or Connect
AppleInsider › Forums › Investors › AAPL Investors › iPhone 5s launch expected to boost Apple's gross margins to nearly 40%
New Posts  All Forums:Forum Nav:

iPhone 5s launch expected to boost Apple's gross margins to nearly 40%

post #1 of 99
Thread Starter 
Historically, 'S' versions of Apple's iPhone lineup have led to stronger margins than full-fledged redesigns. That's why one analyst expects the newly released iPhone 5s to push Apple's gross margins toward 40 percent in the coming quarters.

Margins


Maynard Um of Wells Fargo Securities expects that December corporate gross margins for Apple could reach 39.6 percent. And in the following March quarter, he expects decreases in warranty accruals to potentially push margins as high as 40 percent.

If his prediction proves accurate, it would be the first time since September of 2012 that Apple's company-wide margins exceeded 40 percent. Gross margin took a hit last fall after the launch of the iPhone 5, with a complete product redesign, as well as the competitively priced iPad mini.

Apple's margins have shown a clear trend of dipping after the launches of the iPhone 3G, iPhone 4, and iPhone 5. But they have also increased following the debuts of the iPhone 3GS and iPhone 4S.

The company's highest point came in the second fiscal quarter of 2012, following the debut of the iPhone 4S, when margins peaked at 47.4 percent. Since then, they have fallen to 36.9 percent in the third quarter of fiscal 2013.

If Apple can increase its margins north of 40 percent once again, Um believes it would help to dispel fears among investors about high-end smartphone commoditization. The analyst also believes Apple has plenty of room to expand its iPhone lineup, as it currently has just 280 carrier partners, compared to 650 for BlackBerry at its peak.

Wells fargo has reiterated its "outperform" rating for AAPL stock, with a valuation range of between $525 and $575 per share.
post #2 of 99

There appears to be no general consensus among the analysts on what Apple is doing or where it is going. So when in doubt, they are negative.

 

This implies that Apple is still doing a good job at secrecy (from the supply chain to product development).

post #3 of 99
AI, filling the gap again while waiting for some relevant news, are we?
post #4 of 99

Only at Apple. If another company spent $400 million on IP for one feature of an "s" revision, they'd be sunk.

 

At Apple, its water under the bridge, and we're talking increased gross margins. 

 

I was concerned that Touch ID was so expensive for Apple to get going that they'd be hesitant to roll it out into cheaper iOS products (like all of the iPads) until they recouped some of that loss....but we haven't heard anything to that effect....just the opposite.

post #5 of 99

This guy seems to be more accurate than most, but the takeaway I get from any article where he is involved boils down to this:

 

'Um' = Best.  Name.  Ever.  For an analyst.

post #6 of 99
That sounds reasonable
post #7 of 99

Increased margins was a HUGE part in the decision to bring out the 5C.  Very smart move.  Last year the 5 was selling great but the 4/4S combined were capturing almost 45% of the iPhone sales.  That hurt margins big time because both are still very expensive to make.  With the 5C Apple is able to offer a 'new' phone and protect its margins.  If Apple kept their same strategy (using 1 and 2 year old phones) the $100 cheaper 5 would kill their margins big time.  The 5 would be about the same cost to produce but would sell at $100 less.  I think the main lesson Apple learned last year is that many people are willing to buy a 1 year old phone that looks similar as the flagship (4S) but with lower specs for $100 cheaper.  Now the mid-tier phone looks very different from the flagship.  This will cause more people to pay the extra $100.  Very smart by Apple.

 

If you look at units sales for iPhone/iPad they were up significantly in 2012.  Yet their profits were close to flat.  Margins had to increase.  Now I'm wondering how will Apple increase margins with the iPads?  Will they make an iPadMini Plastic without Retina and keep it at $329 and then an iPadMini Retina at $399?  Will they introduce a bigger iPad starting at $599?

