Sorry I don't think Apple's iTunes business makes them a lot of money. Maybe the Mac AppStore does but my guess is iOS and iTunes music is pretty much break even. At least it used to be.
Hasn't been break-even for some time apparently. Note that as of this year Apple does break out iTunes/software into it's own revenue category now. Best guesses put the net profits in the 2Billion+ range for 2012.
Hasn't been break-even for some time apparently. Note that as of this year Apple does break out iTunes/software into it's own revenue category now. Best guesses put the net profits in the 2Billion+ range for 2012.
But doesn't that include Mac software? I'd be curious to know what Apple's profit is on core iTunes (movies, music, books) and iOS App Store. I'm still skeptical about this idea that Apple could cut prices on hardware and make it up elsewhere. When has distributing other people's content been a profitable business? How much profit is Amazon making off Prime subscriptions?
As others have rolled their eyes, “Wait just a damn minute, Wall Street!” I thought you said market share is the be-all end-all of success. Now you’re saying Apple’s margins make you happy? Which is it, you supreme assholes?
If Wall Street is happy that makes me happy. I agree the analysts are idiots with their own agenda but as an AAPL investor I have no problem at all with them driving the price back up to where it should be. Speaking of douche analysts this bald guy from Yahoo hates Apple. In every single video he ALWAYS has something negative to say. What makes it worse it it is clear he has absolutely no technical understanding of why things like the A7 are such a big deal.
To me it seems like Apple would better benefit from a lower price and increasing their overall sale numbers. They could then just make for up lower cost in their 30% cut of every app sold and every in-app purchase.
"If" Apple was to find a magic number for decreasing margin but at the same time increasing share to the point where the eps rose... then Apple wouldn't have to worry about making up any amount.
To me it seems like Apple would better benefit from a lower price and increasing their overall sale numbers. They could then just make for up lower cost in their 30% cut of every app sold and every in-app purchase.
Considering how often it's reported that Apple have yield issues and trouble in the supply chain, selling more for less would seem like a very risky choice. Apple run a pretty slick shop by more accounts, but throwing a requirement for hundred of millions more units at them would be a strain on even their formidable resources.
That Steve Jobs quote about old Apple's problem of chasing profits over market share gets dragged out every now and then, but it doesn't really apply. Apple have a very healthy market share, and pushing it even further might be an overstretch.
If we get past earnings without harm - I think $575-$600 is doable.
I think $640 is where Apple should be if you actually look at the numbers and understand the market. But that will take some time, around 6 months to a year to get back to that level. there will be resistance around the $560 mark.
Apple has really only been competing in certain markets and countries. Now they have added T-Mobile, DoCoMo, China Mobile, and many other carriers around the world. That alone will mean very decent growth. Samsung was already in all of these countries and carriers so they really can't grow much more than they already have.
I see the media meme this morning is "the software might be free but boy will you pay a pretty penny for the hardware!"
Yes, that's actually the bigger story than the hardware launches. I would think this shift to free OSX/iWork/iLife upgrades will result in a small hit to earnings this quarter, the only thing that will prop it up is increased units sold (hardware). However, I'm sure most analysts see this as an intelligent long term decision. Shoring up the ecosystem will increase units sold and retention. And let's not forget that revenue is not only from hardware but also from iTunes and Apps (now AND in the future). I see iTunes and Apps as a growing revenue stream that will (by itself) make up for the free OSX/iWork/iLife upgrades and then some. There will be a day when majority will shed cable and move to subscription or PAYG media consumption via Apple servers.
... I see iTunes and Apps as a growing revenue stream that will (by itself) make up for the free OSX/iWork/iLife upgrades and then some. There will be a day when majority will shed cable and move to subscription or PAYG media consumption via Apple servers.
Bingo. This is what Apple's future television strategy will probably be. There may or may not ever be an "Apple branded television set." But there absolutely has to be some kind of un-bundled Apple-delivered television streaming solution. Apple will eventually need to shift its business model to be far more content- and services-oriented.
I think TV content and services will eventually be their major revenue stream outside hardware. The server + OS + terminal hardware + app infrastructure is already there. iTunes Festival is a sneak peek: live streaming plus pre-recorded on-demand viewing on any Apple device, from 4" iPhone to your 50"+ living room TV screen. It's a massively successful and extremely popular proof-of-concept.
Microsoft is now facing pricing pressure from Apple as well as Google, and not just in mobile any more.
Will be interesting to see how Microsoft prices legacy Windows 9.
MS should start supplying all their software for free too now. They'd last a few years on what Ballmer hasn't pissed away I'd think.
Wow, this is the first time is a while that AAPL hasn't lost 10% in the days after a major announcement (of course it always recovers, like after the recent iPhone announcement). It tried yesterday (was briefly down a couple buck during the keynote), but the hits just kept coming yesterday.
My only disappointments were lack of TouchID, which I suspect is a supply issue, and mostly the lack of a new cinema display (which would be low volume, but still). Seriously, who's going to spend $5K on a (reasonably spec'ed) Mac Pro, and hook it up to a 4 year old monitor design.
Given all the great updates yesterday, though, I was surprised at both how bored Tim/Phil/Craig were (they didn't seem enthused or even prepared), and the audience too. What does it take to get some applause from that crowd!
There seems to be no real appreciation for the iWorks updates (both native and iCloud version), but those are amazing! The new iWorks (on Mac, iOS and iCloud) makes google docs look like WordStar. But I digress.
They have until orderability for the Mac Po is turned on sometime around December to get a 4K display done.
