The 16GB iPhone is NOT a ripoff

[Fl0r!an]

Lets do some math.

For FY2014 -
Apple Revenue - $183 billion
Apple Profit - $39 billion
Profit margin - 21.3%

iPhone revenue was $100 billion last year

So lets say iPhone has 30% profit margin.
$100 billion x 30% profit margin = $30 billion profit

That leaves only $9 billion in profit for the rest of the company.
That leaves only a 11% profit margin for the rest of the company ( $9 billion / $83 billion)

Do you seriously think Apple only makes 11% profit on iPad, Mac, App Store combined? No way on earth they make that little.

If we adjust the iPhone profit margin to 25% than the rest of the products make 17% profit margin. That is much more realistic.

Conclusion: iPhone profit margin is somewhere between 25%-30%. But highly unlikely that it is 30% or even 28-29%

It doesn't make much sense to calculate a per product profit margin. Business guys like to do that, but it only as little 'real' interpretation. The reason is that a lot of R&D expenses are shared between all iOS devices and there'll be lots of synergy effects with watchOS and OS X which can't be easily expressed in numbers.
Business guys tend to ignore that as they don't know anything about R&D.

Besides that... Are you really justifying apples attempts to maximize their profits? (fanboy level: over 9000 )
In the end it's a commercial company, and of course they'll try to make as much money as possible. They don't give a flying f*ck if their business decisions are good for their customers, they'll just do what earns most money.
And charging +$100 for very little extra hardware expense is obviously a good deal for them. And as long as enough people are happy getting ripped of like that Apple will continue to do so.

 

[warrior2000]

You seem to have a habit of deflecting point or putting words into people's mouth. I never said it was 'way better'. I simply said there is a difference. I don't need to quote any articles as I never read them anyway. I used my own eyes.

This is what it's all about, personal opinion. In my opinion the screen in the S6 edge is the bmw and the iPhone 6 screen is the Kia.

Edit: person above me has posted an article anyway.

still does not prove a normal person would see the difference. Its obvious you are a technie. Both the iPhone6 and S6 are retina quality screens. I doubt a normal person could tell the difference.

In fact this article shows normal people can't tell the difference between 1080p and QuadHD unless they put the phone closer than normal viewing distance.
http://www.phonearena.com/news/Quad...an-people-actually-see-the-difference_id69856

And QuadHD screen drains more battery and strains the GPU. Apple made the right decision.

 

[C DM]

A person who has a 32GB phone vs a 16GB is more likey to store personal stuff on the business phone.

Plus I'm sure corps monitor company phones. It takes longer to scan/monitor a 32GB phone than a 16GB phone. Assuming both are almost full.

Like I said before, lots of assumptions, most of which are simply not the reality.

 

[Pez555]

still does not prove a normal person would see the difference. Its obvious you are a technie. Both the iPhone6 and S6 are retina quality screens. I doubt a normal person could tell the difference.

Don't know but I bet normal people would notice some things.

I actually think you have a lot of good points but personally I do think 16gb isn't enough these days.

 

[lugworm]

OP is an Apple employee, right ?

 

[warrior2000]

It doesn't make much sense to calculate a per product profit margin. Business guys like to do that, but it only as little 'real' interpretation. The reason is that a lot of R&D expenses are shared between all iOS devices and there'll be lots of synergy effects with watchOS and OS X which can't be easily expressed in numbers.
Business guys tend to ignore that as they don't know anything about R&D.

Nope its plain as day.

The article that I said was bullcrap said iPhone profit margins was 39%.
Apple had $102 billion in Revenue last year and $39 billion in profit.
So if we use the 39% profit margin from the article than the iPhone made $39 billion in profit last year and the rest of the company made $0.

Total and utter bullcrap.

 

[rotohead]

It doesn't make much sense to calculate a per product profit margin. Business guys like to do that, but it only as little 'real' interpretation. The reason is that a lot of R&D expenses are shared between all iOS devices and there'll be lots of synergy effects with watchOS and OS X which can't be easily expressed in numbers.
Business guys tend to ignore that as they don't know anything about R&D.

Besides that... Are you really justifying apples attempts to maximize their profits? (fanboy level: over 9000 )
In the end it's a commercial company, and of course they'll try to make as much money as possible. They don't give a flying f*ck if their business decisions are good for their customers, they'll just do what earns most money.
And charging +$100 for very little extra hardware expense is obviously a good deal for them. And as long as enough people are happy getting ripped of like that Apple will continue to do so.

