You've basically copy-pasted or slightly re-worded the original article in its entirety, strongly encouraging AI readers to land on this site, read the re-blog, hopefully click and ad or two, then done.
Some would say that linking to his site at all is throwing him a bone, but obviously, I don't concur.
I get your point - a link is almost moot if you paraphrase the whole blog post. On the other hand, 2/3 of Gruber's posts are made up of a title, a link and a snarky remark. Daringfireball is more like a portal now, rather than a blog.
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?
Thanks for saving me the trouble of typing this! I'll just add that if I recall correctly, Apple has made it clear that their business model includes cutting out the things that suck. I doubt these other PC makers share that mindset, but if they did, I think the gap would shrink.
For all I know all of those donations could have gone to the Church of Scientology which still qualifies for 501c! I wish there were more details.
I'm sure if you did a little investigative digging, you could find out where the money is going. But if you keep the cynical route, then you can always assume that any reports you got were forged or doctored or redacted or straight up fabricated. I prefer to be optimistic and assume/hope that the money is going to worthy causes. Though "worthy cause" means different things to different people. Back when Prop 8 was being debated in California, Apple put their corporate weight behind the "anti-Prop 8" campaigns. Now, if you're gay/lesbian/etc. and you want the right to marry in California, then you'd probably consider that a "worthy cause". If you're against gay marriage, then you wouldn't. Likewise, if you're a scientologist, and an Apple exec gave money to the Church of Scientology, I'm sure you'd be pretty happy about that. If you think scientologists are a bunch of loons, then you probably wouldn't be happy if that were the case.
You completely misinterpreted me then. I wasn't seeking to imply that Apple's investors weren't philanthropic, or that its employees weren't - I was trying, apparently unsuccessfully, to criticize the concept of 'corporate philanthropy' where a corporation does good by giving money.
My point here is that it's equivalent to the two of us walking down the street together and seeing a homeless man. I feel sorry for him, so I pick your pocket, take 20 from your wallet, and give it to the homeless guy.
Giving away money that isn't mine isn't philanthropy, and corporations hold their money in trust for their shareholders, so by definition it isn't theirs to give away.
Hmmm.. I don't agree with the "pickpocket" analogy. Shareholders willingly invest in a company?the company doesn't pick anyone's pockets. If enough shareholders didn't like what the company is doing with their money, then they can vote at a shareholder's meeting and get things changed. Now, I suppose if the "minority" of shareholders don't want Apple giving money to the homeless guy (to stick with your analogy), they might feel like they've been pickpocketed. In which case, they can always sell their shares and invest in a more "profit-minded" company?that won't give to a homeless guy. Or, conversely, if the "minority" of shareholders, want they company to give to the homeless guy, but the majority say "Screw the homeless guy, we want our dividends!!", again, the minority can sell their shares, and invest in a more "ethical" company?one that's more in line with their leftist/pinko/socialist/tree-hugging values*. But, a smart/savvy investor will have a pretty good idea of what his/her money is doing. For me, as an Apple investor, I'd be thrilled to know that Apple is giving money to homeless guys.
* <snark>
I guess we'll have to agree to disagree on this "corporate philanthropy is a contradiction" thing.
Richman recalled that Apple amassed $4.976 billion in revenue from the sale of 3.76 million Macs during its previous quarter, yielding an average selling price of $1,323.40 per Mac. He then multiplied that figure by an 28% gross margin estimate for Mac sales from Jefferies & Co. -- which is still several hundred basis points below the company's reported average -- to arrive at a profit of $370.55 per Mac sold.
By comparison, HP?s 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 doesn?t factor in overhead costs, came in at 5.66%.
"If we assume they spent 1% of their $9.415 billion in revenue ? $94.15 million ? on operations, then their profit margin was 6.66%," Richman wrote. "But let?s give them the benefit of the doubt and make it 8%."
Why in the world are they comparing Apple's GROSS MARGINS to HP's OPERATING MARGINS?
(admittedly, they're making up an operating overhead number for HP, but that simply increases the error. Why not compare published gross margin to published gross margin or compare published net to published net?
Gates and Buffet choose to publicize their charitable activities.
The Apple executives mentioned were just donating fully appreciated stock and as high-ranking insiders had to disclose these transactions. Rank-and-file employees would not have to disclose these transactions publicly.
Also, there is nothing preventing Apple employees from selling their shares on the open market, paying capital gains, then donating some or all of the proceeds to charity (which could be done anonymously).
There are people who do not want to be publicly identified as contributing to a charity. If you look at any arts program (symphony, ballet, opera, museums, etc.), you will typically see multiple anonymous contributors at every donation tier.
