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

[Abazigal]

And yet another way is by reducing R&D costs, which is rather evident by the stagnant line of Apple products.

The touchbar reportedly took 2-3 years to develop. So it's not that Apple is slacking, but that some forms of innovation simply require more time before they can bear fruit.

After all, did the iPad not take 7 years from when it was first conceived by Steve Jobs to when it was released.

 

[cmwade77]

Apple makes 10 dollars.
Samsung looses 2 dollars

Total profit is now 8 dollars.

Apples share of total profit is now 10/8 = 125%.

Sorry, but in this example Samsung cannot count as they lost $2, which means there was NO profit to count for them. Meaning Apple captured 100% in this example. You can never capture more than 100%.

 

[macUser2007]

...

You have no way of knowing what Apple is focusing that R&D on because Apple obviously doesn't report it, and you have no way of knowing what is successful and what isn't.

I realize none of this matters because it all runs counter to the narrative in your head, but there it is.

Really? Most analysts seem to think that Project Titan was the reason for the large and sudden increase in Apple's R&D spending. Here is an example: https://www.siliconrepublic.com/companies/apple-rd-pivot-project-titan-electric-car

This same Project Titan which BusinessInsider wrote is "'An incredible failure of leadership': Apple's car project seems wracked with internal strife."

The same Project Titan which is now dead.

Are you arguing that Apple is spending on iOS, on the iPhone, or on a new "cylindrical" computer innovation? Based on what? Methinks there is a narrative in your head and no information or arguments can change it....

 

[Analog Kid]

You have no way of knowing what Apple is focusing that R&D on because Apple obviously doesn't report it

Most analysts seem to think...

Thus proving my point.

Are you arguing that Apple is spending on iOS, on the iPhone, or on a new "cylindrical" computer innovation? Based on what?

I also have no way of knowing what they're spending it on which is why you'll notice I've made no statements of fact on the matter.

 

[normanfox]

Correct... but you might get that plan from another carrier.

You even mentioned that in the earlier comment: "if ATT did not offer the trade-in promo, they would lose customers to tmobile."

I was just explaining why the carriers give such awesome promos and discounts... it's because they'll get money from you over time as long as you stay their customer.

As you know... the carriers don't make much money on the hardware itself... that goes to Apple, Samsung, etc. The carriers instead make their money on the monthly service.

So they gotta keep you for as long as they can!

how can they keep me as long as they can? by using the hot iphone. that was the original point of my argument. you can't blame on consumers or carriers. iphone is a hot item whether you want to admit it or not.
[doublepost=1478315145][/doublepost]

Really? Most analysts seem to think that Project Titan was the reason for the large and sudden increase in Apple's R&D spending. Here is an example: https://www.siliconrepublic.com/companies/apple-rd-pivot-project-titan-electric-car

This same Project Titan which BusinessInsider wrote is "'An incredible failure of leadership': Apple's car project seems wracked with internal strife."

The same Project Titan which is now dead.

Are you arguing that Apple is spending on iOS, on the iPhone, or on a new "cylindrical" computer innovation? Based on what? Methinks there is a narrative in your head and no information or arguments can change it....

I am sure Tim Cook has leadership but it is vision that he is lacking. Jobs had leadership, vision and passion for his products. he actively involved in design and making of the product in great detail. While Tim likes to delegate to others and more involve in politics and social issues.

The Apple DNA that Tim talked about is Jobs' DNA. and to honest, you can't clone DNA.

 

[Michael Scrip]

how can they keep me as long as they can? by using the hot iphone. that was the original point of my argument. you can't blame on consumers or carriers. iphone is a hot item whether you want to admit it or not.

Yes... the iPhone is a hot phone. I didn't say it wasn't.

I was talking about WHY carriers use phones and discounts/promotions to keep customers.

The carriers will give you a great deal on a $700 phone in order to get you to pay thousands of dollars over time. Honestly... that's what they've always done.

Sorry... I didn't mean to sound like I was disagreeing with you. You're absolutely right!

 

[truthertech]

Apple spends little on R&D relative to revenue. From the tech giants, Samsung spends the most on R&D.

