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Apple's iPhone earned 87.4% of global handset profits in December quarter - Page 2

post #41 of 49
Quote:
Originally Posted by THT View Post
 

"Because their combined earnings were higher than the industry's total earnings as a result of many vendors losing money in Q4, Apple and Samsung mathematically accounted for more than 100% of the industry's earnings."

 

OKay, got it.  Not sure how I missed that statement in the article, unless it was added in after I made my post. But in any event, I don't think it is sensible to equate one companys loss to anothers profit.  Total profits are 100%, not 119%.  Thanks for reminding me of how silly analysts use "new math".

post #42 of 49
Quote:
Originally Posted by v5v View Post
 

 

Whatever you say. All I know is that features intended to make the iPhone/Mac experience better, like FaceTime and Messages, are useless for the two-thirds of the people I interact with who are on Android devices. From an ecosystem point of view, I might actually be better off with Android (<*Shudder!*>).

 

Maybe what matters to you as an investor is different than what matters to me as a user. Like that profit margin. Part of what's deterring me from buying any more iPhones at the moment (aside from holding out for a larger screen) is the hefty price tag. At $900 per for a unit with reasonable storage, sticker shock has us hanging on to old models and not buying new units. It also results in many of the people in my communications circle buying non-Apple devices because they're so much less expensive. Maybe that doesn't matter to Apple as long as it continues to set new sales records with each new model, but it matters to me when the people I interact with are on VHS while I have Beta.

 

The thing is, that every Android OEM is implementing their own ecosystem to their devices. Or is there any use of Samsungs Smart Home environment for LG, HTC, Huawei or Windows users? I think not. Also you should compare the marketshare of those manufacturers in other consumer electronics markets like tablets and laptops and the integration between those devices. Remember that all iPhone users have nice integration with Mac OS X whenever they have both devices from Apple, while a Samsung laptop is almost no use if you have an S4 due to windows.

 

What I'm saying is that Android does not equal Android and if you separate Android by manufacturers there is only Samsung, HTC and Nokia (in some markets) comparable. If about 60% of Samsungs smartphone business consists of dumbphones, where is the advantage of ecosystem?

 

And don't forget that Apple users tend to be much much more active, which boosts the Apple ecosystem and attracts developers, thus making users more active, while Samsung consumers might choose an HTC next time because theres absolutely no difference in App quality

post #43 of 49
Apples eco system is vertical not horizontal. This means Apple is not under the pressures you are describing. Apple learned a long time ago what it takes to keep a platform running. You might as well try to teach an alligator to bite better. Apples is in a dream sitution. Most of Wall St is so besotted by their egos, they can't see how to do the obvious and take the sure bet. If the obvious answer is true, then they have no way of justfying their ridiculous margins. This is especially true of private equity funds. After fees just using an index fund will hammer them over time. Check out Warren Buffets ten year bet with one of these guys. He is so far ahead there is no real chance for the equity fund to catch up.
post #44 of 49
Quote:
Originally Posted by Michael Scrip View Post

I don't know why there have been so many comments in this thread about ecosystems referring to FaceTime and iMessages. Are they that big of a deal?

 

FaceTime, not so much to be honest, but Messages, if and when Apple ever gets it working, is actually gonna be quite handy. I find it easier to answer a text message from a desktop app on my Mac than a tiny keyboard on a tiny touchscreen. Hopefully Apple will get it working soon.

 

I just want others to use whatever platform I do because it's more convenient for me, and if that means Apple needs to make a cheaper phone, then I want them to do that!

 

Also I want Apple to have majority marketshare so the kids at work will stop pointing and laughing at me while they GooGaw their Spotty Twits or whatever the hell it is they're doing with their non-Apple devices that makes them laugh derisively over some inside joke at the expense of iPhoners.

post #45 of 49
Quote:
Originally Posted by v5v View Post

FaceTime, not so much to be honest, but Messages, if and when Apple ever gets it working, is actually gonna be quite handy. I find it easier to answer a text message from a desktop app on my Mac than a tiny keyboard on a tiny touchscreen. Hopefully Apple will get it working soon.

I just want others to use whatever platform I do because it's more convenient for me, and if that means Apple needs to make a cheaper phone, then I want them to do that!

Also I want Apple to have majority marketshare so the kids at work will stop pointing and laughing at me while they GooGaw their Spotty Twits or whatever the hell it is they're doing with their non-Apple devices that makes them laugh derisively over some inside joke at the expense of iPhoners.