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #8 of 99
This analysis seems to have been done factoring in only the iPhone. The trend in tablets appears to be decreasing ASPs, and Apple seems particularly vulnerable because they're selling more and more iPad minis versus some of the most expensive tablets in the industry. Until the details, including pricing, are made available for the next generation of iPads, I wouldn't trust these numbers.
post #9 of 99
Quote:
Originally Posted by AppleInsider View Post

Historically, 'S' versions of Apple's iPhone lineup have led to stronger margins than full-fledged redesigns. That's why one analyst expects the newly released iPhone 5s to push Apple's gross margins toward 40 percent in the coming quarters.

Let's see. Apple says it will be at the high end of the 36-37% range. Some analyst who doesn't have access to Apple's financials says it will be 40%.

Hmmm... who to believe? 1smoking.gif
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
post #10 of 99
Quote:
Originally Posted by sog35 View Post

Increased margins was a HUGE part in the decision to bring out the 5C.  Very smart move.  Last year the 5 was selling great but the 4/4S combined were capturing almost 45% of the iPhone sales.  That hurt margins big time because both are still very expensive to make.  With the 5C Apple is able to offer a 'new' phone and protect its margins.  If Apple kept their same strategy (using 1 and 2 year old phones) the $100 cheaper 5 would kill their margins big time.  The 5 would be about the same cost to produce but would sell at $100 less.  I think the main lesson Apple learned last year is that many people are willing to buy a 1 year old phone that looks similar as the flagship (4S) but with lower specs for $100 cheaper.  Now the mid-tier phone looks very different from the flagship.  This will cause more people to pay the extra $100.  Very smart by Apple.

If you look at units sales for iPhone/iPad they were up significantly in 2012.  Yet their profits were close to flat.  Margins had to increase.  Now I'm wondering how will Apple increase margins with the iPads?  Will they make an iPadMini Plastic without Retina and keep it at $329 and then an iPadMini Retina at $399?  Will they introduce a bigger iPad starting at $599?

Another option is lower margins compensated for by higher sales.
I wanted dsadsa bit it was taken.
Reply
I wanted dsadsa bit it was taken.
Reply
post #11 of 99
Quote:
Originally Posted by asdasd View Post


Another option is lower margins compensated for by higher sales.

 

isn't that Android's strategy? 

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #12 of 99
Quote:
Originally Posted by sog35 View Post
 

Increased margins was a HUGE part in the decision to bring out the 5C.

 

I asked Tim about this last week and he said that is bullshit. The decision was made because Jony has always wanted to see what he could design with plastic.

Hmmmmmm...
Reply
Hmmmmmm...
Reply
post #13 of 99
Quote:
Originally Posted by sog35 View Post
 

 

isn't that Android's strategy? 

 

Apart from the fact that Android is an operating system and can't really have it's own strategy, I suppose the answer to your question is a resounding no; that's a very simplistic view of what's happening.

 

Google's strategy is to spread Android far and wide, lock people into its ecosystem and profit, primarily, but not exclusively, from advertising to those customers.  

 

Various OEMs have very different strategies and some are going to fail, HTC for example, is looking very weak right now.  Others have hit upon a winning formula.  Samsung, is flooding the global market with a broad range of phones (and other devices) at various price points and are using what might be called a shotgun approach.  They're also very good at imitating quickly, something I know most folks here rightly get annoyed about.  That being said, their approach is working very well not only in the west, but also China and India; markets that others, Apple included, are having a great deal of difficulty in penetrating.  A novel approach is being taken by Xiaomi, who sell good quality hardware at cost and make their profits off post sale services and product sales (somewhat like Amazon).  There are a few OEMs who compete almost entirely on price, but they're not well known here; companies like Coolpad in China or Micromax in India, but we're talking about phones as low as $50 unsubsidized!

 

The point being that each OEM has a different strategy, and Apple has to factor in all these competitors in each market they enter.  I'd say, so far, they're doing pretty well. 


Edited by JamesMac - 10/8/13 at 7:27am
post #14 of 99
Quote:
Originally Posted by JamesMac View Post
 

 

Apart from the fact that Android is an operating system and can't really have it's own strategy, I suppose the answer to your question is a resounding no; that's a very simplistic view of what's happening.

