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Report: iPhone grabs 32% of global handset profits in 2009 - Page 4

post #121 of 183
Quote:
Originally Posted by melgross View Post

You're welcome, except I didn't do it.

But you know the way things go around here. You are going to be blamed one way or another.
post #122 of 183
Quote:
Originally Posted by Abster2core View Post

But you know the way things go around here. You are going to be blamed one way or another.

Well, I won't deny that people have been privately mailing me about it, and that I have discussed it. But it came as a surprise to Jeff and myself.

It's possible that someone infractioned him out, and he automatically went "poof", for a while at least.
post #123 of 183
Quote:
Originally Posted by jfanning View Post

This is the problem I have, from a consumers point of view, why are people so happy for Apple (or anyone really) to be making such a large margin on these devices (products etc)?

Because the benefit I get from the device isn't coupled to the margin the company gets?

My value of the iPhone is not tied to Apple's profit. While I wouldn't mind paying less (who wouldn't?!?) unless someone can beat Apple's value proposition, why shouldn't Apple get to make more money if they are able to release a product that is priced similar to other competing products but delivers much better value?

When users start flocking to another device, perhaps then Apple might use price as a differentiator - but why should they now when they clearly have a lead on everyone else? Why shouldn't they be rewarded for that? After all, that's a major motivator to go into business - to get something in return for your effort.
post #124 of 183
Quote:
Originally Posted by melgross View Post

And where do you get the idea from that the USA is the"smallest cellphone market of them all"? Even the EU isn't one cell market, with the differing laws and such.

For reporting yes (although the middle east does pip you for bottom spot)

http://gsmworld.com/newsroom/market-...ta_summary.htm
post #125 of 183
Quote:
Originally Posted by Abster2core View Post

Even if we recognize that the analysts used the GAAP adjustment, there is no way that they can accurately forecast operating expenses directly related to any specific product.

But without a declaration of the protocol used in the report we can only assume.

Because the rest of Apple's operations (mac computers, software and ipods) are relatively straight forward and well understood as an industry --- so whatever is left is the relatively complicated iphone.

Quote:
Originally Posted by Abster2core View Post

Mark, how did you calculate the GAAP adjustments? To be accurate you would have to know the actually individual units for each of the 2 iPhones.

As well, could you peruse the RIM CSO relative to this report? http://press.rim.com/release.jsp?id=2248

Read the last chart and footnote (a):

http://www.apple.com/pr/library/2009/07/21results.html
post #126 of 183
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Originally Posted by DocNo42 View Post

Because the benefit I get from the device isn't coupled to the margin the company gets?

So do you get twice the benefit of a device that costs half as much?
post #127 of 183
Quote:
Originally Posted by jfanning View Post

For reporting yes (although the middle east does pip you for bottom spot)

http://gsmworld.com/newsroom/market-...ta_summary.htm

The problem is that they count SIM cards --- the rest of the world are dominated by prepaid and basically everybody have multiple SIM cards in their desk drawers. You can't have mobile penetration rate of 120-130% without double and triple counting.

US and Canada are postpaid dominated --- which means that their numbers are more accurate to the actual people count.
post #128 of 183
Quote:
Originally Posted by jfanning View Post

So do you get twice the benefit of a device that costs half as much?

No - but that's my point - the two aren't coupled at all.

While it would be nice to pay half as much, I'm more then willing to pay the current prices because they are more than worth it to me.

I'm paying less for my iPhone then I was paying for my POS Treo with Sprint. Want to talk about getting ripped off!
post #129 of 183
Quote:
Originally Posted by jfanning View Post

For reporting yes (although the middle east does pip you for bottom spot)

http://gsmworld.com/newsroom/market-...ta_summary.htm

That's an odd definition. It doesn't break it down by markets, just by an arbitrary definition of area.

Japan is a "market", China is a "market", The USA is a "market".

What they show are world "regions". Those aren't markets.
post #130 of 183
Quote:
Originally Posted by samab View Post

The problem is that they count SIM cards --- the rest of the world are dominated by prepaid and basically everybody have multiple SIM cards in their desk drawers. You can't have mobile penetration rate of 120-130% without double and triple counting.

US and Canada are postpaid dominated --- which means that their numbers are more accurate to the actual people count.

They don't count SIM cards, if they did the CDMA market would be a bit hard to account for...

And the carriers disconnect those unused cards after a set time, so they are not counted any more. There are other ways of getting over 100% penetration, company phones, data devices etc. They are still users on the network, and should still be counted
post #131 of 183
Quote:
Originally Posted by DocNo42 View Post

No - but that's my point - the two aren't coupled at all.