I would think this shift to free OSX/iWork/iLife upgrades will result in a small hit to earnings this quarter, the only thing that will prop it up is increased units sold (hardware).
Wall Street Analysts and media people who attended the Apple event.... hmmm.
If you watched the streaming video feed of the show and saw the people in the audience it would just re-enforce the idea that those people are a bunch of d-bag posers. As in "All Things D-Bag".
And if you looked close you could have spotted the "Double D's" - those media types who have also tried to get rich off of writing stories and books about Steve Jobs.
They are not in any shape or form "essential services" in our society.
Comments
Hasn't been break-even for some time apparently. Note that as of this year Apple does break out iTunes/software into it's own revenue category now. Best guesses put the net profits in the 2Billion+ range for 2012.
As others have rolled their eyes, “Wait just a damn minute, Wall Street!” I thought you said market share is the be-all end-all of success. Now you’re saying Apple’s margins make you happy? Which is it, you supreme assholes?
**** wall st. bunch of crooks.
*thumbs up. Spot on.
Lemon Bon Bon.
If Wall Street is happy that makes me happy. I agree the analysts are idiots with their own agenda but as an AAPL investor I have no problem at all with them driving the price back up to where it should be. Speaking of douche analysts this bald guy from Yahoo hates Apple. In every single video he ALWAYS has something negative to say. What makes it worse it it is clear he has absolutely no technical understanding of why things like the A7 are such a big deal.
http://finance.yahoo.com/blogs/breakout/suddenly-microsoft-not-google-apple-hates-132745760.html
To me it seems like Apple would better benefit from a lower price and increasing their overall sale numbers. They could then just make for up lower cost in their 30% cut of every app sold and every in-app purchase.
"If" Apple was to find a magic number for decreasing margin but at the same time increasing share to the point where the eps rose... then Apple wouldn't have to worry about making up any amount.
Finding that magic number is the trick.
Right now... margins... the devil you know.
If we get past earnings without harm - I think $575-$600 is doable.
To me it seems like Apple would better benefit from a lower price and increasing their overall sale numbers. They could then just make for up lower cost in their 30% cut of every app sold and every in-app purchase.
Considering how often it's reported that Apple have yield issues and trouble in the supply chain, selling more for less would seem like a very risky choice. Apple run a pretty slick shop by more accounts, but throwing a requirement for hundred of millions more units at them would be a strain on even their formidable resources.
That Steve Jobs quote about old Apple's problem of chasing profits over market share gets dragged out every now and then, but it doesn't really apply. Apple have a very healthy market share, and pushing it even further might be an overstretch.
If we get past earnings without harm - I think $575-$600 is doable.
I think $640 is where Apple should be if you actually look at the numbers and understand the market. But that will take some time, around 6 months to a year to get back to that level. there will be resistance around the $560 mark.
Apple has really only been competing in certain markets and countries. Now they have added T-Mobile, DoCoMo, China Mobile, and many other carriers around the world. That alone will mean very decent growth. Samsung was already in all of these countries and carriers so they really can't grow much more than they already have.
I see the media meme this morning is "the software might be free but boy will you pay a pretty penny for the hardware!"
Yes, that's actually the bigger story than the hardware launches. I would think this shift to free OSX/iWork/iLife upgrades will result in a small hit to earnings this quarter, the only thing that will prop it up is increased units sold (hardware). However, I'm sure most analysts see this as an intelligent long term decision. Shoring up the ecosystem will increase units sold and retention. And let's not forget that revenue is not only from hardware but also from iTunes and Apps (now AND in the future). I see iTunes and Apps as a growing revenue stream that will (by itself) make up for the free OSX/iWork/iLife upgrades and then some. There will be a day when majority will shed cable and move to subscription or PAYG media consumption via Apple servers.
"But it has the potential to cause a world of hurt to competitors who still rely on software revenues to drive their earnings," he said.
Microsoft is now facing pricing pressure from Apple as well as Google, and not just in mobile any more.
Will be interesting to see how Microsoft prices legacy Windows 9.
... I see iTunes and Apps as a growing revenue stream that will (by itself) make up for the free OSX/iWork/iLife upgrades and then some. There will be a day when majority will shed cable and move to subscription or PAYG media consumption via Apple servers.
Bingo. This is what Apple's future television strategy will probably be. There may or may not ever be an "Apple branded television set." But there absolutely has to be some kind of un-bundled Apple-delivered television streaming solution. Apple will eventually need to shift its business model to be far more content- and services-oriented.
I think TV content and services will eventually be their major revenue stream outside hardware. The server + OS + terminal hardware + app infrastructure is already there. iTunes Festival is a sneak peek: live streaming plus pre-recorded on-demand viewing on any Apple device, from 4" iPhone to your 50"+ living room TV screen. It's a massively successful and extremely popular proof-of-concept.
"Content is king. Distribution is King Kong."
- Old Hollywood Saying
That's on every other day of the week. They change daily.
MS should start supplying all their software for free too now. They'd last a few years on what Ballmer hasn't pissed away I'd think.
They have until orderability for the Mac Po is turned on sometime around December to get a 4K display done.
It'll be a very small hit to the financials.
So true but at least their consensus opinions are the same: Apple is doooomed! (TM)
Wall Street Analysts and media people who attended the Apple event.... hmmm.
If you watched the streaming video feed of the show and saw the people in the audience it would just re-enforce the idea that those people are a bunch of d-bag posers. As in "All Things D-Bag".
And if you looked close you could have spotted the "Double D's" - those media types who have also tried to get rich off of writing stories and books about Steve Jobs.
They are not in any shape or form "essential services" in our society.