Apple & Samsung capture 103% of handset profits as rivals lose money

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  • Reply 61 of 181
    steven n.steven n. Posts: 1,120member
    jragosta wrote: »
    You're arguing in circles. "You can't have more than 100% profits because you can't have more than 100% profits".

    In reality, a loss is simply a negative profit. When you total the profits (whether it's a conglomerate or a market, you add up the profits of all the components.

    In case A, it's easy:
    Business 1 $100
    Business 2 $200
    Business 3 $100
    Total $400

    In case B, it works exactly the same way, except that you're adding a negative number:
    Business 1 $100
    Business 2 $200
    Business 3 -$100 (loss of $100)
    Total $200

    Percentages are calculated as "the part being considered divided by the total". If the part being considered is $200 and the total is $100, then it's 200%. Just the same as if you had sales of $100 in 2010 and $300 in 2011. The growth is greater than the previous total, so the sales grew by 200%.
    Another circular argument. "Companies can't have more than 100% because they can't have more than 100%". That's not a logical argument (well, technically, it's an argument, but contains a fallacy).

    Do the math:
    1. The total profits of a market is equal to the sum of all the components.
    2. Profits can be either negative or positive
    3. There's absolutely no rule in business or accounting or anywhere else that says you can ignore companies that lost money. You add up ALL the companies to get a total.
    4. Percentage is the part being considered divided by the total times 100.

    While it is uncommon for the percentage of profits from one or two companies to exceed 100%, it's not at all impossible. If you simply follow the math rules, it happens - as in this case.

    Your method leads to some other serious problems. If you're going to ignore the profits of HTC, Motorola, etc, why not the sales? So the entire market sales volume is just Apple and Samsung? That's the logical outcome of your method - since calculating percentages doesn't depend on what you are calculating.
    You need to ask for a refund. If sales in 2010 were $100 and in 2011 sales were $300, then the sales increased by 200%. Percentages can easily go over 100%.
    ROTLFMAO. Try to tell the SEC that net profits are different than total profits.

    How many multimillion dollar conglomerates have you run? I have - and the way I described it is exactly the way it works in the real world.

    jragosta wrote: »
    You're absolutely wrong. See my example in the previous post. However, instead of creating $10 out of thin air, you created $100 out of thin air. Congratulations.
    I am absolutely right and you did not respond to my application of your fundamentally flawed math and principals. The reason you disregard losses in calculating % profit share across companies within an industry is to avoid division by 0 errors that your incorrect method allows. My guess is you ran your multi million conglomerate into the ground?
  • Reply 62 of 181

    Quote:

    Originally Posted by jragosta View Post





    Profits can be positive or negative. If you don't understand that very simple fact, you shouldn't be discussing it at all.


    To reference a quote from person very near to my heart, maybe you should grab an accounting book before you embarrass yourself any further.

  • Reply 63 of 181


    This is a silly argument of semantics.


     


    If Apple acquired every Smart Phone vendor in the world then its profits i.e. INDUSTRY PROFITS, would be the same figure quoted in the article.


     


    Logically, if Apple were then to divest all these vendors the industry profits shouldn't magically increase (because you exclude those with negative bottom lines). 


     


    Industry profit must include all participants in the industry whether they are positive or negative. 

  • Reply 64 of 181

    Quote:

    Originally Posted by Steven N. View Post







    I am absolutely right and you did not respond to my application of your fundamentally flawed math and principals. The reason you disregard losses in calculating % profit share across companies within an industry is to avoid division by 0 errors that your incorrect method allows.


     


    Thank you.


     


    Everyone here is real good with math (I say that seriously) but they don't understand math from an applied standpoint... you know, when you actually take math out of the classroom and apply to to real-world situations.


     


    Let's try one last time. Let's assume all these companies sell cell phones:


    Company A made $10 profit


    Company B made $10 profit


    Company C made $10 profit


    Company D made $10 profit


    Company E lost $40.


     


    Taken as whole, the cell phone market made $0 in profit. As a group, we can all agree here.


     


    Using jragosta's math, we find:


    Company A made 0% of the profits


    Company B made 0% of the profits


    Company C made 0% of the profits


    Company D made 0% of the profits


    Company E made 0% of the profits


     


    Using real-world accounting principles that are used outside of this forum in every single application of this matter:


    Company A made 25% of the profits


    Company B made 25% of the profits


    Company C made 25% of the profits


    Company D made 25% of the profits


    Company E made 100% of the losses


     


    So, you all can toss out things like "if you know how to do math" or "this is fundamentally correct" or whatever have you but, at the end of the day, anyone that believes that 103% of the profits went to two companies is wrong. Flat out wrong.