So, you are saying that if you purchased a device that was half the price of the iPhone, it would still be giving you a similar benefit as the iPhone?
post #132 of 183
Quote:
Originally Posted by melgross View Post

That's an odd definition. It doesn't break it down by markets, just by an arbitrary definition of area.

Japan is a "market", China is a "market", The USA is a "market".

What they show are world "regions". Those aren't markets.

Don't blame me, i didn't create the table. But at the end of the day, Canada/USA only makes up 7% of the worlds cellphone connections
post #133 of 183
Quote:
Originally Posted by jfanning View Post

So do you get twice the benefit of a device that costs half as much?

You have to show that equivalent devices cost substantially less. You can't discuss the phones in a vacuum as you are doing. how much does the N97 go for unlocked? The Pre? The Storm2, the top Blackberry, whichever that is. What about the top phones from the other dozen or so companies.

Compare the prices, and then come back.
post #134 of 183
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Originally Posted by JeffDM View Post

Well, first, there's being a dick, and then there's aggravated dickery.

LOL! Understood.

Quote:
Originally Posted by JeffDM View Post

Political outsider is its the site's cesspool. I don't remember if a non-member can even see that. I'm pretty sure Lundy would rather do away with that place if he could.

I agree. Perhaps that forum should be renamed "The Cesspool." The few times I've waded into that muck, I always felt dirty afterwards.
post #135 of 183
Quote:
Originally Posted by jfanning View Post

Don't blame me, i didn't create the table. But at the end of the day, Canada/USA only makes up 7% of the worlds cellphone connections

It doesn't matter. Europe is about the same once you break out the different countries laws and networks. Maybe smaller.

You might as well include Mexico in the USA/Canada make-up. So much of this is meaningless.

What would be interesting, and more important on several levels, is to know what the VALUE of each market is.
post #136 of 183
Quote:
Originally Posted by jfanning View Post

So, you are saying that if you purchased a device that was half the price of the iPhone, it would still be giving you a similar benefit as the iPhone?

Only if it delivered the same or significantly better experience then the iPhone.

That experience is the hardware, software and the way they are integrated - it's not just some checklist of features or the cost of the handset.
post #137 of 183
Quote:
Originally Posted by DocNo42 View Post

Only if it delivered the same or significantly better experience then the iPhone.

That experience is the hardware, software and the way they are integrated - it's not just some checklist of features or the cost of the handset.

In other words, you don't know and you are now justifying your purchase?
post #138 of 183
Quote:
Originally Posted by jfanning View Post

Don't blame me, i didn't create the table. But at the end of the day, Canada/USA only makes up 7% of the worlds cellphone connections

And "connections" are defined as SIM cards --- which is a self-serving statistic by the GSMA.

Canada/US as a market is a lot larger than those statistics said --- those 300 million connections are real connections because they are basically all postpaid.
post #139 of 183
Quote:
Originally Posted by melgross View Post

You have to show that equivalent devices cost substantially less. You can't discuss the phones in a vacuum as you are doing. how much does the N97 go for unlocked? The Pre? The Storm2, the top Blackberry, whichever that is. What about the top phones from the other dozen or so companies.

Compare the prices, and then come back.

I'm not, I asked if the experience he/she was getting from their current phone was twice that of a phone priced half as much. I haven't mentioned a brand there, it was the other user that stated they had an iPhone.

I know for a fact if I was going to purchase an iPhone today, it would cost 4 times what my current phone cost, and the monthly charges would be 2-3 times as high as my current charges. Would I can that much benefit from the iPhone, no I wouldn't, but I am not saying that others will feel the same way.
post #140 of 183
Quote:
Originally Posted by melgross View Post

It doesn't matter. Europe is about the same once you break out the different countries laws and networks. Maybe smaller.

You might as well include Mexico in the USA/Canada make-up. So much of this is meaningless.

What would be interesting, and more important on several levels, is to know what the VALUE of each market is.

Actually I believe is included in the Americas figure.

And what does it matter if they group Europe together (they actually have it split in two), they group other regions together as well.
post #141 of 183
Quote:
Originally Posted by samab View Post

And "connections" are defined as SIM cards --- which is a self-serving statistic by the GSMA.

Canada/US as a market is a lot larger than those statistics said --- those 300 million connections are real connections because they are basically all postpaid.

Try again, you are wrong.
post #142 of 183
Quote:
Originally Posted by jfanning View Post

I'm not, I asked if the experience he/she was getting from their current phone was twice that of a phone priced half as much. I haven't mentioned a brand there, it was the other user that stated they had an iPhone.