 

Google's strategy is to spread Android far and wide, lock people into its ecosystem and profit, primarily, but not exclusively, from advertising to those customers.  

 

Various OEMs have very different strategies and some are going to fail, HTC for example, is looking very weak right now.  Others have hit upon a winning formula.  Samsung, is flooding the global market with a broad range of phones (and other devices) at various price points and are using what might be called a shotgun approach.  They're also very good at imitating quickly, something I know most folks here rightly get annoyed about.  That being said, their approach is working very well not only in the west, but also China and India; markets that others, Apple included, are having a great deal of difficulty in penetrating.  A novel approach is being taken by Xiaomi, who sell good quality hardware at cost and make their profits off post sale services and product sales (somewhat like Amazon).

 

The point being that each OEM has a different strategy, and Apple has to factor in all these competitors in each market they enter.  I'd say, so far, they're doing pretty well. 

 

Chasing sales and low margins is a losers game.  Every single phone manufacter that sells cheap phones is losing money except for Samsung.  And Samsung is on a downward path because they have barriers that won't allow them to copy the 5S (fingerprint, 64bit, iOS7).  Just watch Samsung's mobile division go into the toilet the next 12 months as Chinese brands will kill them in Asia.

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #15 of 99
Quote:
Originally Posted by sog35 View Post
 

 

Chasing sales and low margins is a losers game.  Every single phone manufacter that sells cheap phones is losing money except for Samsung.  And Samsung is on a downward path because they have barriers that won't allow them to copy the 5S (fingerprint, 64bit, iOS7).  Just watch Samsung's mobile division go into the toilet the next 12 months as Chinese brands will kill them in Asia.

 

Yup... they're just killing Samsung...

 

http://business.financialpost.com/2013/10/04/samsung-electronics-cos-wide-array-of-smartphones-drives-record-profit-as-htc-stumbles/?__lsa=0daa-a1c4

Hmmmmmm...
Reply
Hmmmmmm...
Reply
post #16 of 99
Quote:
Originally Posted by sog35 View Post
 

 

Chasing sales and low margins is a losers game.  Every single phone manufacter that sells cheap phones is losing money except for Samsung.  And Samsung is on a downward path because they have barriers that won't allow them to copy the 5S (fingerprint, 64bit, iOS7).  Just watch Samsung's mobile division go into the toilet the next 12 months as Chinese brands will kill them in Asia.

 

Sony just reported a small operating profit in their mobile division and Xiaomi has just turned profitable, so there are others.  But I take your point that this is a hard market to make money in as inevitably we move towards commoditization.  

 

I don't agree with your latter statement.  Of course IOS is unique to Apple, but a 64 bit processor isn't that meaningful to the masses, and for Samsung, one of the worlds largest fabs, to license this from ARM and produce it is not particularly difficult.  The fingerprint reader is widely available on Lenovo laptops and again isn't particularly hard to replicate.  I'd suggest that curved screens are going to be one of the next innovations and Samsung and LG are likely ahead of others.

post #17 of 99

 

notice they did not breakdown Samsungs mobile profits?  Profits are up because of their chip fab operations.  It will take a few quarters but Samsung mobile profits will drop.  Why would anyone pay $600 for a copycat phone when you can get a chinese copycat phone for $200?  Notice the article mentions they can't survive on the flagship phone alone?  Welcome to plunging margins Samsung as you are now competing against chinese manufacters. 

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #18 of 99
Quote:
Originally Posted by island hermit View Post
 
Quote:
Originally Posted by sog35 View Post
 

 

Chasing sales and low margins is a losers game.  Every single phone manufacter that sells cheap phones is losing money except for Samsung.  And Samsung is on a downward path because they have barriers that won't allow them to copy the 5S (fingerprint, 64bit, iOS7).  Just watch Samsung's mobile division go into the toilet the next 12 months as Chinese brands will kill them in Asia.

 

Yup... they're just killing Samsung...

 

http://business.financialpost.com/2013/10/04/samsung-electronics-cos-wide-array-of-smartphones-drives-record-profit-as-htc-stumbles/?__lsa=0daa-a1c4

 

Maybe you can't read, and that's a pity, but the guy is right.