  • Reply 65 of 181

    Quote:

    Originally Posted by Creid1987 View Post


    This is a silly argument of semantics.


     


    If Apple acquired every Smart Phone vendor in the world then its profits i.e. INDUSTRY PROFITS, would be the same figure quoted in the article.


     


    Logically, if Apple were then to divest all these vendors the industry profits shouldn't magically increase (because you exclude those with negative bottom lines). 


     


    Industry profit must include all participants in the industry whether they are positive or negative. 



    If Apple acquired every other company, then their net profits would equal all profits per division (each acquired company) minus all losses per division.  If they calculated that net profits number, they wouldn't look at their profitable divisions, who made more in profits than their unprofitable divisions lost, and then say that their profitable divisions made more than the entire company made.  That's what you and jragosta are arguing for.


     


    You're attempting to do math with numbers that cannot be added, subtracted, divided, or multiplied while still having a sensible outcome.

  • Reply 66 of 181
    solipsismxsolipsismx Posts: 19,566member
    Company A had 33.3% of market profit
    Company B had 66.6% of market profit 
    Company C had 100% of market loss (They had no profit) Saying that had negative profit is just asinine even if someone could argue its legitimacy with a masters of finance. If it is a loss, it isn't profit by the definition of the word.

    <span class="hg" style="font-family:Baskerville;font-size:medium;line-height:normal;">[SIZE=24px]profit[/SIZE] |<span class="ph t_respell" style="margin-left:.3em;margin-right:.3em;">?präfit</span>
    |
    </span>
    <span class="sg" style="display:block;margin-left:1em;text-indent:-1em;font-family:Baskerville;font-size:medium;line-height:normal;"><span class="se1" style="display:block;margin-top:.2em;margin-bottom:1em;"><span class="posg"><span class="pos" style="margin-right:.3em;"><span class="gp tg_pos" style="margin-right:.3em;">noun</span>
    </span>
    </span><span class="msDict t_core" id="user_m_en_us1280986.001" style="display:block;text-indent:-1em;"><span class="df">a financial <span>gain</span>, esp. <span>the</span> <span>difference</span> <span>between</span> the amount <span>earned</span> and the amount spent in buying, operating, or <span>producing</span> <span>something</span></span></span>
    </span>
    </span>

    Note the use of the word DIFFERENCE. This means that it also registers negative values.

    If you or anyone else thinks that percentage of profit can only be between 0 and 100% then you have to address how there can be a NEGATIVE profit. On top of that, do you et al. not think that a negative can be registered as a profit? It's you lost money your profit is 0% but that isn't what they are accounting for. They clearly show a NEGATIVE profit because of the DIFFERENCE.

    Bottom line: you can't use a stict value for total profit for an industry unless you are willing to completely ignore negative profits because then all you're calculating is Nokia's profits as zero, a null value, for the quarter without accounting for any loss because "you can't be below ZERO percent just as you can't be above 100 percent" in this odd have your cake and eat it too mental gymnastics I'm seeing here.


    PS: What is asinine is saying that something you colloquially use only in the positive form can't have a negative association when it's a measure of a difference. I thought we were making progress in society as it's been thousands of years since logic, the zero, and other basic things were first worked out but it appears we're making negative progress in society, also known as regressing.
  • Reply 67 of 181

    Quote:

    Originally Posted by BrianCPA View Post


     


    "-except you-"


    Just to make sure I wasn't going crazy, I looked back and saw at least 5-10 people talking about the "accounting". Maybe you made a accounting mistake when adding?


     


    I digress. It's hard to convince someone they're wrong when they don't understand the subject to begin with.



    I'll repeat. There's difference between accounting and arithmetic. Hope you got that.

  • Reply 68 of 181
    stelligentstelligent Posts: 2,680member

    Quote:

    Originally Posted by SolipsismX View Post





    Note the use of the word DIFFERENCE. This means that it also registers negative values.



    If you or anyone else thinks that percentage of profit can only be between 0 and 100% then you have to address had a NEGATIVE profit. On top of that, do you et al. not think that a negative can be registered as a profit? It's you lost money your profit is 0% but that isn't what they are accounting for. They clearly show a NEGATIVE profit because of the DIFFERENCE.