Those are not good enough reasons for Apple to radically change their business practices. 1smile.gif
post #46 of 49
Quote:
Originally Posted by ddawson100 View Post

All the negative numbers together don't add up to 19% so the explanation of 119% is still confusing. It seems to me the table says one thing then the author of the article says another. I don't have any reason to believe the table was manipulated but I'm also having trouble understanding how the author misread the numbers. 

ps. It's entirely possible that I'm misreading the table but the article certainly doesn't help me understand how to arrive at 87.4%.

The table shown is from a different source, the analysis in the article text is from Tavis McCourt:

"McCourt's analysis is even more favorable to Apple than figures by Canaccord Genuity (above)"

The 87.4% is from McCourt for the latest financial quarter. The table of data is from Canaccord for previous quarters - the dates in the table are for last year. The article for that old data is here:

http://appleinsider.com/articles/13/11/14/apple-samsung-take-massive-109-of-mobile-industry-profits-while-competitors-lose-money

That was with Apple at 56% of the profit, Samsung at 53%.

Every time these articles get posted, they do the same thing with adding the profits and include losses too. I don't think it's the right way to do it because losses are financed with profit from a different financial quarter. If an analysis is isolating profit to a given financial quarter, any loss is equal to zero profit but for some people it may be worthwhile to know that Apple is taking away profits that competitors have gained in other financial periods.

The numbers counting losses as zero gives Apple 73% and Samsung 27%. They both reported their income for the latest quarter:

http://www.apple.com/pr/library/2014/01/27Apple-Reports-First-Quarter-Results.html
http://bgr.com/2014/01/24/samsung-q4-2013-earnings/

Apple's Q1 2014 is roughly the same as Samsung's Q4 2013. Apple's accounting periods are a bit weird, having a 2014 accounting period end in December 2013:

"Apple today announced financial results for its fiscal 2014 first quarter ended December 28, 2013"

Apple net income was $13.1b
Samsung operating income was $7.7b

The analysts try to break down those numbers into the mobile segment alone but it's clear to see Apple is way ahead. This could be put down to Apple releasing the iPhone 5S later in the year while the Galaxy S4 came earlier. The Galaxy S5 is due in a couple of weeks:

http://www.theinquirer.net/inquirer/news/2328478/samsung-galaxy-s5-retail-packaging-leak-confirms-5in-qhd-screen-20mp-camera

The iPhone 6 likely won't arrive until September. So Samsung's Q1 2014 should be their strongest (=Apple's Q2) and Apple's Q1 2015 should be their strongest.
post #47 of 49
If I choose to by an iphone instead of a galaxy s4 that doesn't give apple credit for selling 2 phones or twice the profit. Who writes these bogus articles. You never hear this bs on conference calls or any legitimate financial show. So if 10 companies sell every phone they can make then together they own 1000% of the profits???? I would like to see that pie chart.
post #48 of 49
Quote:
Originally Posted by TeaEarleGreyHot View Post
 

OKay, got it.  Not sure how I missed that statement in the article, unless it was added in after I made my post. But in any event, I don't think it is sensible to equate one companys loss to anothers profit.  Total profits are 100%, not 119%.  Thanks for reminding me of how silly analysts use "new math".

 

The quote is from the investors.com article. It was there when I first read it.

 

Well, I can agree and disagree with you regarding the "new math". It's just this analysts method for gauging the performance of phone makers. Some have a "+" sign in the net income column and some have a "-" sign in the net income column. You take an absolute value and add them all up and start taking percentages of the total. ;) It's not an uncommon method and has been used for awhile.

post #49 of 49
Quote:
Originally Posted by THT View Post
 

Well, I can agree and disagree with you regarding the "new math".... It's not an uncommon method and has been used for awhile.

 

Yes, it's been done for a while. My biggest problem with it is that the practice mathematically assigns the losses as profits to the cometitors in proportion to each competitor's actual profits, instead of realistically to the ones who truly benefitted from the loss.  It mathematically *assumes* the losses were shared equivalently. But in reality, when Blackberry incurs losses, it may not be Apple who benefits at all, but Nokia/Microsoft entirely. Yet, the percentage of net profit by Apple is also increased by the presumption.  Since the actual benefactor of a loss is generally impossible to determine, the practice is fallacious.  It is simply an invention.  An assumption.  A lie.

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