Samsung will have an awesome quarter thanks to other businesses. Their smartphone growth is close to being over, and that's ok.

 

Anyway, if Apple wants more profits and revenue, they need another iPhone line with a bigger screen, but doing 10 billions per quarter is good too. A bigger iPhone, a bigger iPad, kill the cMBP, make a retina 17" and that's an awesome start to be even more profitable and have more revenue.

 

But the time to get to other areas of interest is coming closer (if they want growth).

post #19 of 99
Quote:
Originally Posted by JamesMac View Post
 

 

Sony just reported a small operating profit in their mobile division and Xiaomi has just turned profitable, so there are others.  But I take your point that this is a hard market to make money in as inevitably we move towards commoditization.  

 

I don't agree with your latter statement.  Of course IOS is unique to Apple, but a 64 bit processor isn't that meaningful to the masses, and for Samsung, one of the worlds largest fabs, to license this from ARM and produce it is not particularly difficult.  The fingerprint reader is widely available on Lenovo laptops and again isn't particularly hard to replicate.  I'd suggest that curved screens are going to be one of the next innovations and Samsung and LG are likely ahead of others.

 

small operating profits dont cut it for Apple.  No one is making decent profits except Samsung/Apple.

 

64-bit for Samsung will be difficult unless Android adapts 64-bit.  A 64-bit processor with a 32-bit OS is useless.  I don't think Google is in any rush to move to 64-bit with Android.  If producing a 64-bit chipset was so easy why didn't anyone do it before Apple?

 

Have you ever tried the Lenovo fingerprint readers?  they suck.  They are slow and lock out users far to often. 

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #20 of 99
Quote:
Originally Posted by pedromartins View Post
 

 

Maybe you can't read, and that's a pity, but the guy is right.

Samsung will have an awesome quarter thanks to other businesses. Their smartphone growth is close to being over, and that's ok.

 

for some reason Islandhermit has made it his personal goal in life to contradict every thing i say here.  i have no idea why.  I think its because i called  him out for bashing Apple for not bring out a $250 phone.

 

its true samsung is growing profits....... in chip manufactuering thanks to Apple.  But their mobile division is struggling and losing traction to Chinese manufacters.

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #21 of 99
Quote:
Originally Posted by sog35 View Post
 
Quote:
Originally Posted by pedromartins View Post
 

 

Maybe you can't read, and that's a pity, but the guy is right.

Samsung will have an awesome quarter thanks to other businesses. Their smartphone growth is close to being over, and that's ok.

 

for some reason Islandhermit has made it his personal goal in life to contradict every thing i say here.  i have no idea why.  I think its because i called  him out for bashing Apple for not bring out a $250 phone.

 

its true samsung is growing profits....... in chip manufactuering thanks to Apple.  But their mobile division is struggling and losing traction to Chinese manufacters.

 

Yes sometimes the guy goes berserk but he usually has something interesting to say. He contributes more for some discussions than, let's say, me.

post #22 of 99
Quote:
Originally Posted by sog35 View Post
 

 

for some reason Islandhermit has made it his personal goal in life to contradict every thing i say here.  i have no idea why.  I think its because i called  him out for bashing Apple for not bring out a $250 phone.

 

its true samsung is growing profits....... in chip manufactuering thanks to Apple.  But their mobile division is struggling and losing traction to Chinese manufacters.

 

Quote:
Originally Posted by sog35 View Post
 

 

for some reason Islandhermit has made it his personal goal in life to contradict every thing i say here.  i have no idea why.  I think its because i called  him out for bashing Apple for not bring out a $250 phone.

 

its true samsung is growing profits....... in chip manufactuering thanks to Apple.  But their mobile division is struggling and losing traction to Chinese manufacters.

 

Can you please point me towards the data you're referencing?  Which Chinese manufacters [sic] are you referring to?

post #23 of 99
Quote:
Originally Posted by sog35 View Post
 

 

small operating profits dont cut it for Apple.  No one is making decent profits except Samsung/Apple.