Apple is a notoriously secretive company, and it is likely that it would attract a fair number of employees who have a similar mindset and thus would result in a higher population of people who donate anonymously.
Now, I suppose if the "minority" of shareholders don't want Apple giving money to the homeless guy (to stick with your analogy), they might feel like they've been pickpocketed. In which case, they can always sell their shares
That's not how minority shareholder rights work. You have more than the right to sell. Management is supposed to act in your best interests. Now a corporation can give money to charity in order to enrich its shareholders, for example it can do it for PR, or it can do it to build a market, there are lots of reasons why a corporation might give. But love of humanity isn't one of them, a corporation cannot love.
Gates and Buffet choose to publicize their charitable activities.
The Apple executives mentioned were just donating fully appreciated stock and as high-ranking insiders had to disclose these transactions. Rank-and-file employees would not have to disclose these transactions publicly.
Also, there is nothing preventing Apple employees from selling their shares on the open market, paying capital gains, then donating some or all of the proceeds to charity (which could be done anonymously).
There are people who do not want to be publicly identified as contributing to a charity. If you look at any arts program (symphony, ballet, opera, museums, etc.), you will typically see multiple anonymous contributors at every donation tier.
Apple is a notoriously secretive company, and it is likely that it would attract a fair number of employees who have a similar mindset and thus would result in a higher population of people who donate anonymously.
I started using only Apple PCs, and recommending to anyone (people whom I've helped "clean up" their PCs after they became slow over time) that they use Apple products also. Just a better overall experience, and then you can get on with your life. You also get a more polished products, hardware and software. The "other guys" can't provide this overall experience due to their business models and conflicting interests and no accountability for problems in a central place. That combined with very good customer service is well worth the extra bucks you pay upfront. If you guys still don't like Apple because of that, then just buy some Apple stock and stop bothering us with your whining. Then you won't feel like you're getting ripped off.
Sure, it's not impossible that Apple collectively might give away as much as 10% as Warren Buffet.
Theoretically.
But as Wired points out, that would be extremely rare for high-level corporate execs. Not impossible, just unlikely.
It may also be theoretically possible that you could win the lottery tomorrow and donate all of it to charity.
Again, possible, just not likely.
If Apple execs want to take control of this very frequently-cited meme by divulging any significant contributions, they're free to do so. The choice is of course theirs.
And it may also be the case that there just aren't any contributions to discuss other than the ones already mentioned.
As you say, there's no way to know.
True, there is no way to know, however it is likely that there are other contributions. However, most of these would fly under the radar.
Apple (and other Silicon Valley companies) typically grants stock options to their employees as incentives or awards, not actual shares. These options must be exercised to have any value; the applicable taxes can be substantial, so many times the shares are sold right away. Any proceeds from an exercised stock option that are donated to charity would not have to disclosed publicly.
Steve Jobs doesn't have any shares of Apple right now. He has a bunch of options, but they're worthless until exercised.
Why in the world are they comparing Apple's GROSS MARGINS to HP's OPERATING MARGINS?
(admittedly, they're making up an operating overhead number for HP, but that simply increases the error. Why not compare published gross margin to published gross margin or compare published net to published net?
Quote:
Originally Posted by MacRulez
Because he's 15 years old and has no idea what he's talking about?
HP did not publish the gross margin of the Personal Systems Group (reason kind of obvious), only the operating profits. Rather clever for a 15-yr old (or anyone) to estimate the gross margin the way he did.
Comments
http://twitter.com/#!/hotdogsladies/status/1465570303
I quote Mr. Mann because I think this post crossed a line.
Gruber got it right: http://daringfireball.net/linked/2011/06/24/richman. The brevity of his quote intends to pique a reader's interest enough to read the original story at Richman's site.
You've basically copy-pasted or slightly re-worded the original article in its entirety, strongly encouraging AI readers to land on this site, read the re-blog, hopefully click and ad or two, then done.
Some would say that linking to his site at all is throwing him a bone, but obviously, I don't concur.
I get your point - a link is almost moot if you paraphrase the whole blog post. On the other hand, 2/3 of Gruber's posts are made up of a title, a link and a snarky remark. Daringfireball is more like a portal now, rather than a blog.
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?
Thanks for saving me the trouble of typing this! I'll just add that if I recall correctly, Apple has made it clear that their business model includes cutting out the things that suck. I doubt these other PC makers share that mindset, but if they did, I think the gap would shrink.
For all I know all of those donations could have gone to the Church of Scientology which still qualifies for 501c! I wish there were more details.