Notably, in the same year that Microsoft spent 13.9% of sales on R&D, Apple managed to spend only 3.3% on R&D. And it shows....

In fact, Apple is nowhere to be seen among the top dozen R&D spenders:

The uptick in Apple's R&D spending was largely focused on the now dead Project Titan ('An incredible failure of leadership': Apple's car project seems wracked with internal strife) and on the Apple Watch ("Apple Watch is a FLOP: Sales of the gadget have fallen by 90%...").

An incredible failure of leadership, indeed. But marketing still seems to work. Past laurels eventually wilt, however....

You have no idea what was spent on car project so please stop making things up. Also, why the distortion by using outdated figures? Apple has spent over $20Billion in R and D in just the past two years! Which puts them among the most in the world. Why distorting Samsung's spending by failing to point out that Samsung's R and D is spread much thinner than Apple's as Samsung is a vast conglomerate involved in vastly diverse industries such as heavy equipment, trucks, communications, appliances, chemicals, apparel, etc, and consumer electronics while Apple is almost exclusively consumer electronics.

If you need to have such distortions, maybe you should examine your claims.

 

[cmwade77]

Apple makes 10 dollars.
Samsung looses 2 dollars

Total profit is now 8 dollars.

Apples share of total profit is now 10/8 = 125%.

Sorry, but in this example Samsung cannot count as they lost $2, which means there was NO profit to count for them. Meaning Apple captured 100% in this example. You can never capture more than 100%.
[doublepost=1478320617][/doublepost]

I don't and here's why.

A few years ago, I developed a skin allergy issue. Initially, I visited several clinics near my house and they either couldn't diagnose the cause of my problem, or gave me medication that didn't work. So even though their rates were cheap, I was in effect wasting my money on treatments that were ineffectual.

Then I went to see a skin specialist upon recommendation of my friend. He was good. One look and he was able to diagnose what why problem was - Hives triggered by heat. He issued me a bottle of amphihistamines which solved the problem. His rates was higher than the previous 3 doctors combined, and the medication probably cost just a few dollars, but it solved my problem. And to me, it was money well spent.

That led me to a startling revelation - I wasn't so much paying for the medicine as I was paying for the doctor's expertise in knowing precisely which medicine to prescribe in my situation.

Same thing here with Apple. Only Apple is able to integrate their software and hardware together in a manner which offers me that unique user experience which best meets my needs. It doesn't matter that there are android smartphones which go at ½ to ⅓ the price of an iPhone, because 3 android phones combined still can't do the things I do on an iPhone, be it browse twitter via Tweetbot, or play media through my Apple TV, or get timely software updates.

That's what I am paying for when I buy an iPhone - not just raw parts, but also Apple's expertise in knowing how to put those parts together in the way I want. For example, the iPhone wasn't the first phone with a fingerprint sensor, but it's arguably the first to work right. That's what I am paying for, and I pay for it happily and willingly.

The value I get from the iPhone and the accompanying Apple ecosystem is well worth the high sticker price that I pay, both in terms of better productivity and fewer problems overall.

So no, I don't feel the least bit screwed.

Actually, Android phones CAN do all of this, just don't buy from the carriers and buy unlocked directly from the manufacturers instead and you will get a phone that gets timely updates, can do all of this and MORE. If you buy a Google Pixel, it realistically is faster and can do more than the iPhone and yes, I know what I am talking about, as an IT manager, I end up having to work with every phone out there. And let's consider the fact that you have no choice but to either jailbreak or be locked into Apple's walled garden with no possibility of installing apps not on the app store with the iPhone.

 

[macUser2007]

Thus proving my point.

I also have no way of knowing what they're spending it on which is why you'll notice I've made no statements of fact on the matter.

So, you don't know, yet you ignore the consensus of people who get paid to gather, analyze and provide such information, because it doesn't fit into your little "I Heart Apple" world. I guess, Tim Cook's and Apple's diviny lives in the gaps of your personal knowledge.

The bottom line is, even with the Project Titan increases (and debacle), Apple's R&D is still less than what the largest technology companies generally spend as portion of their revenue, or even in dollar value. But this doesn't bother you, because..., uh..., you know..., Apple is always the best.