 

64-bit for Samsung will be difficult unless Android adapts 64-bit.  A 64-bit processor with a 32-bit OS is useless.  I don't think Google is in any rush to move to 64-bit with Android.  If producing a 64-bit chipset was so easy why didn't anyone do it before Apple?

 

Have you ever tried the Lenovo fingerprint readers?  they suck.  They are slow and lock out users far to often. 

 

Agreed, and I'm sure Sony would agree with you too!  They're working on it.

 

Apparently, Google is working on it and some are even speculating that Kit Kat may be 64 bit.  You won't like my answer, but I suspect that no one else introduced 64 bit support because it's not really necessary, and it's a bit of a gimmick.  ARMV8 was more important, and Apple did very well in introducing this first and they deserve kudos for getting it out first.

 

Yes, I agree, Lenovo fingerprint readers don't work that well.  If the market wants fingerprint readers, you can bet that Samsung and everyone else will have them.

post #24 of 99
Quote:
Originally Posted by sog35 View Post

for some reason Islandhermit has made it his personal goal in life to contradict every thing i say here.  i have no idea why.  I think its because i called  him out for bashing Apple for not bring out a $250 phone.

its true samsung is growing profits....... in chip manufactuering thanks to Apple.  But their mobile division is struggling and losing traction to Chinese manufacters.

Are people disagreeing with you on the Internet, diddums.

He's a more interesting poster than most "Apple is always right" drones most of whom don't have any skin - stock - in the game. I have no idea why non stock holders obsess about margin, but they do.
I wanted dsadsa bit it was taken.
Reply
I wanted dsadsa bit it was taken.
Reply
post #25 of 99
Quote:
Originally Posted by JamesMac View Post
 

 

Agreed, and I'm sure Sony would agree with you too!  They're working on it.

 

Apparently, Google is working on it and some are even speculating that Kit Kat may be 64 bit.  You won't like my answer, but I suspect that no one else introduced 64 bit support because it's not really necessary, and it's a bit of a gimmick.  ARMV8 was more important, and Apple did very well in introducing this first and they deserve kudos for getting it out first.

 

Yes, I agree, Lenovo fingerprint readers don't work that well.  If the market wants fingerprint readers, you can bet that Samsung and everyone else will have them.

Isn't armv8 important because it is 64 bit?

post #26 of 99
Quote:
Originally Posted by JamesMac View Post
 

 

Agreed, and I'm sure Sony would agree with you too!  They're working on it.

 

Apparently, Google is working on it and some are even speculating that Kit Kat may be 64 bit.  You won't like my answer, but I suspect that no one else introduced 64 bit support because it's not really necessary, and it's a bit of a gimmick.  ARMV8 was more important, and Apple did very well in introducing this first and they deserve kudos for getting it out first.

 

Yes, I agree, Lenovo fingerprint readers don't work that well.  If the market wants fingerprint readers, you can bet that Samsung and everyone else will have them.

 

People said the same thing when PC's went 64 bit.  Not important.......right. 

 

It won't be easy to have a fingerprint reader.  Unlike Siri Apple owns the tech they are using on the 5S. 

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #27 of 99
Quote:
Originally Posted by JamesMac View Post

Apparently, Google is working on it and some are even speculating that Kit Kat may be 64 bit.  You won't like my answer, but I suspect that no one else introduced 64 bit support because it's not really necessary, and it's a bit of a gimmick.  ARMV8 was more important, and Apple did very well in introducing this first and they deserve kudos for getting it out first.



Yeah, it's a gimmick. A gimmick that allows Apple's A7 to outperform competitior's products with twice as many cores and 70% higher clock speeds.

Don't count on Kit Kat being 64 bit. If it were going to be, we'd have heard about it already. Even if it were, the fragmented Android infrastructure and lack of quality development tools would ensure that it would be years before most apps get converted, anyway.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
post #28 of 99
Quote:
Originally Posted by sog35 View Post
 

 

for some reason Islandhermit has made it his personal goal in life to contradict every thing i say here.  i have no idea why.  I think its because i called  him out for bashing Apple for not bring out a $250 phone.