    Bottom line: you can't use a stict value for total profit for an industry unless you are willing to completely ignore negative profits because then all you're calculating is Nokia's profits as zero, a null value, for the quarter without accounting for any loss because "you can't be below ZERO percent just as you can't be above 100 percent" in this odd have your cake and eat it too mental gymnastics I'm seeing here.


     


    Would the tax on a negative profit be +ve or -ve? :)

  • Reply 69 of 181
    I notice that you conveniently ignored the part where profit was defined as a financial gain, a gain in then amount of the difference between what is earned and what is spent.
  • Reply 70 of 181

    Quote:

    Originally Posted by Steven N. View Post





    I fundamentally disagree with you. We are not talking about holding companies but unique companies. If you had:



    Company A: $100 profit

    Company B: ($50) loss

    Company C: ($50) loss



    There was $100 profit captured in the industry. There was also $100 in losses but they don't negate the $100 in profit made by Company A. Likewise, you are claiming that Company A made ? of the profit. No, it made all of the profit at 100%


    Um, no. The industry profit in your example is $0. Period. At least, that is what any investor who owns, say, an industry ETF would say. Or any halfway credible academic doing research at the industry -- as opposed to the firm -- level.


     


    People passing off as accountants and lawyers and printers here don't appear to grasp that basic point. Perhaps understandable, because their clients are firms, not industries.

  • Reply 71 of 181
    stelligentstelligent Posts: 2,680member


    I am no accountant (or lawyer). But I wonder about this: Are there really formal accounting principles governing the total profits of an industry? 


     


    I think not. If there are, can I see a reference? I am genuinely interested (but not at all interested in the debate here).


     


    As much as some try to draw an analogy with a company comprising both profitable and non-profitable divisions, they are not the same thing. Such a company would have to file tax returns based on net profits. An "industry" does no such thing. Ergo ...

  • Reply 72 of 181
    jragostajragosta Posts: 10,473member
    briancpa wrote: »
    Sorry. Still wrong.

    Yes, total profits are $20.

    We're getting somewhere.

    Now, go back to third grade. How do you calculate a percentage? You divide the part of interest by the whole.

    So if the part of interest is $20 (company B profits) and the whole is $20 (you agree that this is the total profits), how can the percentage be anything other than 100%?
    briancpa wrote: »
    Profits and positive.
    Losses are negative.

    That's why they're called P&L statements (Profit and Loss)

    Wrong. Profits can be negative:
    http://dictionary.reference.com/browse/negative+profit
    steven n. wrote: »

    I am absolutely right and you did not respond to my application of your fundamentally flawed math and principals. The reason you disregard losses in calculating % profit share across companies within an industry is to avoid division by 0 errors that your incorrect method allows. My guess is you ran your multi million conglomerate into the ground?

    Look at my post #54. Explain where the extra $10 came from.

    briancpa wrote: »
    Thank you.

    Everyone here is real good with math (I say that seriously) but they don't understand math from an applied standpoint... you know, when you actually take math out of the classroom and apply to to real-world situations.

    Let's try one last time. Let's assume all these companies sell cell phones:
    Company A made $10 profit
    Company B made $10 profit
    Company C made $10 profit
    Company D made $10 profit
    Company E lost $40.

    Taken as whole, the cell phone market made $0 in profit. As a group, we can all agree here.

    OK. So you agree that you add up all the numbers to get total profits. That's progress.

    So if we do the same thing in the example in this thread. Apple and Samsung together had more profits than the total for the industry. Right?

    Or do you change the rules when it's convenient.
    briancpa wrote: »
    Using jragosta's math, we find:
    Company A made 0% of the profits
    Company B made 0% of the profits
    Company C made 0% of the profits
    Company D made 0% of the profits
    Company E made 0% of the profits

    Wrong. I never made such an absurd claim.

    Unfortunately, you failed math. Each company A to D made $10. Since the total profit was zero, the percentage is undefined ($10 / $0 is undefined).
  • Reply 73 of 181
    stelligentstelligent Posts: 2,680member

    Quote:

    Originally Posted by anantksundaram View Post


    I'll repeat. There's difference between accounting and arithmetic. Hope you got that.



     


    Interestingly, they both start with "a" and have 10 letters.

