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Apple may make more profit selling one Mac than HP does from 7 PCs - Page 2

post #41 of 188
Quote:
Originally Posted by island hermit View Post

That logo tells me that making computers wasn't the only thing that the two Steves were doing in that garage ...

...They were doing apple cider? Because that's Newton under a tree...

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #42 of 188
Quote:
Originally Posted by ClemyNX View Post

This only shows how Apple makes their products too expensive.

If they were too expensive, there would be little or no profit, as the market would reject them. Since they do make such profits, they seem to have priced the products well.

Their responsibility in this area (profitability) is to their stockholders, to maximize profits, not to you or me
post #43 of 188
Without reading through all the I hate Apple and I love Apple comments, I'd just like to point out that as far as this article goes, I could add "If my aunt had balls, she'd be my uncle!"

Anyone else bothered by how made up all these numbers are??? A lot of assumptions and speculations. Wasted article and wasted cyberspace.
post #44 of 188
Quote:
Originally Posted by shovelheadrider72 View Post

What about the operating systems? I am sure that HP is having to pay for Windows where as Apple is including the operating system for free.

That's not how it works. It depends on whether the Software Group is treated as a Cost Center or a Profit Center. In either case, I assure you that the Software Development Group has to pay it's own way and therefore the computer has to absorb the software cost. Nothing is " free " .
post #45 of 188
Quote:
Originally Posted by winstein2010 View Post

HP is giving away computers so it can get its profit from selling services, accessories, software, and inks and toners.

Apple get high margin from hardware but gives out free software and services like iCloud for free or at minimum cost.

nicely put. my thoughts exactly. this is what I hate when people break down the cost of the components that go into an apple product and say how overpriced it is. what they don't realize is that it's a lot more than just the hardware that contributes to the cost. aside from the R&D, which i'm sure is substantial, there are all the included "free" products such as ilife and icloud as well as the service you get from apple stores/genius bars/etc. And now the next major release of Mac OS (Lion) is only $30. I'm sure they spent more than that developing the OS, but they sell it for cheap in order to push their hardware.

I read that the itunes store operates at cost and doesn't return a profit. why? because it sells hardware. apple has done a good job building an eco-system that makes using their technology easy. Yes, apple still makes a healthy profit, but I doubt is as dramatic as people make it out to me.
post #46 of 188
To those who complaining about Apple prices,

DELL can higher their products price anyime BUT you guys wonder why they don't?
post #47 of 188
Quote:
Originally Posted by scottyo View Post

If they were too expensive, there would be little or no profit, as the market would reject them. Since they do make such profits, they seem to have priced the products well.

Their responsibility in this area (profitability) is to their stockholders, to maximize profits, not to you or me

Sadly, many readers here have zero understanding of what it means to run a business.

The few who do are often AAPL shareholders as well as Apple customers.
post #48 of 188
Quote:
Originally Posted by makingdots View Post

To those who complaining about Apple prices,

DELL can higher their products price anyime BUT you guys wonder why they don't?

Because their stuff is complete trash and no one would pay higher prices for them, while Apple's stuff has actual worth and therefore people will pay more for something they deem more valuable?

Just throwing that out there.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #49 of 188
Interesting... How does it fare against DELL?
I've accomplished my childhood's dream: My job consists mainly of playing with toys all day long.
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I've accomplished my childhood's dream: My job consists mainly of playing with toys all day long.
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post #50 of 188
As a Stockholder, I am happy.

As a customer, I feel ripped off.

In the end, it is all about perceived value. We bought these Apple Products because we thought it was a good deal.
post #51 of 188
It all boils down to a focused product line, mass purchasing skills, superb marketing and tight operating costs. Using its billions to buy vast quantities of parts and resources and then carefully managing inventory..... all result in great profit margins to be envied by all.

Classic example is the iPad..... extremely price competitive.

MacBook Air is going to be a another classic, just as all the other portable products. For the money equally equipped PC's are more expensive.....

The race to the bottom on price is killing the PC makers one at a time.

Next up is software.... I would not want to compete with Apple on price in that arena... Microsoft is about to be crushed.... it will not be pretty... ask Nokia or RIM in the telephone space and you will better understand the Apple way to conquering a market.... next up will be Apple TV, which is a saturated market about to be blown out of the water and if you were a cable service, I'd be shaking in my boots at what lies ahead.
post #52 of 188
In this industry I would pick profit over volume every time!
I would think after a certain point, more volume becomes more a burden. More volume leaves you less flexible, less responsive and more fragile to unexpected shifts like the sudden introduction of a new phenom device. Volume can buy you only so much leverage, but profit can pump right back into development and innovation.
post #53 of 188
Quote:
Originally Posted by ClemyNX View Post

This only shows how Apple makes their products too expensive.

