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

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  • Reply 81 of 181
    stelligent wrote: »
    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

    You're resorting to attacking a mistake in his grammar because you can no longer oppose his argument. Well, you could oppose it but you'd look like an idiot.
  • Reply 82 of 181

    Quote:

    Originally Posted by jragosta View Post





    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).


     


    That's our whole point. Company A made $10 in profit but you're saying that they're profit is undefined. $10 in profit (or in this case 25% of all profits) is NOT undefined. It's absolutely a defined and definitive number that can be presented in a defined and definitive percentage.


     


    And for the record: YES, APPLE AND SAMSUNG MADE MORE PROFIT THAT THE INDUSTRY AS A WHOLE. I don't disagree with you for a minute.


     


    But, my simple point is that Apple and Samsung did not make more than 100% of of total industry profit because total industry profit does not include losses.


     


    Look, I get your point. Don't get me wrong. But there is no meaning behind the "103%" of profits in this article. Taking Apples and Samsungs profits, adding in others' losses, and then dividing the first by the second absolutely gives you 103% but it means nothing. It's not a real, meaningful percentage. It's just a percentage.


     


    The actual headline should say: "Apple and Samung capture 99% of handset profits."

  • Reply 83 of 181
    steven n.steven n. Posts: 1,120member

    Quote:

    Originally Posted by SolipsismX View Post





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



     


     


    Loss: "the amount by which the cost of a business exceeds its revenue".  There is a distinct difference between profits and losses.  Profit implies a "gain" and loss implies ... well... a loss.

  • Reply 84 of 181

    Quote:

    Originally Posted by anantksundaram View Post


    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.



     


    Net income can be negative.


     


    Profit cannot be negative.


     


    Losses cannot be positive.


     


    Accountant's used P&L statements everyday, which are different from Income Statements. But, only accountants would know that.

  • Reply 85 of 181


    AccountingInsider...this comment section has gotten out of control

  • Reply 86 of 181

    Quote:

    Originally Posted by KDarling View Post


     


    It would've also been helpful if they had indicated how they came up with Apple's handset revenue / profit numbers.


     


     


    You're right, they seem to have included it all, which is incorrect.   Samsung's own press release gave us more detail:


     


    "The IT & Mobile Communications – comprised of Mobile Communications, Telecommunication Systems, Digital Imaging and Media Solution Center businesses – posted operating profits of 5.44 trillion won on 31.32 trillion won in revenue for the period. Out of the total IM earnings, the handset-making unit claimed 27.23 trillion won in revenue in the October-December quarter."

     


    Okay, so we know that the handset unit alone made ~$25 billion in revenue.  


     


    The handset unit revenue was 87% of the total IT&M revenue. If the operating profit ratio is the same, that's .87 * $5 billion = ~$4.35 billion handset operating profit.



    Sure, let me help you. Using the same methodology you show for Samsung (which, btw, you agree has operating income <$5B, which is exactly what I said in my original post).


     


    Let's take 4Q12, for example. Apple's segment reports show us iPad + iPhone revenue of $41.33B. Apple's operating margin is 31.57%. If the ratio is the same, estimated operating profit = $13.04B. Note: That is actually higher than what the article says it is, without even counting iPods (many of which are connected mobile devices too!).


     


    Got it?

  • Reply 87 of 181
    solipsismxsolipsismx Posts: 19,566member
    steven n. wrote: »
    Loss: "<span style="color:rgb(68,68,68);font-family:'lucida grande', 'lucida sans unicode', arial, sans-serif;line-height:20px;">the amount by which the cost of a business exceeds its revenue".  There is a distinct difference between profits and losses.  Profit implies a "gain" and loss implies ... well... a loss.</span>

    So anytime any company reports net profits/net income/net earnings they will write $0 if they are not in the black? Of course not, they would use a negative sign or parentheses instead of simply writing a zero, just we're seeing today with Nokia.
  • Reply 88 of 181
    steven n.steven n. Posts: 1,120member

    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.



    Actually nope.  I have friends that do this type of thing in their day job in Chicago (you know.  The Ph.D. in math types hired by trading firms) and they specifically look at the profits within an industry separately from the losses within the industry. They are modeled uniquely across calculations.

  • Reply 89 of 181
    jragosta wrote: »

    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).

    Boy you walked right into that. Now that you've acknowledged as true the entire basis of the counterargument how will you ever recover?
  • Reply 90 of 181
    dasanman69dasanman69 Posts: 12,980member
    solipsismx wrote: »
    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.

    You seemed to have neglected the word gain
  • Reply 91 of 181

    Quote:

    Originally Posted by wakefinance View Post



    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.


    First, the probability that, in the real world, industry profits would total exactly zero is perhaps zero (or close to that). So, it's kind of moot other than in its attempt to be clever.