Exactly, Apple is a business first and foremost. They're in it to make money, not to better the world, or make people's lives better despite all their PR and marketing spin. Not spending a little more to raise the bottom tier iPhones to32GB is a purely financial decision that they're going to do as long as they can. I can't see it affecting them negatively anytime soon since most people will simply choose the mid-tier(64GB) version. I doubt there are many people who would jump ship to Android simply because of the storage space.

Apple will raise the lower tier 16GB to 32GB when the cost to produce the chips come down in price where it's the same or negligible to their bottom line, OR there is so much backlash against apple about this that they're literally forced to do it to prevent any damage to their company image, thus affecting their bottom line. My money's on the former, not the latter. Apple MAY up the storage for the iPhone 7 release, and everyone will love Apple for being the awesome, generous company that they are for finally listening to their customers. -_-

 

[warrior2000]

OP is an Apple employee, right ?

So I'm an employee since I said the 16GB iPhone is not a ripoff?

Does that mean the 100,000,000 people who bought 16GB iPhones the last 2 years are Apple employees also?

Why is it so hard to understand that something could be a 'ripoff' to one person and a great value to another?

 

[Surf Donkey]

still does not prove a normal person would see the difference. Its obvious you are a technie. Both the iPhone6 and S6 are retina quality screens. I doubt a normal person could tell the difference.

I would agree with you there.....case in point:

 

[C DM]

So I'm an employee since I said the 16GB iPhone is not a ripoff?

Does that mean the 100,000,000 people who bought 16GB iPhones the last 2 years are Apple employees also?

Why is it so hard to understand that something could be a 'ripoff' to one person and a great value to another?

Because 32 GB as the base would be of even greater value to that same person. That line of argument holds no water whatsoever. It keeps on being pointed out repeatedly, but conveniently being ignored, also repeatedly. Pretty much sums up this whole long thread.

 

[lugworm]

So....you are an employee, simply toeing the company line.

 

[Skoal]

We don't lose ANYTHING if it's backed up to a Mac.

Unless something happens to the Mac

 

[Skoal]

You seem to have a habit of deflecting point or putting words into people's mouth. I never said it was 'way better'. I simply said there is a difference. I don't need to quote any articles as I never read them anyway. I used my own eyes.

This is what it's all about, personal opinion. In my opinion the screen in the S6 edge is the bmw and the iPhone 6 screen is the Kia.

Edit: person above me has posted an article anyway.

Despite what the tech says I cannot perceive much difference if at all in the screen comparisons.

 

[Four oF NINE]

Unless something happens to the Mac

The Mac is backed up to iCloud and Time Capsule.. and by the way, what's a crash?

 

[oldmacs]

Nope its plain as day.

The article that I said was bullcrap said iPhone profit margins was 39%.
Apple had $102 billion in Revenue last year and $39 billion in profit.
So if we use the 39% profit margin from the article than the iPhone made $39 billion in profit last year and the rest of the company made $0.

Total and utter bullcrap.

Product margins on the iPhone are estimated to be up to between 45 to 69 percent.

http://www.smh.com.au/digital-life/...-least-69-per-cent-report-20140924-10ld37.htm

http://mashable.com/2014/09/23/teardown-iphone-6-costs-200/#lErZBiOaHukc

http://fortune.com/2014/09/23/morgan-stanley-chinas-favorite-iphone-is-apples-most-profitable/

 

[oldmacs]

I explained this already.

The A5 cannot do touchID, ApplePay, 64 bit games, and who knows what else Apple has in store.

You missed the point. That stuff does not matter to a lot of people so why does Apple waste its product margins on it - That is the argument you make with the 16 GB of storage, so why can't you understand the same argument when its used in a different area?

 

[masotime]

I'm amazed people are still posting in this thread. I don't see anything constructive coming out of doing so....

 

[oldmacs]

Why offer something that would/could be completely overkill to enterprise operations? Most ops that are needed:

VPN - done.
Mail - done.
RDP client - done.
Apps for sales - done.
Office Communicator client - done.

That, along with the OS push you over 8GB, but well and truly under 16GB. 32 would be more than what is needed for most enterprise operations, and if managed properly by IT, not even used at all. So wasted space on a properly controlled and centrally managed device would be money wasted by a company's budget, not a win for both.

BL.

Apple should offer 16GB to enterprise only then.

Or jave a base of 32GB, because how on earth would that be a negative to enterprise? By the way, I know at least two people who have a company supplied iPhone, and both have a 64GB iPhone 6.