I came here for this and was far from disappointed to see this as the first comment.

Worth noting though is that while Apple has a nice healthy margin, Microsoft's margin is even higher.
post #54 of 188
Quote:
Originally Posted by xSamplex View Post

Just because they sell these things (with like a 9% market share) does not mean they are fairly priced. They are expensive, and that is reflected in the market share.

I'm continually baffled by this argument and keep coming back to the conclusion that our 'entitlement' mentality is now influencing most thought. There is no such thing as a 'fair' price. How would it ever by defined? A person has no real idea of the COGS (costs of goods sold) of a product but they do know what it's value is to them. This is a good thing as COGS is only 1 component of the value of a product or service. Design is one component that is not (usually) in COGS but contributes mightily to the value of a product. Customer service is another. The comparison in this article well demonstrates that there are contributors to value other than COGS.

Apple products carry extra value, for a segment of the market, that increases significantly their 'fair price' (i.e. the price someone is willing to pay) for that segment. This leads to the industry leading margins that Apple produces. This is what the graph basically shows.

A company's goal is not to maximize market share, but profit. Only to the extent the market share is required to maximize profit is it important. In the PC industry for GP computing, once your market share is large enough to support a vibrant developer community increasing market share at the expense of direct profit, is no long critical. At that point you want to make sure you price matches the value you provide to your customers. If you lower you price you may (probably will) attract more customers but maybe not enough to make up for the lost margin.

Apples financial again and again show they understand this almost perfectly.
post #55 of 188
Bright future for the young guy who crunched these numbers.

But something that has been overlooked is that Apple found a second way to win while "losing" the PC wars. Don't fight them, go around them. The iPad is the new PC.
A.k.a. AppleHead on other forums.
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A.k.a. AppleHead on other forums.
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post #56 of 188
Quote:
Originally Posted by ClemyNX View Post

This only shows how Apple makes their products too expensive.

That's a valid personal opinion, but it's obviously not backed up by the market. If they were too expensive, people would not buy them. If they were ridiculously overpriced, they would be punished in sales. Compared against any other single hardware manufacturer (not "all of Windows"), they are doing quite well. Unit sales are in the same ballpark, with profit significantly higher.

I agree that their price is higher than the dirt-cheap $300, $500 machines you can get. But they're also worth more IMO.
post #57 of 188
Quote:
Originally Posted by Gonsalvesd View Post

That's not how it works. It depends on whether the Software Group is treated as a Cost Center or a Profit Center. In either case, I assure you that the Software Development Group has to pay it's own way and therefore the computer has to absorb the software cost. Nothing is " free " .

Internally yes, but these numbers are being created by an analyst from consolidated results, so they will certainly include the share from OS-X - there's simply no way for an analyst to separate the OS profits from the hardware profits.
post #58 of 188
Quote:
Originally Posted by Jims1973 View Post

Anyone else bothered by how made up all these numbers are??? A lot of assumptions and speculations. Wasted article and wasted cyberspace.

Since none of these companies reveal detailed costs per individual product, one needs to make a few assumptions anyhow.

What's notable here is the young author's fairly conservative and reasonable analysis, which exceeds the efforts and logic of many professional analysts (e.g., Wu, Munster, Huberty, Gartner).

In any case, one makes many assumptions and speculations in life, whether it's selecting a dish off a restaurant menu, buying a movie ticket, applying for a job, or asking someone to marry you.

There is no way to analyze anything down to the last molecule.
post #59 of 188
Quote:
Originally Posted by physguy View Post

I'm continually baffled by this argument and keep coming back to the conclusion that our 'entitlement' mentality is now influencing most thought. There is no such thing as a 'fair' price. How would it ever by defined? A person has no real idea of the COGS (costs of goods sold) of a product but they do know what it's value is to them. This is a good thing as COGS is only 1 component of the value of a product or service. Design is one component that is not (usually) in COGS but contributes mightily to the value of a product. Customer service is another. The comparison in this article well demonstrates that there are contributors to value other than COGS.

Agree for the most part, except with your assertion that COGS is a component of value. It's not. Value, like beauty, is in the eye of the beholder and has nothing to do with how hard the maker had to work to create something.
post #60 of 188
The gross profit is wrong on apple stuff.
People seems to forget that Apple makes loads of money from their money "in the bank". The 70 billion Apple have loose.

Apples gross profit without money is 22%. With money it is 32%.

Other companies have larger gross profit then Apple: Marvel, Intel and so on.
And of course, there are companies whit less gross profit: AMD, HP and so on.

To many incompetent expert that forget that Apple have 70 billion in the bank that generates large profits. If Apple closed everything today they would still make about 15 billion just from their cash.
post #61 of 188
Expensive is dictated by the market. Apple has tripled its sales in the last five years. It clearly is moving product. Further, if you compare similar equipped models, Apple's prices are very competitive.