I know for a fact if I was going to purchase an iPhone today, it would cost 4 times what my current phone cost, and the monthly charges would be 2-3 times as high as my current charges. Would I can that much benefit from the iPhone, no I wouldn't, but I am not saying that others will feel the same way.

To each their own. but I'm talking about comparing like to like. That's really the only way one can compare valueif you're looking to the same kind of product.

If your needs are less, then much cheaper phones and services are a better choice.
post #143 of 183
Quote:
Originally Posted by jfanning View Post

Actually I believe is included in the Americas figure.

And what does it matter if they group Europe together (they actually have it split in two), they group other regions together as well.

It's just that regions are not markets. What about Japan? That's a separate market? So is Australia.

It's clear that Mexico isn't included in the N. American region of Canada and the US. I don't know why the region isn't broken up with it. It should be the way they've done it otherwise. It's just an arbitrary regional makeup and ranking. It means little.

For example, where's Russia? That's also its own market.

How about Turkey? They consider themselves to be part of Europe?

These breakdowns are nuts.
post #144 of 183
Quote:
Originally Posted by melgross View Post

It's just that regions are not markets. What about Japan? That's a separate market? So is Australia.

It's clear that Mexico isn't included in the N. American region of Canada and the US. I don't know why the region isn't broken up with it. It should be the way they've done it otherwise. It's just an arbitrary regional makeup and ranking. It means little.

For example, where's Russia? That's also its own market.

How about Turkey? They consider themselves to be part of Europe?

These breakdowns are nuts.

How about you go to the GSMA and talk to them about it, I didn't come up with the regions.

but looking at the regions, I was guess that Japan and Australia are in Asia Pacific, and Turkey/Russia in East Europe
post #145 of 183
Quote:
Originally Posted by jfanning View Post

How about you go to the GSMA and talk to them about it, I didn't come up with the regions.

but looking at the regions, I was guess that Japan and Australia are in Asia Pacific, and Turkey/Russia in East Europe

I think Turkey is in the Middle Eastern region. Otherwise, it seems as though there are too many connections there.

Whatever, right?
post #146 of 183
Quote:
Originally Posted by jfanning View Post

Try again, you are wrong.

How am I wrong?

GSMA is a lobbying group for the GSM manufacturers --- whose job is to make GSM look good. Their statistics are self-serving.

It is a fact that Canada and US have more than 50% of their subscibers are on CDMA carriers --- they don't even have SIM cards, so there is ZERO possibility that they will have double counting for those subscribers. It is a fact that Canada and US are dominated by postpaid subscribers --- both on CDMA and GSM --- so they don't have SIM cards lying around in their desk drawers that gets top up once every 6 months to keep their telephone numbers alive.

The numbers for Canada and US are much more accurate than the rest of the world --- which means that the North America is under-represented in the statistics.
post #147 of 183
Quote:
Originally Posted by melgross View Post

I think Turkey is in the Middle Eastern region. Otherwise, it seems as though there are too many connections there.

Whatever, right?

Asia Pacific is a huge aggregate population, probably about as many people as all the other regions combined, but they're all lumped under one entry.

Looking at the figures, it's not terribly off except for Europe. Elsewhere, it's between 0.5 and 1 "connection" per person. So I guess it's a very rough measure of population. Europe looks to be 2:1, supposedly averaging two devices per person.

I think it's more than a little self-serving to break up every iteration of CDMA into six signal types, but every iteration of GSM simply gets counted as GSM (EDGE, HSDPA, WTFDPA, etc is just GSM). It would seem that the GSM numbers should be good enough that they shouldn't need to feel so insecure as to need to break down the numbers of the competition like that while consolidating their own numbers.
post #148 of 183
Quote:
Originally Posted by samab View Post

How am I wrong?

GSMA is a lobbying group for the GSM manufacturers --- whose job is to make GSM look good. Their statistics are self-serving.

Quote:
About Us

The GSMA represents the interests of the worldwide mobile communications industry. Spanning 219 countries, the GSMA unites nearly 800 of the worlds mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA is focused on innovating, incubating and creating new opportunities for its membership, all with the end goal of driving the growth of the mobile communications industry.

Oh, it is for operators as well, so this one place you were wrong.

Quote:
The numbers for Canada and US are much more accurate than the rest of the world --- which means that the North America is under-represented in the statistics.

If you are not happy with the numbers, talk to the GSMA about, their contact details are on the site.
post #149 of 183
Quote:
Originally Posted by jfanning View Post

Oh, it is for operators as well, so this one place you were wrong.

If you are not happy with the numbers, talk to the GSMA about, their contact details are on the site.

