Apple Takes 104% of All Smartphone Profits Following Galaxy Note 7 Recall

[Thunderhawks]

You're so out of touch, 103 percent is new and thinner math vocabulary developed by Apple.
It is included in touch bar and emoji in the latest beta OS's.

You are so right, I have been thinking about it and ONLY Apple can pull that 4% off.
Sheer magic.

 

[Analog Kid]

It's still an incredibly meaningless number.

The most profit you can make is 100%.

Apple did not make $12.50 (125%) in that example. They still only made $10.

The correct way of reporting this is to separate out profits and losses.

Anything else is typical modern internet blather.

You are confusing Apple's profit margins with Apple's share of the industry. It's not a meaningless number, it just doesn't mean what you're trying to make it mean.

The highest profit margin you can have is 100%. The most profit share you can have is not limited to that.

The world is dumping a huge amount of money into smartphones. Were is it flowing? To Apple. That's what this number means. It's reported as a share just as unit shipments are reported as a share-- when people jump up and down about Samsung's market share you could just as easily say "But that's a meaningless number, because Samsung shipped 100% of Samsung phones."

Clearly saying that Samsung shipped 100% of Samsung phones sounds silly, because it is. What we care about is how are they doing relative to the market as a whole. They're shipping 21.7% of smartphones on the market. That share is calculated the same way profit share is calculated.

Tell me Apple made x million dollars, and I think "Ok, I have no idea what that means. Are they doing well?" Tell me they have 104% of the industry profits and I think "Yes, they're doing well. They're doing better than the rest of the industry combined."

At the end of the day, market share is more interesting to developers and maybe component suppliers than it is to the manufacturers themselves. Profit share is what matters to the manufacturers because it's what keeps them in business.

 

[HobeSoundDarryl]

Come up with a better reason to hate a company than that they are doing well.

No hate. I like Apple just fine. Own LOTS of Apple stuff. I was simply poking at how we celebrate a corporations growing riches like our own riches are growing. Nothing more than that.

 

[smacrumon]

Meanwhile Apple washing machines are being recalled. They cause fires in some countries and injuries in others. https://www.cnet.com/au/news/samsung-recalls-2-8m-washing-machines-due-to-injury-risk/

 

[Analog Kid]

Any company would want the right mix of both. Say 10 people spend $2K on a new MBP. That's $20K in revenue But what if pricing it $300 cheaper would get 20 people to buy instead of 10? That's an extra $14K in revenue. I know which I would prefer.

Which is why we look at profit, not profit margin...

It's easy to increase your profit margin by raising your price. It's easy to increase your market share by lowering your price. What's hard is finding the optimal combination of both-- the price that maximizes your total profit. When you are at that optimum you will get less profit by increasing your price (because less people buy your stuff) and you'll get less profit by lowering your price (because your profit margin is lower).

 

[tbrinkma]

Apparently by liberal arts majors. Not business. Not engineering. Not any scientific method.



It's still an incredibly meaningless number.

The most profit you can make is 100%.

Apple did not make $12.50 (125%) in that example. They still only made $10.

The correct way of reporting this is to separate out profits and losses.

Anything else is typical modern internet blather.

Nobody but you is claiming that Apple made $12.50 in that example.

You not understanding mathematics that you should have learned before high school is not a failure of anyone but yourself.

 

[Analog Kid]

No hate. I like Apple just fine. Own LOTS of Apple stuff. I was simply poking at how we celebrate a corporations growing riches like our own riches are growing. Nothing more than that.

That's a zero sum view of the world, and the world doesn't work like that. If you have bar of chocolate and I have a dollar, and I give you the dollar for the chocolate it is because I'm happier with the chocolate than the money and you're happier with the money than the chocolate. It's not zero sum, it's a net global benefit-- we're both happier.

Nobody here is celebrating Apple's profits as a number other than investors. Profit is a measure of how much the market values Apple's contribution to their products, so people are simply pointing out that there is an objective metric here that shows that people generally think Apple adds more value to their products than any other manufacturer does.

 

[ayokkay]

The very best smartphones deserve all the profit.

This also does make Tim Cook's critics look pretty foolish.