 

[Analog Kid]

So, you don't know, yet you ignore the consensus of people who get paid to gather, analyze and provide such information, because it doesn't fit into your little "I Heart Apple" world. I guess, Tim Cook's and Apple's diviny lives in the gaps of your personal knowledge.

The bottom line is, even with the Project Titan increases (and debacle), Apple's R&D is still less than what the largest technology companies generally spend as portion of their revenue, or even in dollar value. But this doesn't bother you, because..., uh..., you know..., Apple is always the best.

I haven't ignored anything, I've said we don't have facts only opinions and rumors. You made a false claim and are now trying to buttress it with a bunch of unsupportable caveats. Why are you still arguing a point that can be factually tested by looking at annual reports?

As to my opinion of Apple, I don't think you'll find anything in our conversation here says what I am or am not ok with or that suggests Apple is the best at anything-- I'm merely correcting your incorrect statement that R&D spending has been reduced. It hasn't. That says nothing about the quality of the Apple brand which is your opinion and beyond argument.

 

[smoledman]

Tim Cook is amazing at supply chain dominance + Samsung's massive **** up.

 

[Soccertess]

Pretty simple. Imagine Apple is making 104 billion in the smartphone market, another company 20 billion, and yet another company operating at a loss of 24 billion. Total profits in the smartphone market are 100 billion.

This basically means that there are Android manufacturers that are operating at a loss in order to get cheaper phones into the market

Or more likely a manufacture had a huge lost in Q3, maybe something like a flag ship phone burn up!

 

[scoobydoo99]

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.

Are you discussing total profit or mean profit? Profit is, by definition, positive. A "negative profit" is called a loss. No one can have 104% of total profit.

 

[Abazigal]

Actually, Android phones CAN do all of this, just don't buy from the carriers and buy unlocked directly from the manufacturers instead and you will get a phone that gets timely updates, can do all of this and MORE. If you buy a Google Pixel, it realistically is faster and can do more than the iPhone and yes, I know what I am talking about, as an IT manager, I end up having to work with every phone out there. And let's consider the fact that you have no choice but to either jailbreak or be locked into Apple's walled garden with no possibility of installing apps not on the app store with the iPhone.

Which then requires me to jump through hoops just to achieve the same thing I am already getting on my iPhone.

First, I don't stay in the US, so the Pixel is a no-go.

Second, I get from my carrier because I have a corporate discount which gives me a discount on my monthly phone bill (which doesn't apply if I buy an unlocked phone and a post-paid phone plan).

Third, the iOS app store is home to apps not available on Android (such as Fantastical, Overcast, Tweetbot, 1password), something I can't get on Android and which jailbreaking my phone doesn't impact. So I am fine with being locked into Apple's walled garden because there aren't any apps I feel I am missing.

 

[Cigsm]

lol Samsung is not a competitor to Apple. Nor is google with their pixel. Samsungs flagship phone shipped only 2 million units WORLWIDE in the six weeks it was released before it was recalled. That's a day for Apple.

how? when its best competitor has been completely recalled? wait until the pixel catches up in marketing. i own a 7Plus so ive obviously given to its success, but its not an accurate picture of what could of been an what will be accounted to cooks decisions

 

[lowendlinux]

I think cheap is driving the incentive. I consider myself extremely advanced when it comes to technology but every time I hold any android phone to help people out I don't find it a very enjoyable experience.

I also don't like carriers telling me when and when I cannot upgrade to the next android OS.

You don't wait for anyone to let you do anything you do it yourself IMHO that define a tech proficient person

 

[H2SO4]

There are negative numbers.

Try this:

You have three companies in a widget category. Company A reports a profit of $100. Company B just breaks even, so profit is $0. Company C loses money, so their profit is negative, at -$4. Total profit in the category is $100+$0+(-$4)=$96. Company A made $100 in a category where $96 total profit was made. $100/$96=104.2%.

So therefore, company A made 104.2% of the total profit earned in that widget category.

P.S. Even if companies B and C hold 80% of the total widget market, this all means they're selling a lot of widgets at cost or at a loss. If I'm buying stock, I want stock in company A. If I'm buying widgets, I'd also look pretty hard at company A, because they seem to be the only ones who don't have to give their widgets away to get people to take them.