  • Reply 74 of 181

    Quote:

    Originally Posted by anantksundaram View Post


    Um, no. The industry profit in your example is $0. Period. At least, that is what any investor who owns, say, an industry ETF would say. Or any halfway credible academic doing research at the industry -- as opposed to the firm -- level.


     


    People passing off as accountants and lawyers and printers here don't appear to grasp that basic point. Perhaps understandable, because their clients are firms, not industries.



     


    When all else fails, attack the person instead of the argument.


     


    Does it eat you alive knowing your still wrong? 

  • Reply 75 of 181

    Quote:

    Originally Posted by BrianCPA View Post


    Profits and positive.


    Losses are negative.


     


    That's why they're called P&L statements (Profit and Loss)



    Surely, an accountant would understand that Net Income can be a negative number.


     


    If Net Income is not equal to "Profit" what would an accountant say the latter means?


     


    PS: An accountant would also know that that they are --more often than not -- called Income Statement or Statement of Operations.

  • Reply 76 of 181
    stelligentstelligent Posts: 2,680member

    Quote:

    Originally Posted by BrianCPA View Post


     


    When all else fails, attack the person instead of the argument.


     


    Does it eat you alive knowing your still wrong? 



    You are, not your.


     


    Man, it must be embarrassing to make what you think is a clever put-down, only to be defeated by your own poor command of the language. :-p

  • Reply 77 of 181
    I am Applesupertramp and I am Steve

    Let me ask you this. If company A had $100 in profits and company B had $100 dollars in losses, and these were the only two companies in an industry, then what percentage of the profits does company "A" have?

  • Reply 78 of 181
    steven n.steven n. Posts: 1,120member

    Quote:

    Originally Posted by BrianCPA View Post


     


    Thank you.


     


    Everyone here is real good with math (I say that seriously) but they don't understand math from an applied standpoint... you know, when you actually take math out of the classroom and apply to to real-world situations.


     


    Let's try one last time. Let's assume all these companies sell cell phones:


    Company A made $10 profit


    Company B made $10 profit


    Company C made $10 profit


    Company D made $10 profit


    Company E lost $40.


     


    Taken as whole, the cell phone market made $0 in profit. As a group, we can all agree here.


     


    Using jragosta's math, we find:


    Company A made 0% of the profits


    Company B made 0% of the profits


    Company C made 0% of the profits


    Company D made 0% of the profits


    Company E made 0% of the profits


     


    Using real-world accounting principles that are used outside of this forum in every single application of this matter:


    Company A made 25% of the profits


    Company B made 25% of the profits


    Company C made 25% of the profits


    Company D made 25% of the profits


    Company E made 100% of the losses


     


    So, you all can toss out things like "if you know how to do math" or "this is fundamentally correct" or whatever have you but, at the end of the day, anyone that believes that 103% of the profits went to two companies is wrong. Flat out wrong.



     


    Close but not quite right:


     


     


    Using jragosta's math, we find:


    Company A made ?% of the profits


    Company B made ?% of the profits


    Company C made ?% of the profits


    Company D made ?% of the profits


    Company E made -?% of the profits


     


    The division by 0 causes jragosta's method to simply explode into the indeterminate.

  • Reply 79 of 181
    Um, no. The industry profit in your example is $0. Period. At least, that is what any investor who owns, say, an industry ETF would say. Or any halfway credible academic doing research at the industry -- as opposed to the firm -- level.

    People passing off as accountants and lawyers and printers here don't appear to grasp that basic point. Perhaps understandable, because their clients are firms, not industries.

    You didn't even address his point. Use his example and do the math you're advocating.

    Company A makes $100 in profits.
    Company B has $100 in losses.

    The industry net profit is $0.

    You and jragosta are saying that in order yo determine Company A's share of the profits we make the following calculation:

    Company profits/total industry profits = $100/$0 = infinity.

    You are literally arguing for that to be possible and logical.
  • Reply 80 of 181

    Quote:

    Originally Posted by BrianCPA View Post


    It's hard to convince someone they're wrong when they don't understand the subject to begin with.


     


    Quote:

    Originally Posted by BrianCPA View Post


    When all else fails, attack the person instead of the argument.


     


    Does it eat you alive knowing your still wrong? 



     


    On the topic of 'attacking the person instead of the argument,' I thought I'd have you look again at the first of the two quoted posts above.


     


    Re. the second post, and the question, "Does it eat you alive knowing your [sic] still wrong?  the answer is, 'No,' since I am quite comfortable with the content and substance of my argument. image

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