Winning on someone's bad luck and misfortune does not make you the best! It just makes you lucky...
Tim Cook...foolish...macbook pro.

 

[BlargKing]

I won't need it because I have chosen an ecosystem that's not based on and entirely dependent on harvesting my info. You won't need it either with your head in the sand. But I hope you were at least honest with your bro since I noticed that you didn't dispute the facts.

Yes I'm sure Apple neeever harvests user info . My head isn't in the sand. I've known Google stores user data for years, I just plainly don't care. I'm nobody special or important, what do they care about my data? Why do I care if some anonymous company peon knows my search history? I've committed no crimes nor do I intend to, so at best all their data gives them is a way to fine tune the advertisements they throw at me. How tragic.

And its not as if having an iPhone protects you from data mining. Theres plenty of ways to track user data through web browsers and apps. If you think having an iPhone means your internet footprint is smaller than mine, then you sir are the one with your head in the sand.

The way you speak you act as if this is a huge deal or something. "I hope you were honest with your bro" like chill the **** out dude its a phone. Millions of people use Android if it was as big a problem as you say I'm sure someone would have blown the whistle by now.

 

[ackmondual]

Shall we start the "Samsung is doomed" chants?

 

[Analog Kid]

Nobody but you is claiming that Apple made $12.50 in that example.

You not understanding mathematics that you should have learned before high school is not a failure of anyone but yourself.

@kdarling understands math. I'm not sure why he's taking the argument that he is here. I suspect he's trying to make a different point entirely, or he doesn't understand why people find importance in the profit share metric, but in every disagreement I've had with him it has never been because he was uneducated or naive...

 

[KdParker]

If we are in the same industry and I make $100 but you lose $50 (or make a -$50 profit), the total profit across the entire industry (your "profit", and my profit) is $50, because your loss pulls the total profit for the industry backwards. So my percentage of the industry's profit is the profit I made divided by the industry profit times 100 (to convert from decimal to percent) or ($100/$50)*100=200%. Therefore I made 200% of the industry profit. In this case the iPhone is almost the ONLY phone that actually makes money. Samsungs profit share was 0.9% and HTC and LG lost money. That's what happens when you sell millions of devices at a loss.

Mic drop. Albeit, a little wordy, but still a Mic drop moment.

 

[Wondercow]

Like a race where all but one of the contestants falls dead during the race and we all celebrate the one remaining contestant winning? What a VICTORY, right? A win due to someone else's misfortune.

Again, a race where the leader falls out of the race and the 2nd place runner walks across the finish line and is celebrated. Rah-rah-rah, indeed

You seem to be under the impression that this report is about market share, not profit share. No one died or fell out of the race; Apple has had about 90% profit share for years. It's not new that they're "winning"--they've not been the 2nd placer runner in the profit share race for many years now: According to the same report, Apple managed 90 percent profit share in the same quarter a year ago

Did you read the article? The only reason Apple got those numbers was due to Samsung's massive losses over the Note 7 issue

Did you read the article? Ahem....

Apple's staggering 103.6 percent profit share in Q3 2016 came largely as a result of significant losses posted by rival vendors including LG and HTC

Losses by multiple vendors, not just Samsung. In fact, Samsung took 0.9% of industry profits, so it seems the other vendors had more of an impact on Apple's gain.

 

[jlc1978]

Word hasn't gotten around that 100% is where it ends.

There numbers are misleading but could be correct since they include losses in the calculation. It is an odd way to calculate profit share and confusing.

 

[62tele]

This also does make Tim Cook's critics look pretty foolish.

No it doesn't! That's what he's good at, supply chain and managing margins. It doesn't speak to his vision for the company. The iPhone is an iconic product and the Apple name has great cache. It's a coattail effect. I don't think Apple has wowed anyone in the last 2 years. The iPhone 6 was a breakthrough because they finally met the threat of larger screen sizes but it seemed to done out of necessity. The iPad Pro & Apple Watch? Meh. The Mac line has suffered from snail paced development. Siri and iCloud - flakey. AI- where? VR- where? Home? Not much. Apple TV 4 was a great upgrade but hardly groundbreaking.
Tim is a number cruncher and a manager. It's like a game and Tim entered the game as QB in the first quarter with a 2 touchdown lead.