 

its true samsung is growing profits....... in chip manufactuering thanks to Apple.  But their mobile division is struggling and losing traction to Chinese manufacters.

 

Their mobile division is struggling? Read the report. The mobile division has increased its operating profit.

Hmmmmmm...
Reply
Hmmmmmm...
Reply
post #29 of 99
Quote:
Originally Posted by island hermit View Post
 

 

Their mobile division is struggling? Read the report. The mobile division has increased its operating profit.

 

Dude those are ANALyst estimations based on unit sales.  Samsung DID NOT report mobile operating profits.

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #30 of 99
Analysts are ridiculous. They say silly things like, Apple is dead among teens.

Pfft. Teens love Apple! And Android's biggest user group in the US at least is older people. Androids are elderphones.

Analysts say, smart phones have reached their saturation point in the market.

Pfffft. Apple has plenty of marketshare to take from Android. And apple is taking big bites right now.

Analysts say, Apple can't innovate any more!

Pfffft. Apple has innovative new products and a new iOS and a new OSX.

Analysts say... Well... Who cares what they say?

Why do people still listen to Analysts??!!
post #31 of 99

Consider the following statements:

 

Wow, I'm really thrilled that my toilet paper manufacturer has a 40% gross profit margin.

It really shows that the high-end toilet paper market is flourishing!

 

These statements are absurd, right?

Why would I want my toilet paper maker to make absurd profits?

It would mean that I was being over-charged, right?

 

Why are you rooting for you cell phone maker to over-charge you?

post #32 of 99
Quote:
Originally Posted by brians View Post
 

Consider the following statements:

 

Wow, I'm really thrilled that my toilet paper manufacturer has a 40% gross profit margin.

It really shows that the high-end toilet paper market is flourishing!

 

These statements are absurd, right?

Why would I want my toilet paper maker to make absurd profits?

It would mean that I was being over-charged, right?

 

Why are you rooting for you cell phone maker to over-charge you?

 

Since they are the only ones innovating and competitors price inferior products at the same price, how are they overpricing, no matter how much net profit they have?

post #33 of 99
Quote:
Originally Posted by brians View Post
 

Consider the following statements:

 

Wow, I'm really thrilled that my toilet paper manufacturer has a 40% gross profit margin.

It really shows that the high-end toilet paper market is flourishing!

 

These statements are absurd, right?

Why would I want my toilet paper maker to make absurd profits?

It would mean that I was being over-charged, right?

 

Why are you rooting for you cell phone maker to over-charge you?

 

toilet paper is a commodity.  They are basically the same thing, we buy what's cheapest.

 

Computing devices are not commodities.  So you want Apple to sell cheap crap?  You want Apple to have low margins so they no longer can provide excellent customer service and spend money on R&D?  You either get Apple or you don't.  You can't expect to get a premium product at a non-premium price.  Hundreds of millions of people are willing to pay a little extra to get the best.  High margins insure that Apple sells the best year after year.

 

Its takes TONS OF MONEY to develop game changing products.  That's what Apple does.  Other companies like SAMDUNG simply copy

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #34 of 99
Quote:
Originally Posted by sog35 View Post
 

 

Dude those are ANALyst estimations based on unit sales.  Samsung DID NOT report mobile operating profits.

 

I showed you something that says Samsung's mobile division is not struggling... so I guess you will have to show me something that says Samsung's mobile division is struggling.

 

I mean... c'mon, back up your statements at the very least.


Edited by island hermit - 10/8/13 at 9:08am
Hmmmmmm...
Reply
Hmmmmmm...
Reply
post #35 of 99
Quote:
Originally Posted by sog35 View Post
 

 

for some reason Islandhermit has made it his personal goal in life to contradict every thing i say here.  i have no idea why.  I think its because i called  him out for bashing Apple for not bring out a $250 phone.

 

Uh... maybe it's because you are wrong. I know you believe yourself to be 100% right about everything... but, you're not.

 

ie. I never ever said anything about a $250 phone. 

