Apple to focus on software growth as Samsung warns of shrinking hardware profits

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  • Reply 21 of 87
    If you have an important correction, please send it to the author of the article directly. AI does strive to correct any mistakes as soon as they are noted.

    Posting complaints about corrections here isn't as likely to result in a change to the article.

    It's sort of like "Press 1 if you want to fill out a survey after the customer service call." Ain't gonna happen.

    Perhaps Moderators should be take responsibility for such alerts to AI?
  • Reply 22 of 87
    mj1970mj1970 Posts: 9,002member

    Quote:

    Originally Posted by jungmark View Post


    Apple is a hardware company. They make their money on selling hardware hence free ios updates and inexpensive osx updates. That being said, to get people to buy Apple hardware, Apple has to create unique software. The user experience of the software drives hardware sales. It's one of those catch-22s, if they were a pure hardware company (android/window clones), they won't be able to sell hardware at a "premium". If they are a pure software company (license) iOS/OSX), they won't be able to sell hardware as the licensees will sell for cheaper.



     


    I'm not sure it is a catch-22. A catch-22 usually refers to a problematic situation that one cannot get out of easily due to inherent contradictory constraints.


     


    I'm not sure Apple has a problem here.


     


    The truth is it's just more subtle than simply declaring they are a hardware (or software) company.


     


    Actually, I don't know why this distinction is even necessary. Perhaps a more apt description that gets away from the black-and-white hardware vs. software categorization is to say that Apple is a (high technology) consumer products/gadgets company...where their products are a synthesis of hardware and software.


     


    Yes, Apple could sell generic hardware for anyone's OS. They make great hardware with great design.


     


    Yes, Apple could simply be Microsoft and license their OSes (and sells apps on tops of it) to generic hardware makers.


     


    But neither of those would likely have gotten Apple to the sales, profits and valuation it is at now (or has been.)


     


    The magic is in the union. It's not just a couple slices of bread. It's not just a smear of peanut butter. It's not just a dollop of jelly. It is a Peanut Butter and Jelly Sandwich (tm). That makes all the difference in the world.


     


    So, no, I would not say "Apple is a hardware company." Nor would I say that "Apple is a software company." It is not either/or, it is both/and. That's kind of the point. And it is an important one, because the software part of that equation is what helps Apple to earn higher margins on what is (or will soon become) basically commodity hardware where others cannot.

  • Reply 23 of 87

    Quote:

    Originally Posted by Corrections View Post


    One could easily make the same complaints about how "awful" Microsoft's software is. But that didn't stop the company from earning most of the industry's revenues or controlling where the market was going for over a decade. 





    Do we really want Apple to be compared to Microsoft?

  • Reply 24 of 87


    Maybe all of Dilger's stories should feature a large "Editorial" or "Op-ed" header graphic? This isn't reporting, it's cheerleading.

  • Reply 25 of 87
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by Corrections View Post


    One could easily make the same complaints about how "awful" Microsoft's software is. But that didn't stop the company from earning most of the industry's revenues or controlling where the market was going for over a decade. 



    Back in the mid-ninties Microsoft did a really good job of selling their platform for the dedicated purpose of MS Office functionality. Something that everyone supposedly needed. I think Apple needs to define what exactly the iPad platform is designed for. Right now their policy seems to be let the third party devs decide what it is good for. It is difficult to tell how many people actually ditched all their computers for an iPad but it can't be many of the professionals or content creator types because the iPad just isn't very good at those tasks. Is the iPad just an Internet surfing consumer toy or what? That is all I use it for.


     


    We haven't heard much from the education industry as to any major iBooks Author textbook releases or any major school system iPad adoption. I really think the iPad software situation is in need of some definition. Sure there are thousands of iPad apps but what is the iPad really good at? Portability is just not enough of a reason for its existence. A lot of people went out and bought one when they came out as they were fashionable, novel and fun but what is the long term strategy for Apple with the iPad as it is apparently the only division that is showing sales growth?

  • Reply 26 of 87
    Does anyone still think Apple needs to sell low end phones?
  • Reply 27 of 87
    solipsismxsolipsismx Posts: 19,566member
    Does anyone still think Apple needs to sell low end phones?

    Absolutely¡ They need it to keep their APR and profit margins from falling¡
  • Reply 28 of 87
    jragostajragosta Posts: 10,473member
    <h2>Samsung warns of an end to its growth</h2>

    <h2>Apple is not warning of a collapse in profits</h2>.