I can deal with this in three ways;
First, please look at the definition of the word profit using the dictionary on your Mac. To save you time I’ve done it for you……..;
profit |ˈprɒfɪt| noun1 a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something: record pre-tax profits | [mass noun] : his eyes brightened at the prospect of profit.
Next, Google……..;
profit
ˈprɒfɪt/
noun

1. 1.
   a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
   "record pre-tax profits"
   synonyms: financial gain, gain, return(s), payback, dividend, interest, yield, surplus, excess;More

Finally, I’ve used a physical dictionary which obviously I can't prove. Now we can at least agree that there is only so much money available to buy goods. Out of that money profit is made. If I don’t take in ALL of that money I cannot have made 100% of it.
I go back to my earlier point - This is obfuscating details for the purpose of massaging/confusing financials.

 

[admob71]

The very best smartphones deserve all the profit.

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

Oh mate, but you know they are not, the public knows they are not and the mass ammount of phone of the year awards that the s7 edge is winning/going to win shows they are not. Profit is in no way related to quality. Probably more linked to gullibility and loyalty..

 

[H2SO4]

No, you are both wrong. If I had $50 profit from selling widget X and lost $10 on widget Y, how much profit did I make? I made $40 profit. What percentage of the profit I made did product X represent? It was 125% of my profit.

While I hate the appeal to authority as a method to argue a point, I am a business professor with 20+ years of industry experience. Your example was in nominal dollars not in percentages. These financials are only confusing if you don't understand finance and accounting.

You don't sound like one, and I‘m not confused. I’m actually not bad at math and I can totally see how the figures are arrived at with ease. In fact even if I had a degree in maths, it doesn't change the fact that this method of looking at things is there for the purpose of making somebodys figures suit an agenda.
It’s like statistics, you can make them say whatever you want and still be right.

 

[admob71]

I think cheap is driving the incentive. I consider myself extremely advanced when it comes to technology but every time I hold any android phone to help people out I don't find it a very enjoyable experience.

I also don't like carriers telling me when and when I cannot upgrade to the next android OS.

I think cheap is driving the incentive. I consider myself extremely advanced when it comes to technology but every time I hold any android phone to help people out I don't find it a very enjoyable experience.

I also don't like carriers telling me when and when I cannot upgrade to the next android OS.

But you are more than happy to let Apple dictate what you can do with your device, what you can download on it, what you can't. What defaults it wants you to use, what video formats it natively forces you to use.. and so and and so on. Sounds to me like you love being told exactly what to do by a tech firm. Weird tho, it seems like.they don't trust you to make your own decisions. How does that sit with someone who professes to be tech savvy ?

 

[emm386]

stealing candy from a baby.

 

[dilbert99]

Apple makes 10 dollars.
Samsung looses 2 dollars

Total profit is now 8 dollars.

Apples share of total profit is now 10/8 = 125%.

That might be correct, but its still dumb to me even if it is correct.
Samsung made a loss, not a profit.
Apple made 10 dollars and if they were the only ones making a profit, then they made 100% of the profit.

 

[johnnygee]

Meanwhile my brother just sold his iPhone 6 and used the money towards a Galaxy S7.

...thereby adding a few pennies to Samsung's bottom line...
[doublepost=1478363802][/doublepost]

It's ok I'm sure the Android manufacturers can make it up on volume

 

[applezulu]

In all the arguing over how to work the math, the point here that seems to have been obfuscated is that Apple has a minority segment of the market, but is the only one making any money.

Legitimate arguments can be made over how much profit is too much profit. There's no arguing that the others aren't making money selling phones. Either they're bad at business, or they're taking the loss to profit elsewhere, like perhaps selling user data.

 

[H2SO4]

In all the arguing over how to work the math, the point here that seems to have been obfuscated is that Apple has a minority segment of the market, but is the only one making any money.

Legitimate arguments can be made over how much profit is too much profit. There's no arguing that the others aren't making money selling phones. Either they're bad at business, or they're taking the loss to profit elsewhere, like perhaps selling user data.

No. The math only works one way. How you interpret those figures is another thing entirely. If you can’t present the figures as they are how do you know the others are really making a loss?