 

[gnasher729]

Hmmmm.....so if apple had a profit of 100M and the rest of the industry had a loss of 100M, apple would have an infinite percent of industry profit.

Infinite profit

Cha ching......ducking....

Obviously not infinite profit. Infinite percentage of a grand total of zero profit. Worse, if the rest had a loss of 100M + 1 dollar, then the total profit would be minus $1, and Apple's percentage of minus $1 would be minus 10 billion percent :-(

The fact is: In the time measured, all of Apple's competitors together didn't make money, but a loss. If that happens, and Apple makes more money than the total loss of the competitors, then Apple makes more than 100% of the total profit. That's maths. But other from that, it doesn't say much at all about Apple's profits. What it means is that Apple is the only one (this time) making profits. Beyond that, what people should look at is how much profit. And in the past, it has happened several times that Apple and Samsung combined were the only one making profits.

 

[KdParker]

Do I understand this correctly? Apple has less market share than Samsung, and because of Samsung's Note 7 issues (and losses) that Apple's standing rose, and this article makes it sound like that Apple did something great with record relative profit standings? I call BOGUS. Yet another Rah-Rah-Rah BS article.
[doublepost=1478264315][/doublepost]

Like a race where all but one of the contestants falls dead during the race and we all celebrate the one remaining contestant winning? What a VICTORY, right? A win due to someone else's misfortune.

But isn't every race won due to the loser's misfortune?

 

[gim]

There is NO negative profit, that's absurd. It's called a loss then. Therefore Apple taking 104% of the industries profits makes no freaking sense.
No math can justify the wrong usage of the word "profit".

 

[kdarling]

You are confusing Apple's profit margins with Apple's share of the industry. It's not a meaningless number, it just doesn't mean what you're trying to make it mean.

It's bad enough that some ignorant reporter started this mathematical nonsense a couple of years ago, but worse that otherwise intelligent people keep repeating it.

For one thing, everyone keeps saying "share of the total profit".

Sorry, but that stops at 100% of the total profit. Losses are not part of the "total profit". They're part of the "total losses".

Not only does it say nothing about how well Apple is doing or not, but it becomes nonsensical in several cases even if you're stretching it to mean some mythical "share of the industry".

===============================
Example of how stupid it is #1:
===============================

Apple makes $10
Samsung loses $10
HTC makes 0
-----------------
Sum : 0

Therefore by the stupid math, Apple made $10/0 = not a possible operation. Duh.

The correct way to report it is that Apple made 100% of the industry profits, Samsung had 100% of the losses, and HTC made nothing.

===============================
Example of how stupid it is #2:
===============================

Apple makes $10
Samsung loses $10
HTC loses $20
-----------------
Sum -$20

Therefore by the stupid math, Apple made $10/-$20 = -50% share. Ooops. That sounds really bad.

The correct way to report it is that Apple made 100% of the industry profits, Samsung had 33% of the losses, and HTC had 66% of the losses.

 

[wigby]

When I mean stuck, I mean what I posted as my first reason why people don't switch. For me, after 9 years using Apple's eco system, won't change not because of how easy it is to use or how great you might think it is, but because of all the money invested into it, that would have to be re-invested into a new OS Eco system. It really has nothing to do with laziness or preference or comfort. It's really all about the DOLLAR in my pocket, I mean Apples SAFE.

As for your comment on that people are leaving Android to go to iOS is just totally false. In fact, iOS saw a loss in market share this year while Android saw a gain. Just because Apple is making more money than Android doesn't mean that people are leaving the Android market like you make it out to be.

What's your investment? All those apps and movies and music you bought? How is Microsoft and Google and Samsung and Amazon any different? They all use DRM on everything except for music. You would have the exact same issue switching to or from any platform so don't blame Apple.