 

[oldmacs]

I'm amazed people are still posting in this thread. I don't see anything constructive coming out of doing so....

You're probably very right there... Just wanted to respond to my notifications

 

[warrior2000]

Product margins on the iPhone are estimated to be up to between 45 to 69 percent.

http://www.smh.com.au/digital-life/...-least-69-per-cent-report-20140924-10ld37.htm

http://mashable.com/2014/09/23/teardown-iphone-6-costs-200/#lErZBiOaHukc

http://fortune.com/2014/09/23/morgan-stanley-chinas-favorite-iphone-is-apples-most-profitable/

Those are total BS guesses.

I already showed you UNDENIALBE PROOF that those margins are lies.

Again read the SEC filing. It says plain as day the iPhone had $102 billion in revenue last year.
http://yahoo.brand.edgar-online.com...ex=2&dcn=0001193125-14-383437&nav=1&src=Yahoo

So you say the iPhones profit margin is 45%?
So take the iPhone revenue of $102 billion and multiply by 45%.
That gives you iPhone profits as $46 billion in profits.

One problem. The SEC report shows that TOTAL APPLE profits was $39 billion.

So if the estimate on those articles are correct than the rest of the products (iPad, Mac, ect) LOST $7 billion last year. Does that make any sense? HELL NO.

I think you are confusing Gross Margins with Profit Margins. Gross Margins do not include overhead expenses and taxes.

Apple's profit margin for last year was 21%. That just proves that Apple is not GREEDY. Hell, even my brothers business has a higher profit margin than 21%. Its just that Apple sells so much volume.

 

[geoff5093]

Warrior just give up already, you clearly lost your argument.

 

[Fl0r!an]

It all depends on the way you split up expenses which are common to multiple products, or if you break them down at all.

Obviously a great part of Apples R&D expenses is for software, which will make it's way into all products, from a Watch through an iPhone, iPod and iPad to a Mac. There's no single, correct way to break theses expenses down to a single device. For example, you could assume Apple had a software devision making profit with App Store sales and paying software R&D expenses. In total, this devision would generate a huge loss, while all hardware divisions (e.g. iPhone) would have huge profit margins because they're getting their software for 'free'.

This is just a different interpretation of things, not any more correct or false.
So it doesn't make much sense to argue about iPhone profit margins, since there's neither a standardized way to calculate it nor you have all necessary numbers from Apple.

 

[warrior2000]

It all depends on the way you split up expenses which are common to multiple products, or if you break them down at all.

Obviously a great part of Apples R&D expenses is for software, which will make it's way into all products, from a Watch through an iPhone, iPod and iPad to a Mac. There's no single, correct way to break theses expenses down to a single device. For example, you could assume Apple had a software devision making profit with App Store sales and paying software R&D expenses. In total, this devision would generate a huge loss, while all hardware divisions (e.g. iPhone) would have huge profit margins because they're getting their software for 'free'.

This is just a different interpretation of things, not any more correct or false.
So it doesn't make much sense to argue about iPhone profit margins, since there's neither a standardized way to calculate it nor you have all necessary numbers from Apple.

You still don't get it. It doesn't matter how you allocate expenses or split expenses it is impossible for the iPhone to have a 45% profit margin.

Again below are FACTS that cannot be disputed. They come straight from Apple filings with the SEC

FACT: iPhone had $102 billion in revenue last year
FACT: Apple as a company had $39 billion in profit last year

So if you say the iPhone's profit margin was 45% then:

$102 billion in iPhone revenue x 45% profit margin = $46 billion in iPhone profit last year

Only one problem with the iPhone making $46 billion in profit last year.
THE ENTIRE COMPANY ONLY MADE $39 BILLION IN PROFIT LAST YEAR SO IT IS IMPOSSIBLE THAT THE IPHONE MADE $46 BILLION BY ITSELF. THE ONLY WAY THAT IS TRUE IS IF THE OTHER PRODUCTS LOST $7 BILLION LAST YEAR.

My whole point is 45% profit margin for the iPhone is ridiculous and absolutely false.

 

[warrior2000]

Warrior just give up already, you clearly lost your argument.

No I'm not wrong. You just don't understand. Which is fine. You probably are not a finance professional.

 

[Shanghaichica]

No it's not a rip off. No one is forcing you to buy 16GB. For many 16GB is more than enough and of it's not you have the option of buying a device with more storage. Also you don't have to buy an iPhone you can always buy another smartphone.