I'm sure if you did a little investigative digging, you could find out where the money is going. But if you keep the cynical route, then you can always assume that any reports you got were forged or doctored or redacted or straight up fabricated. I prefer to be optimistic and assume/hope that the money is going to worthy causes. Though "worthy cause" means different things to different people. Back when Prop 8 was being debated in California, Apple put their corporate weight behind the "anti-Prop 8" campaigns. Now, if you're gay/lesbian/etc. and you want the right to marry in California, then you'd probably consider that a "worthy cause". If you're against gay marriage, then you wouldn't. Likewise, if you're a scientologist, and an Apple exec gave money to the Church of Scientology, I'm sure you'd be pretty happy about that. If you think scientologists are a bunch of loons, then you probably wouldn't be happy if that were the case.
You completely misinterpreted me then. I wasn't seeking to imply that Apple's investors weren't philanthropic, or that its employees weren't - I was trying, apparently unsuccessfully, to criticize the concept of 'corporate philanthropy' where a corporation does good by giving money.
My point here is that it's equivalent to the two of us walking down the street together and seeing a homeless man. I feel sorry for him, so I pick your pocket, take 20 from your wallet, and give it to the homeless guy.
Giving away money that isn't mine isn't philanthropy, and corporations hold their money in trust for their shareholders, so by definition it isn't theirs to give away.
Hmmm.. I don't agree with the "pickpocket" analogy. Shareholders willingly invest in a company?the company doesn't pick anyone's pockets. If enough shareholders didn't like what the company is doing with their money, then they can vote at a shareholder's meeting and get things changed. Now, I suppose if the "minority" of shareholders don't want Apple giving money to the homeless guy (to stick with your analogy), they might feel like they've been pickpocketed. In which case, they can always sell their shares and invest in a more "profit-minded" company?that won't give to a homeless guy. Or, conversely, if the "minority" of shareholders, want they company to give to the homeless guy, but the majority say "Screw the homeless guy, we want our dividends!!", again, the minority can sell their shares, and invest in a more "ethical" company?one that's more in line with their leftist/pinko/socialist/tree-hugging values*. But, a smart/savvy investor will have a pretty good idea of what his/her money is doing. For me, as an Apple investor, I'd be thrilled to know that Apple is giving money to homeless guys.
* <snark>
I guess we'll have to agree to disagree on this "corporate philanthropy is a contradiction" thing.
Richman recalled that Apple amassed $4.976 billion in revenue from the sale of 3.76 million Macs during its previous quarter, yielding an average selling price of $1,323.40 per Mac. He then multiplied that figure by an 28% gross margin estimate for Mac sales from Jefferies & Co. -- which is still several hundred basis points below the company's reported average -- to arrive at a profit of $370.55 per Mac sold.
By comparison, HP?s 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 doesn?t factor in overhead costs, came in at 5.66%.
"If we assume they spent 1% of their $9.415 billion in revenue ? $94.15 million ? on operations, then their profit margin was 6.66%," Richman wrote. "But let?s give them the benefit of the doubt and make it 8%."
Why in the world are they comparing Apple's GROSS MARGINS to HP's OPERATING MARGINS?
(admittedly, they're making up an operating overhead number for HP, but that simply increases the error. Why not compare published gross margin to published gross margin or compare published net to published net?
To recap:
Bill Gates: $220 million +
http://en.wikipedia.org/wiki/Bill_%2...dation#History
Warren Buffet: $30 billion
http://en.wikipedia.org/wiki/Bill_%2...ffett_donation
Combined Apple Executives: $6.4 million
http://www.macnews.com/2010/12/31/so...able-donations
Hooray! Lots of people gave lots of money!
To recap:
Bill Gates: $220 million +
http://en.wikipedia.org/wiki/Bill_%2...dation#History
Warren Buffet: $30 billion
http://en.wikipedia.org/wiki/Bill_%2...ffett_donation
Combined Apple Executives: $6.4 million
http://www.macnews.com/2010/12/31/so...able-donations
Nothing can be deduced from this.
Gates and Buffet choose to publicize their charitable activities.
The Apple executives mentioned were just donating fully appreciated stock and as high-ranking insiders had to disclose these transactions. Rank-and-file employees would not have to disclose these transactions publicly.
Also, there is nothing preventing Apple employees from selling their shares on the open market, paying capital gains, then donating some or all of the proceeds to charity (which could be done anonymously).
There are people who do not want to be publicly identified as contributing to a charity. If you look at any arts program (symphony, ballet, opera, museums, etc.), you will typically see multiple anonymous contributors at every donation tier.
Apple is a notoriously secretive company, and it is likely that it would attract a fair number of employees who have a similar mindset and thus would result in a higher population of people who donate anonymously.