    For all those arguing that AAPL's share collapse was due to estimates of FUTURE profits, please explain this one. Apple already earns far more than Samsung on similar revenues, Apple is projecting continued growth (albeit at much slower rate than the past couple of years) while Samsung is projecting a decline in sales.

    Yet AAPL share price collapsed while Samsung did not.

    How do you explain that?
  • Reply 29 of 87
    Well they definitely need to step it up on the software side of their business. iOS is looking dated and tired, the same screens everywhere you look. Its time they make a leap in software design and its not just about Siri (which is a leap) or Maps (which is a stumble forward)). It may be better under the hood, as it were, but its not old enough to be considered classic. It is just dated.
  • Reply 30 of 87
    anonymouseanonymouse Posts: 6,965member

    Quote:

    Originally Posted by MJ1970 View Post


    So this will bring up the inevitable debate of whether Apple is a hardware company or a software company.



     


    Apple is a software company that subsidizes its software development through best of breed hardware sales.

  • Reply 31 of 87
    drblankdrblank Posts: 3,385member

    Quote:

    Originally Posted by quinney View Post





    A chart of revenue by segment doesn't necessarily tell you anything about profit per segment.


    It just shows a percentage of revenue when compared to each other.  




    Check this site out, there are lots of different charts to look at.


     


    http://barefigur.es

  • Reply 32 of 87
    Terrible article, a reminder of why I don't bother to read Apple Insider anymore.
  • Reply 33 of 87
    drblankdrblank Posts: 3,385member


    If you are in the music industry, iOS dominates.  NAMM is going on this weekend and every demonstration is basically iOS.   Hardware, iPads and iPhones are all over the place. You can turn an iPad into a 6 or 16 channel mixing board that individual musicians or bands can use.   They are used in conjunction with keyboards.


     


    Pretty much no one is developing for Android or WIndows tablets/smartphones.  It's embarrassing. All of the major application developers are ALL OVER iOS, but NOTHING for Android or Windows devices.  Even on the desktop side, there are less Windows apps.  Some companies are actually starting to drop Windows support altogether.  It's pretty scary for anyone using Windows.

  • Reply 34 of 87
    Dan_DilgerDan_Dilger Posts: 1,584member

    Quote:

    Originally Posted by SpamSandwich View Post


    Maybe all of Dilger's stories should feature a large "Editorial" or "Op-ed" header graphic? This isn't reporting, it's cheerleading.



     


    Can you articulate what is wrong with the article in your opinion? What is opinion rather than factual reporting?  

  • Reply 35 of 87
    steven n.steven n. Posts: 1,229member

    Quote:

    Originally Posted by jungmark View Post


     


    Apple is a hardware company...



    Nope.


     


    Apple is a systems company.  Because so few people (even in other companies) understands this, it makes them hard to compete against.

  • Reply 36 of 87
    macrulezmacrulez Posts: 2,455member


    deleted

  • Reply 37 of 87
    solipsismxsolipsismx Posts: 19,566member
    macrulez wrote: »

    True, so the outlook could be better - or worse - than revenue seems to suggest.

    Do you know where one can find a breakdown of profit from software vs hardware?

    I don't recall anything directly but if anyone has figured it out I think it would be Asymco.
  • Reply 38 of 87
    macrulezmacrulez Posts: 2,455member


    deleted

  • Reply 39 of 87
    solipsismxsolipsismx Posts: 19,566member
    macrulez wrote: »
    This chart labels each category more explicitly, with results not much different from the other one:

    [image removed]

    Are other breakdowns more readily available which would show a different mix?

    And more relevant here, as I asked above, has Apple made stats available which would show profits from software vs hardware?

    CPU net sales? That's a weird way for a tech site to note Mac or PC sales.
  • Reply 40 of 87


    Originally Posted by Steven N. View Post

    Nope.


     


    Apple is a systems company.  Because so few people (even in other companies) understands this, it makes them hard to compete against.



     


    "People who write software should want to do their own hardware."


     


    Jobs often said that Apple is a software company, but that's probably just because people demand a distinction. Makes them feel more comfortable. 


     


    I'm sure Microsoft is feeling pretty comfortable, watching the cracks slip through the facade… 

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