This type of comparison also assumes it costs Apple and HP the same amount of money to make a computer. It probably costs Apple less. First, Apple doesn't have to pay for a Windows license as Apple makes the OS. Second, Apple probably pays less then companies like HP does for marketing cost to move a PC. Third, I wouldn't be surprised if Apple pays less for parts as it often prepays and can use its leverage from buying parts for iPods and iPhones to get better prices for Mac related parts.

Further, Apple never engaged in the race to the bottom strategy Dell and HP have. Those companies in their struggle to gain market share have cut margins to the point of being unhealthy.

Quote:
Originally Posted by ClemyNX View Post

This only shows how Apple makes their products too expensive.
post #62 of 188
Quote:
Originally Posted by bettieblue View Post

That "blog post" was written by a 15 year old.

It compares Apple to a single Windows PC vendor. Compare it to all of them and see if volume ends up making more money?

Writing a blog post off of another blog post written by a 15 year old makes the "AI staff" look like a collection of Morons.

I think it is interesting, and obviously, so do a lot of other people. Rude.
post #63 of 188
Quote:
Originally Posted by scottyo View Post

If they were too expensive, there would be little or no profit, as the market would reject them. Since they do make such profits, they seem to have priced the products well.

Their responsibility in this area (profitability) is to their stockholders, to maximize profits, not to you or me

Except his next argument is "That is only because the Apple fanboys are willing to give both their arms to buy anything with a shiny fruit logo on it"......and we all know you can´t argue with that.....
post #64 of 188
Quote:
Originally Posted by ClemyNX View Post

This only shows how Apple makes their products too expensive.

Should we give you the benefit of the doubt and assume this is sarcasm? Because if you are serious that's one of the most stupid, idiotic posts ever conceived by an Apple hater.
post #65 of 188
deleted
post #66 of 188
And I'd rather give my money to Apple then to any PC maker. but I still want a Mac between the Mini and the Mac Pro. I want Apple to make some money selling me a headless mid range Mac.
post #67 of 188
Quote:
Originally Posted by shompa View Post

The gross profit is wrong on apple stuff.
People seems to forget that Apple makes loads of money from their money "in the bank". The 70 billion Apple have loose.

Apples gross profit without money is 22%. With money it is 32%.


Must be lovely to be so ignorant. I suggest taking Accounting 101.


Quote:
To many incompetent expert that forget that Apple have 70 billion in the bank that generates large profits. If Apple closed everything today they would still make about 15 billion just from their cash.

Idiotic
post #68 of 188
Quote:
Originally Posted by shompa View Post

To many incompetent expert that forget that Apple have 70 billion in the bank that generates large profits. If Apple closed everything today they would still make about 15 billion just from their cash.

Wow, where is this bank?
post #69 of 188
Those were the best spent 1,500 usd ever, and it is gonna stay with me for a looong time.

Have fun with your XP Dell...
I've accomplished my childhood's dream: My job consists mainly of playing with toys all day long.
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I've accomplished my childhood's dream: My job consists mainly of playing with toys all day long.
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post #70 of 188
Quote:
Originally Posted by AppleInsider View Post

By comparison, HPs Personal Systems Group brought in $9.415 billion in revenue and turned a profit of $533 million last quarter. The PC maker's operating margin, which doesnt factor in overhead costs, came in at 5.66%.

I would certainly like to see where he got the average price of HP's computers and just how many boxes the sold out of all the other items available in the division.

Quote:
HP Personal Systems Group (PSG), a division of Hewlett-Packard, provides desktop and notebook personal computers, workstations, handheld computers, calculators, software, and accessories. It markets both HP and Compaq-branded products to consumer and commercial customers. Its digital entertainment products include media center PCs, optical storage drives, and flat-panel televisions. PSG oversees HP's small and medium-size business (SMB) and commercial reseller channels, as well as volume direct sales of commercial PCs and entry-level to mid-range servers.

http://www.hoovers.com/company/HP_Pe...rckfxif-1.html
post #71 of 188
Quote:
Originally Posted by jacobo007 View Post

Wow, where is this bank?

You're telling me. I'd love an interest rate like that.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #72 of 188
Quote:
Originally Posted by RedRaider2011 View Post

macs may be expensive, but they are not overpriced. apple is only in the business of making premium computers so you cannot compare a mac to an entry level hp, or dell, or any other oem. if you compare a mac to another premium computer you will find that they are fairly priced. anyhow i would rather pay a little extra for a mac knowing the profit apple makes off me will go to research in innovation and new products whereas hp will just pocket your money and continue to put out crap

this is very true, except in a single area, the cost of upgrading components... upgrade from 2 --> 4 GB of laptop ram is $90, i can get the same ram for under 40.... that not fair.

but people should remember exactly what he said

PC means personal computer.  

i have processing issues, mostly trying to get my ideas into speech and text.

if i say something confusing please tell me!