Now, I suppose if the "minority" of shareholders don't want Apple giving money to the homeless guy (to stick with your analogy), they might feel like they've been pickpocketed. In which case, they can always sell their shares
That's not how minority shareholder rights work. You have more than the right to sell. Management is supposed to act in your best interests. Now a corporation can give money to charity in order to enrich its shareholders, for example it can do it for PR, or it can do it to build a market, there are lots of reasons why a corporation might give. But love of humanity isn't one of them, a corporation cannot love.
Nothing can be deduced from this.
Gates and Buffet choose to publicize their charitable activities.
The Apple executives mentioned were just donating fully appreciated stock and as high-ranking insiders had to disclose these transactions. Rank-and-file employees would not have to disclose these transactions publicly.
Also, there is nothing preventing Apple employees from selling their shares on the open market, paying capital gains, then donating some or all of the proceeds to charity (which could be done anonymously).
There are people who do not want to be publicly identified as contributing to a charity. If you look at any arts program (symphony, ballet, opera, museums, etc.), you will typically see multiple anonymous contributors at every donation tier.
Apple is a notoriously secretive company, and it is likely that it would attract a fair number of employees who have a similar mindset and thus would result in a higher population of people who donate anonymously.
Thank you. That's what I meant to say.
a corporation cannot love.
Oh, there is soooo totally a dystopian sci-fi melodrama in there!
"The Corporation That Could Not Love" <weep> <sniff>
Person: I love you, Apple.
Apple: Alas, I cannot love you back, for I am a corporation, and hence, am incapable of love.
Person: NOOOOOOOO!!! Why, God WHYYYYY???
Oh, there is soooo totally a dystopian sci-fi melodrama in there!
"The Corporation That Could Not Love" <weep> <sniff>
Ooh - with a 70s style voice over on the trailer?
Ooh - with a 70s style voice over on the trailer?
Yeah!
Incidentally, I like the link in your signature.
XKCD—FTW!
That explains why Apple customers are so unhappy.
I started using only Apple PCs, and recommending to anyone (people whom I've helped "clean up" their PCs after they became slow over time) that they use Apple products also. Just a better overall experience, and then you can get on with your life. You also get a more polished products, hardware and software. The "other guys" can't provide this overall experience due to their business models and conflicting interests and no accountability for problems in a central place. That combined with very good customer service is well worth the extra bucks you pay upfront. If you guys still don't like Apple because of that, then just buy some Apple stock and stop bothering us with your whining. Then you won't feel like you're getting ripped off.
Oh, there is soooo totally a dystopian sci-fi melodrama in there!
"The Corporation That Could Not Love" <weep> <sniff>
Person: I love you, Apple.
Apple: Alas, I cannot love you back, for I am a corporation, and hence, am incapable of love.
Person: NOOOOOOOO!!! Why, God WHYYYYY???
Actually, it works better as a Mexican soap opera (thank you Google translate!):
Person: Te quiero, Apple.
Apple: ¡Ay, no te puedo amar de nuevo, porque yo soy una empresa, y por lo tanto, soy incapaz de amar.
Person: NOOOOOOOO! ¿Por qué, Dios, Por qué??
disclaimer: It's been about a decade since I've spoken a word of Spanish, so I don't know if it's correct.
Sure, it's not impossible that Apple collectively might give away as much as 10% as Warren Buffet.
Theoretically.
But as Wired points out, that would be extremely rare for high-level corporate execs. Not impossible, just unlikely.
It may also be theoretically possible that you could win the lottery tomorrow and donate all of it to charity.
Again, possible, just not likely.
If Apple execs want to take control of this very frequently-cited meme by divulging any significant contributions, they're free to do so. The choice is of course theirs.
And it may also be the case that there just aren't any contributions to discuss other than the ones already mentioned.
As you say, there's no way to know.
True, there is no way to know, however it is likely that there are other contributions. However, most of these would fly under the radar.
Apple (and other Silicon Valley companies) typically grants stock options to their employees as incentives or awards, not actual shares. These options must be exercised to have any value; the applicable taxes can be substantial, so many times the shares are sold right away. Any proceeds from an exercised stock option that are donated to charity would not have to disclosed publicly.
Steve Jobs doesn't have any shares of Apple right now. He has a bunch of options, but they're worthless until exercised.
Why in the world are they comparing Apple's GROSS MARGINS to HP's OPERATING MARGINS?
(admittedly, they're making up an operating overhead number for HP, but that simply increases the error. Why not compare published gross margin to published gross margin or compare published net to published net?
Because he's 15 years old and has no idea what he's talking about?
HP did not publish the gross margin of the Personal Systems Group (reason kind of obvious), only the operating profits. Rather clever for a 15-yr old (or anyone) to estimate the gross margin the way he did.