     


    Second, I can't speak for jragosta (although I suspect he might agree), but I would VERY comfortably say that the company had more than 100% of the industry profit (= Net Income).

  • Reply 92 of 181

    Quote:

    Originally Posted by GadgetCanada View Post


    AccountingInsider...this comment section has gotten out of control



    Then read some other 'comment section'?

  • Reply 93 of 181
    solipsismxsolipsismx Posts: 19,566member
    briancpa wrote: »
    Net income can be negative.

    Profit cannot be negative.

    Losses cannot be positive.

    Accountant's used P&L statements everyday, which are different from Income Statements. But, only accountants would know that.

    1) You're not using the word in the intended form.

    2) Showing that the word loss specifically means loss does not prove that another word can't also refer to a loss with the proper qualifier is added.

    3) Do a search for negative profit and you'll get an excessive number of comments but I choose one on negative profit margins because it had a video. I though where test failed perhaps a voice might help: ]http://www.ehow.com/video_12221637_profit-margin-negative.html

    4) If you and others want to change the meaning of words, the entire structure of the English language and accounting practices that predate every living person on Earth be my guest but it'll be a hard battle.
  • Reply 94 of 181
    dasanman69dasanman69 Posts: 12,980member
    jragosta wrote: »
    Profits can be positive or negative. If you don't understand that very simple fact, you shouldn't be discussing it at all.

    No they cannot because nothing was gained.
  • Reply 95 of 181
    solipsismxsolipsismx Posts: 19,566member
    dasanman69 wrote: »
    You seemed to have neglected the word gain

    Are you going to say you can't have a negative gain or that jumbo shrimp are impossible?
  • Reply 96 of 181
    steven n.steven n. Posts: 1,120member

    Quote:

    Originally Posted by SolipsismX View Post





    So anytime any company reports net profits/net income/net earnings they will write $0 if they are not in the black? Of course not, they would use a negative sign or parentheses instead of simply writing a zero, just we're seeing today with Nokia.


    So does this article ( http://arstechnica.com/business/2012/10/amazon-earnings-slip-slightly-in-the-third-quarter/ )  state:


     


    As I think it should:


    "Amazon posts first loss in four years, LivingSocial investment did poorly"


     


    Or, as you suggest it should:


     


     


    "Amazon posts first negative profit in four years, LivingSocial investment did poorly"


     


    or even one of the two following:


    "Amazon posts first (profit) in four years, LivingSocial investment did poorly"


     


    "Amazon posts first -profit in four years, LivingSocial investment did poorly"


     


     


    Just asking 

  • Reply 97 of 181
    sockrolidsockrolid Posts: 2,788member


    Originally Posted by Tallest Skil View Post


    I just don't get that. They don't magically have more money than they do have, so whatever actual profits (positive money going into the hands of the companies) exist, THAT is the 100%.



     


    Agree.  But wouldn't it be great if we could eat negative-sized slices of key lime pie?


    Wouldn't we lose weight from the negative calories?

  • Reply 98 of 181
    So why doesn't Apple make a cheaper smart phone? All of the highly intelligent analysts insist that they must in order to survive. I guess companies that actually make profits on their products cannot survive when up against those subsidized by China and Google with their bottomless bank accounts.
  • Reply 99 of 181
    First, the probability that, in the real world, industry profits would total exactly zero is perhaps zero (or close to that). So, it's kind of moot other than in its attempt to be clever.

    Second, I can't speak for jragosta (although I suspect he might agree), but I would VERY comfortably say that the company had more than 100% of the industry profit (= Net Income).

    It's neither moot nor clever. It's math and your either with it or against it. If I were you I'd stay on math's side in this.
  • Reply 100 of 181

    Quote:

    Originally Posted by SolipsismX View Post





    1) You're not using the word in the intended form.



    2) Showing that the word loss specifically means loss does not prove that another word can't also refer to a loss with the proper qualifier is added.



    3) Do a search for negative profit and you'll get an excessive number of comments but I choose one on negative profit margins because it had a video. I though where test failed perhaps a voice might help: ]http://www.ehow.com/video_12221637_profit-margin-negative.html



    4) If you and others want to change the meaning of words, the entire structure of the English language and accounting practices that predate every living person on Earth be my guest but it'll be a hard battle.


     


    1. Yes I am


    2. Ok, what "qualifier" am I not reading in this article?


    3. Your link is talking about profit margins, which is not the same as profit. Profit *margin* is the change in profit (change can be positive or negative even though it has the word "profit" before it) given a change in production or some sort of other input.


    4. We do not want to change the meaning of words. In fact, I'm promoting proper English and the proper use of lingo, especially in the sense of accounting. I don't know alot about anothing except for the field that I have studied and worked in extensively. No where in our arguments are we trying to restructure a language.

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