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PC means personal computer.  

i have processing issues, mostly trying to get my ideas into speech and text.

if i say something confusing please tell me!

Reply
post #73 of 188
Quote:
Originally Posted by Supreme View Post

You get what you pay for. I'd rather pay a premium for a quality product than go the cheap route in the short term but pay for it in the long run (virus, software, time lost, upkeep, etc.)

All of the people and family I know of who are new to OSX say it is a dream compared to Windows... and they usually can't believe they waited so long to switch.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #74 of 188
It all does not matter people. This is just to shove it to Apple competitors. More fuel to their dismay and disdain.
post #75 of 188
Quote:
Originally Posted by ranReloaded View Post

Interesting... How does it fare against DELL?

HP's net income is 7.21%. Dell's net income is 5.26%. Apple's net income is 22.36%.

My guess is Apple is making more money selling one Mac than Dell does from nine, maybe ten PCs.
Quote:
Originally Posted by Joseph L View Post

The HP sales were of their consumer machines. The low end, presumably. Presumably, the Apple sales include both the MacBook Pro and their high end workstations. But not enough info is given to even know what was compared.

This is a high-school kid, and very little information is given about his methodology.

Actually, the kid linked to HP's financial documents.

HP's Personal System Division includes everything but the big iron (ProLiant and Integrity), which falls into their Enterprise Server, Storage, and Network Division.

The kid's analysis is a very reasonable comparison between the two companies' product lines as Apple does not have blade server racks. It is not an apples-and-oranges (sorry about the pun) failure.
post #76 of 188
For those arguing this is an example of the Apple tax, your argument is fundamentally flawed.

The article is comparing all HP computers versus all Apple computers for dollar profit.

Apple doesn't sell $299 computers with razor thin margins.

The question you should ask yourself is what is the dollar profit for HP on comparably priced computers.

Using the largest selling model for Apple:

The low end iMac starts at $1199 and goes up to $1999. Do you really think HP only makes $52 on comparably priced computers really, I mean really do you?
just waiting to be included in one of Apple's target markets.
Don't get me wrong, I like the flat panel iMac, actually own an iMac, and I like the Mac mini, but...........
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just waiting to be included in one of Apple's target markets.
Don't get me wrong, I like the flat panel iMac, actually own an iMac, and I like the Mac mini, but...........
Reply
post #77 of 188
Quote:
Originally Posted by cloudgazer View Post

Internally yes, but these numbers are being created by an analyst from consolidated results, so they will certainly include the share from OS-X - there's simply no way for an analyst to separate the OS profits from the hardware profits.

Does not matter what the OS costs, it is made by Apple. HP and the cloners have to pay a huge Microsoft tax on every PC sold, Apple gets to pay itself furthering their profits.

Say you take two computers which cost the same...

cost + HP mark-up + Microsoft tax = cost of cloner pc
cost + Apple mark-up = cost of Mac

So of course Apple makes more per computer than the cloners, there is no Microsoft tax
post #78 of 188
Quote:
Originally Posted by shompa View Post

The gross profit is wrong on apple stuff.
Apples gross profit without money is 22%. With money it is 32%.

http://www.apple.com/pr/library/2011/04/20results.html

Gross margin for that quarter, 10.2 Billion - operating income 7.8 billion. Now go away and google what gross margin and operating income mean - you'll find that they exclude investment income.

Quote:
Other companies have larger gross profit then Apple: Marvel, Intel and so on.
And of course, there are companies whit less gross profit: AMD, HP and so on.

Intel - gross margin of 8billion and operating income of 4.3 billion for the last quarter. That would be less.
Marvel? The comic firm? Are you on drugs?

Quote:
To many incompetent expert that forget that Apple have 70 billion in the bank that generates large profits. If Apple closed everything today they would still make about 15 billion just from their cash.

If Apple managed to make 15BN off 70BN annually then Apple would be an amazingly good money manager, that would be a 21.4% return!

In fact Apple made around 300mil in 2010 off their then 50billion cash pile. They are extremely conservative in their investments, primarily being either US federal debt or blue chip corporate debt.
post #79 of 188
That's not their niche. Apple is more interested in being a quality leader whatever form that may be....

This means they are not interested in selling their products to the poor or the underprivileged which is most likely why they never donate any of their profits.
post #80 of 188
The article says how much total profit HP made last quarter ($533 million) but does not mention how much total profit Apple made. It instead requires the reader to do the math. That's odd.

Please update the AppleInsider app to function in landscape mode.

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Please update the AppleInsider app to function in landscape mode.

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