Hmmmmmm...
Reply
Hmmmmmm...
Reply
post #36 of 99
Quote:
Originally Posted by jragosta View Post


Yeah, it's a gimmick. A gimmick that allows Apple's A7 to outperform competitior's products with twice as many cores and 70% higher clock speeds.

Don't count on Kit Kat being 64 bit. If it were going to be, we'd have heard about it already. Even if it were, the fragmented Android infrastructure and lack of quality development tools would ensure that it would be years before most apps get converted, anyway.

 

Woah, slow down.  The A7 is one fantastic bit of engineering, and if anything, I'd say SOC design is one of Apple's key strengths.  The move to a new ISA as part of ARMV8, plus hardware cryptography account for most of the performance gains.  The real benefits of 64 bit won't be seen until RAM exceeds 4GB.  The tight integration of hardware vs. software also helps Apple versus Android running on ARM or Intel BT.

post #37 of 99
Quote:
Originally Posted by island hermit View Post
 

 

I showed you something that says Samsung is not struggling... so I guess you will have to show me something that says they are struggling.

 

you said Samsung released mobile profits.  YOU ARE WRONG.  They have not and will not till the end of the month.

 

My proof is Galaxy S4 sales have been pathetic.  That is their cash cow.  You can figure out the rest.

 

I never said Samsung is struggling.  I said their mobile division will be hurting soon because of cheap chinese phones

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #38 of 99
Quote:
Originally Posted by sog35 View Post
 

 

toilet paper is a commodity.  They are basically the same thing, we buy what's cheapest.

 

Computing devices are not commodities.  So you want Apple to sell cheap crap?  You want Apple to have low margins so they no longer can provide excellent customer service and spend money on R&D?  You either get Apple or you don't.  You can't expect to get a premium product at a non-premium price.  Hundreds of millions of people are willing to pay a little extra to get the best.  High margins insure that Apple sells the best year after year.

 

1) Computing devices are commodities, have been for a couple of years now.

 

2) Apple does sell "cheap crap", they just charge alot for it. 

 

3) Apple does not "provide excellent customer service". Service is really only through Apple Stores, which are only in larger cities. Apple Stores are terribly inefficient. I far preferred it when I got my Apple products at CompUSA.

 

4) Apple isn't delivering premium products. They deliver a tiny phone, poor software and enough "shiny" to keep the fan base happy. They only charge premium prices.

post #39 of 99
Quote:
Originally Posted by sog35 View Post
 

 

toilet paper is a commodity.  They are basically the same thing, we buy what's cheapest.

 

Computing devices are not commodities.  So you want Apple to sell cheap crap?  You want Apple to have low margins so they no longer can provide excellent customer service and spend money on R&D?  You either get Apple or you don't.  You can't expect to get a premium product at a non-premium price.  Hundreds of millions of people are willing to pay a little extra to get the best.  High margins insure that Apple sells the best year after year.

 

Its takes TONS OF MONEY to develop game changing products.  That's what Apple does.  Other companies like SAMDUNG simply copy

 

Hey, if you've ever used the really thin toilet paper, you'll know there are some benefits to buying the premium stuff.  If I use a cheap phone or cheap toilet paper, I end up with a handful of sh*t!

post #40 of 99
Quote:
Originally Posted by JamesMac View Post

Woah, slow down.  The A7 is one fantastic bit of engineering, and if anything, I'd say SOC design is one of Apple's key strengths.  The move to a new ISA as part of ARMV8, plus hardware cryptography account for most of the performance gains.  The real benefits of 64 bit won't be seen until RAM exceeds 4GB.  The tight integration of hardware vs. software also helps Apple versus Android running on ARM or Intel BT.

That's just not accurate. As noted by both Mike Ash and AnandTech 64-bit doesn't in itself mean more than 4GB of RAM. You can see this 64-bit systems that use much less than 4GB RAM and 32-bit systems that use much more than 4GB RAM.

It's odd that you note there is a benefit from the ARMv8 ISA but fail to see that it's only available for 64-bit operation.
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: AAPL Investors
AppleInsider › Forums › Investors › AAPL Investors › iPhone 5s launch expected to boost Apple's gross margins to nearly 40%