But where am I exactly wrong with my original statement?
post #150 of 183
Quote:
Originally Posted by JeffDM View Post

Asia Pacific is a huge aggregate population, probably about as many people as all the other regions combined, but they're all lumped under one entry.

Looking at the figures, it's not terribly off except for Europe. Elsewhere, it's between 0.5 and 1 "connection" per person. So I guess it's a very rough measure of population. Europe looks to be 2:1, supposedly averaging two devices per person.

I think it's more than a little self-serving to break up every iteration of CDMA into six signal types, but every iteration of GSM simply gets counted as GSM (EDGE, HSDPA, WTFDPA, etc is just GSM). It would seem that the GSM numbers should be good enough that they shouldn't need to feel so insecure as to need to break down the numbers of the competition like that while consolidating their own numbers.

They count SIM cards as connections, not devices.

This is a very old article back in 2002 --- counting SIM cards were estimated to give you a 20% over-count in mobile penetration.

http://www.businessweek.com/magazine...3/b3776013.htm

Of course, that was before all those MVNO's springing up, may have even more over count now.

Basically the only statistics you can trust are the US/Canada (where basically 80-90% of their subscribers are postpaid) and Japan/South Korea (where most people still think only criminals would use prepaid cell phones). Co-incidentally, those 4 countries are where the CDMA users are populated.
post #151 of 183
Quote:
Originally Posted by jfanning View Post

The iPhone doesn't cost $199, never has, never will

You full well know we know what we mean when we reference that price.

There's no need to play word games; just state what it is you want to say.
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post #152 of 183
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Originally Posted by Abster2core View Post

Even if we recognize that the analysts used the GAAP adjustment, there is no way that they can accurately forecast operating expenses directly related to any specific product.

But without a declaration of the protocol used in the report we can only assume.

But Apple has also provided non-GAAP adjustments for direct costs associated with iPhone/AppleTV.

So yes, we can't split Apple's R&D and SG&A among Apple products. And Apple doesn't show us the non-deferred quarter's operating costs.

But you should read Turley Muller's analysis of current deferred and non-current deferred costs to see how one might be able to deduce the margin. As I said before, he comes up with higher margins than Sacconaghi.

http://financial-alchemist.blogspot....bstantial.html

This was reported here on AI back on 7/29. I didn't read the forum for that article so I don't know if you objected then as well.
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post #153 of 183
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Originally Posted by jfanning View Post

I'm not, I asked if the experience he/she was getting from their current phone was twice that of a phone priced half as much. I haven't mentioned a brand there, it was the other user that stated they had an iPhone.

I know for a fact if I was going to purchase an iPhone today, it would cost 4 times what my current phone cost, and the monthly charges would be 2-3 times as high as my current charges. Would I can that much benefit from the iPhone, no I wouldn't, but I am not saying that others will feel the same way.

I have had my iPhone 3GS for about a month, and I can absolutely say that we (incl my family) are getting a benefit that is worth more than the $47 extra (vs staying with my previous phone without a data plan). How do I arrive at $50 as the value/cost threshold? Phone cost about $320 (incl tax.) Split over 24 months, so that's $13.33/month. (With such low interest rates, the cost of the $320 is negligible on a monthly basis over 24 months.) Add in the $30 data plan plus additional taxes, or approx $33. Rounded, that makes $47/month. With my previous phone, I never used it except to make phone calls; everything else was a huge hassle - several layers of menus and clicks just to do anything.

Suppose I got a different phone for free (like a Blackberry Curve) but also with a $30 data plan. Then the difference is $13.33 per month (actually would be almost $1 less as I'd have had to buy a microSD card). I've used a Blackberry for work and so I can compare, and once again, I'm sure that my family has received a value worth more than $12.50 during this past month.

The apps have made a huge difference - especially the games (mostly free for now) and the apps that make accessing web services so much easier. And for those things where the Blackberry also has the same feature (like music, camera, video, web access), the large screen and ease of use of the iPhone makes it so much better and fun, and for us, much more likely to use.
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post #154 of 183
Quote:
Originally Posted by JeffDM View Post

Asia Pacific is a huge aggregate population, probably about as many people as all the other regions combined, but they're all lumped under one entry.

Looking at the figures, it's not terribly off except for Europe. Elsewhere, it's between 0.5 and 1 "connection" per person. So I guess it's a very rough measure of population. Europe looks to be 2:1, supposedly averaging two devices per person.

I think it's more than a little self-serving to break up every iteration of CDMA into six signal types, but every iteration of GSM simply gets counted as GSM (EDGE, HSDPA, WTFDPA, etc is just GSM). It would seem that the GSM numbers should be good enough that they shouldn't need to feel so insecure as to need to break down the numbers of the competition like that while consolidating their own numbers.

