no Apple tax on the iPhone for me ($199 from AT&T).

Before posting about Apple tax, please go back to your lack of relevance for your previous posts, you're just adding fuel to the fire by changing the subject.

----------

Of course you are just ignoring that "Apple Tax" is nothing more than marketing and propaganda. The price of a product is not based on profit margins. High margins don't prove an "Apple Tax" any more than a cold draft proves the existence of ghosts.

Profit margins ALWAYS plays a role on price. tIt is not the only factor but what's the point for a company to sell products and ignore their profit margin? No sorry, Apple is not charitable company.

High margins does prove an Apple tax, you pay a premium for MacBooks, like it or not. It's not a mean thing to say, there is a reason why Apple posts insane profits per quarter.

----------

I find it quite interesting to hear the term "Apple tax" in 2011.

I think of the MacBook Air immediately.

The "Apple tax" rate on this thing is really really low. Why?

Because the Samsung equivalent of the MBA is even more expensive than Apple's top of the line ultraportable.

So what's it? Samsung tax?


and iPhones. It's not more expensive than any bleeding edge smartphone on the market. Where is the Apple Tax?

and iPads. Everyone thought that it would be ~$1K. Where has the Apple tax gone?

The real Apple tax lies in their "Pro" products.. the Macbook Pro, the Mac Pro. Those are really expensive machines comparing with PC equivalents. There is a price for Pro, of course.

Yes there is a Samsung tax, some people will view Samsung as a quality brand name and will pay extra for it.

 

[Rodimus Prime]

And there is no Apple tax on the iPhone for me ($199 from AT&T).

Just going to point out that if it was any other manufacture it would be $99 with in 6 months and a good chance to be free with in 1 year.

 

[aerok]

LOL!

Perhaps I should join a VAIO forum and tell all the forum members there they are paying VAIO tax.

Then you would be trolling because you will never buy a Vaio product.

 

[BaldiMac]

Why do you keep insisting what I am or what I am not doing. I'm not ignoring "apple tax" - I didn't even use that phrase. Did you even read my post?

You said "Who says it's not there?" Based on the context of the post that you quoted, it appeared that the word "it" referred to the Apple Tax. You went on the explain why you thought it could be there. I disagreed.

And what business training do you have that you think that costs have nothing to do with profit margins. What? Wow.

My qualifications are not your business. I never said that costs have nothing to do with profit margins. I said that price is not based on profit margins. A product with with 80% margins can be underpriced and a product with negative margins can be overpriced.

It's about supply and demand and maximizing profits.

Stop trying to be contrary just to be contrary. It doesn't work. I know you enjoy it - or at least post such thoughts often - but this latest one is so far left field.

Thank you for the pop psychoanalysis.

Profit margins ALWAYS plays a role on price. tIt is not the only factor but what's the point for a company to sell products and ignore their profit margin? No sorry, Apple is not charitable company.

Of course they play a role. It would be silly to sell a product if you can't get an acceptable number of people to buy it above cost (unless you make it up on the backend somehow.) But pricing products isn't just a matter of adding 20% to whatever something costs you to make and expecting people to buy it.

High margins does prove an Apple tax, you pay a premium for MacBooks, like it or not. It's not a mean thing to say, there is a reason why Apple posts insane profits per quarter.

Higher margins than your competitors don't prove a tax. Paying more for something that you consider to be worth more is not a tax.

The "Apple Tax" is an anti-Apple marketing term. Propaganda. It's meant to imply that you are paying more for the exact same thing. That the differences between Apple products and their competitors are worthless.

And they may very well be worthless to any individual. If so, they'd be silly to pay more for a Mac over a PC. But to someone who sees additional value in Apple products (aka Apple customers), any price premium is hardly a tax.

Just going to point out that if it was any other manufacture it would be $99 with in 6 months and a good chance to be free with in 1 year.

That just means that other manufactures don't feel they can sell their phones at acceptable volumes without decreasing the price within 6 months or a year.

 

[samcraig]

I said that price is not based on profit margins.

Perhaps you mean to add the word ALONE. Because when a company prices a product - they price it with considerations to profit margins.

 

[BaldiMac]

Perhaps you mean to add the word ALONE. Because when a company prices a product - they price it with considerations to profit margins.

I did not mean to add the word "alone". I think the differentiation between "based on" and "a consideration" is sufficient.

 

[aerok]

I did not mean to add the word "alone". I think the differentiation between "based on" and "a consideration" is sufficient.

The way you said meant margin has no role at all.

 

[BaldiMac]

The way you said meant margin has no role at all.

I'm sorry you read it that way. Generally, price is set by analyzing supply and demand. For a major product like the iPad, price is set before costs are even known. Costs are adjusted to meet margin goals, not prices. Customers don't pay more for the same exact pencil just because it costs more to make.

 

[samcraig]

This is what you originally said. This is what the recent posts have been responding to.

Are you still going to maintain you're "right" ?

When did you write, "based on" or "a consideration"

And don't say it was assumed. Because it wasn't.

The price of a product is not based on profit margins. High margins don't prove an "Apple Tax" any more than a cold draft proves the existence of ghosts.

----------

I'm sorry you read it that way. Generally, price is set by analyzing supply and demand. For a major product like the iPad, price is set before costs are even known. Costs are adjusted to meet margin goals, not prices. Customers don't pay more for the same exact pencil just because it costs more to make.

WHAT? You think the price for the iPad was set before the COSTS were known?

Utter business fail.

Everything is considered.

 

[BaldiMac]

This is what you originally said. This is what the recent posts have been responding to.

Are you still going to maintain you're "right" ?

When did you write, "based on" or "a consideration"

And don't say it was assumed. Because it wasn't.

I'm not sure what you are trying to say. It says "price of a product is not based on profit margins" clear as day.

WHAT? You think the price for the iPad was set before the COSTS were known?

Yep. I think that Apple developed the iPad to meet specific pricing goals.

Utter business fail.

I guess that's your opinion. Something to support it would be nice.

Everything is considered.

Again, I agree.

 

[aerok]

Yep. I think that Apple developed the iPad to meet specific pricing goals.

You are right and wrong with this. It is met based on pricing goals but also profit margin goals. Like any products in the market.

Here are usual steps in pricing an item

1. Study existing products and price on market
2. Calculate potential cost of materials for product and keep it as low as possible
3. Determine overhead cost while keeping it low as possible
4. Determine the profit margin that would please investors and be competitive
5. Take cost (2)+(3) and then you determine what the final price will be based on desired profit margin and competition.

In a situation where only pricing goal is set first (Your logic). The end product could possibly end up being a mess with no precise sight on how the product will be.

IE. I ask you to build me a product that will cost $600 on the market. As an product designer, you will want to kill me for not giving what the profit margin is because you would have to make different prototypes with different costs.

 

[samcraig]

You are right and wrong with this. It is met based on pricing goals but also profit margin goals. Like any products in the market.

BaldiMac will say that he didn't say it wasn't. What he said was "Apple developed the iPad to meet specific pricing goals." and that he didn't say other factors weren't included. This is how he operates.

 

[BaldiMac]

You are right and wrong with this. It is met based on pricing goals but also profit margin goals. Like any products in the market.

I don't think that disagrees with what I said. Price was determined by an analysis of supply and demand. The product was developed to meet cost (margin) goals at the desired selling price.