You're lumping all of Android together. Cheap Android devices being pumped into the third world don't count as far as marketshare because Apple doesn't compete in that space. The space they do compete in is the high end one and steal more from Samsung and Google than vice versa. Apple's rate of iOS adopters is continuing to grow, not contract like Android high end adoption.

http://www.forbes.com/sites/ewanspence/2015/03/24/android-apple-switchers/#7b32f4e3977a

 

[truthertech]

Yes I'm sure Apple neeever harvests user info . My head isn't in the sand. I've known Google stores user data for years, I just plainly don't care. I'm nobody special or important, what do they care about my data? Why do I care if some anonymous company peon knows my search history? I've committed no crimes nor do I intend to, so at best all their data gives them is a way to fine tune the advertisements they throw at me. How tragic.

And its not as if having an iPhone protects you from data mining. Theres plenty of ways to track user data through web browsers and apps. If you think having an iPhone means your internet footprint is smaller than mine, then you sir are the one with your head in the sand.

The way you speak you act as if this is a huge deal or something. "I hope you were honest with your bro" like chill the **** out dude its a phone. Millions of people use Android if it was as big a problem as you say I'm sure someone would have blown the whistle by now.

Hey, it's cool that you don't care. It's your choice, just that your brother might choose differently if he knew and not want the government to be able to serve a subpoena on Google to get every message or email he's ever sent or received or some employer in the future to potentially get a copy of every photo he's taken or post he's made, etc,

 

[MrXiro]

Well put.


However, I would argue that MacRumors hasn't been an Apple fan sit for a very long time.

It's a tech site that caters to Apple users. All their articles are semi-relevant to Apple... sometimes they posts news about competitors but it's all relevant. This site is also a business too... they are about getting hits. It's annoying to us but as someone who used to be a web journalist I totally still consider this an Apple Fan Site... Just one that needs to do what it has to do to stay afloat.

 

[truthertech]

But isn't every race won due to the loser's misfortune?

Except Grasshopper Apple has had over 90% of the profits for several years in a row.

 

[Michael Scrip]

how can you blame on the users or Carriers? since iphone 7 is a hot item, users wants it. and carriers use it to compete each other, starting with Tmobile. If tmobile did not offer trade-in, they did not gain new customers. if ATT did not offer the trade-in promo, they would lose customers to tmobil. Same to Sprint and Verzion.

Tmobile would not offer this promo if iphone sucks and no one wants it. Why did they not use Galaxy phone for their promo? because it is not a hot item.

in other words, iphone 7 is truly a hot item that many wants. plain and simple. there is no spin around it, nor marketing.

if you think iphone 7 did not offer much, well blame on mobile tech maturity. don't expect major innovation like iphone 3G and iphone 4 when mobile tech was at its infancy.

To put is simply... the carriers are giving you a phone so you will give them $2,000 over the next two years!

 

[Analog Kid]

It's bad enough that some ignorant reporter started this mathematical nonsense a couple of years ago, but worse that otherwise intelligent people keep repeating it.

For one thing, everyone keeps saying "share of the total profit".

Sorry, but that stops at 100% of the total profit. Losses are not part of the "total profit". They're part of the "total losses".

Not only does it say nothing about how well Apple is doing or not, but it becomes nonsensical in several cases even if you're stretching it to mean some mythical "share of the industry".

===============================
Example of how stupid it is #1:
===============================

Apple makes $10
Samsung loses $10
HTC makes 0
-----------------
Sum : 0

Therefore by the stupid math, Apple made $10/0 = not a possible operation. Duh.

The correct way to report it is that Apple made 100% of the industry profits in this case.

===============================
Example of how stupid it is #2:
===============================

Apple makes $10
Samsung loses $20
HTC loses $10
-----------------
Sum -$20

Therefore by the stupid math, Apple made $10/-$20 = -50% share. Ooops. That sounds really bad.

The correct way to report it is that Apple made 100% of the industry profits in this case.

See, told you @kdarling understood math...

In your first example, there's nothing wrong with saying they had an infinite percentage of the industry profit. A little strange to read, for sure, but mathematically sound.

In your second example, the industry made a negative profit (loss), so Apple had a -50% share of the loss-- which sounds about right.

This isn't a new problem-- this has always been a challenge with relative measures. Ratios with small denominators are sensitive metrics. You hit a similar problem if I ask you to plot data on a log scale-- if you get non-positive numbers in there it blows up. That doesn't mean a log plot isn't a useful tool, it just means you need to understand what you're talking about and maybe reformulate it under certain conditions.