It really is odd, but I suppose that's to be expected. What they are going to say when the various flavors of "4G" come out is anyone's guess.

But I believe that China has more than one standard. It isn't "just" GSM.

But j's point was to show that the USA was the smallest market. The chart, of course, doesn't show that at all.
post #155 of 183
Quote:
Originally Posted by Abster2core View Post

Mark, how did you calculate the GAAP adjustments? To be accurate you would have to know the actually individual units for each of the 2 iPhones.

As well, could you peruse the RIM CSO relative to this report? http://press.rim.com/release.jsp?id=2248

I didn't calculate the GAAP adjustments; they were provided by Apple in its press release (and I'm sure it's in the 10Q or 10K). To be accurate, Apple refers to them as non-GAAP adjustments, as they adjust the GAAP figures to provide the non-GAAP statements. As samab said (and for once we agree!), the adjustment backs out the deferred income from previous quarters and adds in the actual revenue from the current quarter.

Apple also provides a cost of sales non-GAAP adjustment which backs out deferred costs from previous quarters and adds in the actual costs for the current quarter. So one can get a glimpse of the proportional iPhone/AppleTV costs associated with the revenue. And the margins are huge. (I think we can all agree that the AppleTV revenue is really small relative to iPhone revenue.) And this is what the Financial Alchemist link I provided earlier looks at.

I looked at the RIM report; I'm not sure what you wanted me to see. RIM claims 40% margin overall; their report does not break out the margins for devices (83%) vs services (13%) vs software (2%). Services and software should have higher margins. But since devices is dominant, one might guestimate that the gross margins for devices is in the high 30s.
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post #156 of 183
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Originally Posted by mark2005 View Post

I didn't calculate the GAAP adjustments; they were provided by Apple in its press release (and I'm sure it's in the 10Q or 10K). To be accurate, Apple refers to them as non-GAAP adjustments, as they adjust the GAAP figures to provide the non-GAAP statements. As samab said (and for once we agree!), the adjustment backs out the deferred income from previous quarters and adds in the actual revenue from the current quarter.

Apple also provides a cost of sales non-GAAP adjustment which backs out deferred costs from previous quarters and adds in the actual costs for the current quarter. So one can get a glimpse of the proportional iPhone/AppleTV costs associated with the revenue. And the margins are huge. (I think we can all agree that the AppleTV revenue is really small relative to iPhone revenue.) And this is what the Financial Alchemist link I provided earlier looks at.

Non-GAAP is much simpler to calculate. It's the GAAP numbers that are manipulated. Non-GAAP is just reporting of current sales and income.
post #157 of 183
Quote:
Originally Posted by jfanning View Post

Just because the data plans are in industry norms doesn't mean you are not getting ripped off there as well.

And I guess you are referring to the USA, the smallest cellphone market of them all, there are other markets that sell data for a lot less than the US, and the iPhone take off is much smaller than the US.

Where I live the iPhone is overpriced, the data plans are very overpriced. This is not limited to the iPhone, as other brands are selling for a similar price. Will I buy one, no, they would have to half in price (unsubsidised) before I would look at that. Will I get a dataplan, no, they would have to half in price before I would look at that.

It is a consumers right to refuse to buy something, this argument is not limited to Apple, there are many an industry in the same position with excessive pricing.

By the same token, in the US, we get ripped off every time we open our mouths to eat or rent/buy a place to live in. Because in Vietnam or Thailand or India, the same food item or the same size/quality house is seriously cheaper... But I don't think the people over there think they're getting a good price either.

And in Europe, they get ripped off whenever they use their cars.

This is one twisted argument trying to be made.
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post #158 of 183
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Originally Posted by jfanning View Post

In other words, you don't know and you are now justifying your purchase?

Huh? Of course I know. And justify my purchase to who? You? That would be funny if it wasn't so pathetic.
post #159 of 183
Quote:
Originally Posted by melgross View Post

If your needs are less, then much cheaper phones and services are a better choice.

Unless you want to be overly pedantic on an Internet message board....
post #160 of 183
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Originally Posted by DocNo42 View Post

Unless you want to be overly pedantic on an Internet message board....

I don't always understand what some people are arguing about. I like to compare two things that are about the same in their attempt to serve the same potential customer.

Sometimes we get someone who doesn't want (or can't afford) the higher prices or rates, and so they argue that they don't make good economic sense. Sometimes it takes a while to get what they're saying sorted out, because of that. So we're arguing past one another.
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