I am curious, why do you say that the iTunes business is just above break-even? I would assume it would be printing money (since apple just takes a cut of everything passing through the iTunes ecosystem, and the curating expense is fairly modest, especially for the music side).
For starters that what they originally stated and while I think they make it into a decent profit that most companies would love to have it's clear it's still a very small compared to the Mac leg of their business you're pooh-poohing because even the 30% they take per song or doesn't account for any of the overhead, doesn't account for what they would have negotiated for TV Shows and Movies (remember the struggle this was for them?), or any of the free products they offer, including all those HD iTunes U and video Podcasts I download in droves and never watch.
Furthermore, did you consider the datacenters, free iCloud-based services, free iOS and OS X apps, and free iOS and OS X OSes, along with the innumerable unknowns like proactive and reactive investments into boosting security. One Target-like breach of the 400(?) million CC's they have on file and it's going to besmirch their name and trust for a very long time.
BTW, Asymco stated a year ago that Apple takes 45% of the PC industry's profits. Horace figured out this is a 26% gross profit margin and a 18.9% net profit margin. According to BusinessInsider that's half the iPhone's gross profit margin but right on the money for the iPad's gross profit margin. Does that mean the iPad also isn't relevant?
For starters that what they originally stated and while I think they make it into a decent profit that most companies would love to have it's clear it's still a very small compared to the Mac leg of their business you're pooh-poohing because even the 30% they take per song or doesn't account for any of the overhead, doesn't account for what they would have negotiated for TV Shows and Movies (remember the struggle this was for them?), or any of the free products they offer, including all those HD iTunes U and video Podcasts I download in droves and never watch.
Furthermore, did you consider the datacenters, free iCloud-based services, free iOS and OS X apps, and free iOS and OS X OSes, along with the innumerable unknowns like proactive and reactive investments into boosting security. One Target-like breach of the 400(?) million CC's they have on file and it's going to besmirch their name and trust for a very long time.
BTW, Asymco stated a year ago that Apple takes 45% of the PC industry's profits. Horace figured out this is a 26% gross profit margin and a 18.9% net profit margin. According to BusinessInsider that's half the iPhone's gross profit margin but right on the money for the iPad's gross profit margin. Does that mean the iPad also isn't relevant?
Interesting. That would put the Mac profits at around 6% of the total, so I am within a binary order of magnitude. As for the iPad, it is a growing business, which is worth a lot, and I would not be surprised if it were to supplant the Mac Book Air business (if the rumors about the iPad pro are true) in a couple of years. I wonder if the iPad gross margin estimates also take account of the cut of LTE subscriptions that Apple presumably gets (I am guessing that a relatively small number of iPads are LTE-connected now, but that fraction is growing. By the way, it is curious that Apple does NOT offer LTE on the MBA/MBP, although at least some of the competition (Lenovo for sure) does.
Interesting. That would put the Mac profits at around 6% of the total, so I am within a binary order of magnitude. As for the iPad, it is a growing business, which is worth a lot, and I would not be surprised if it were to supplant the Mac Book Air business (if the rumors about the iPad pro are true) in a couple of years. I wonder if the iPad gross margin estimates also take account of the cut of LTE subscriptions that Apple presumably gets (I am guessing that a relatively small number of iPads are LTE-connected now, but that fraction is growing. By the way, it is curious that Apple does NOT offer LTE on the MBA/MBP, although at least some of the competition (Lenovo for sure) does.
1) I'm not getting where you get 6% of Apple's total profits from but note that's you're now saying it's double what you were stating earlier. Could you show your work for all the categories JeffDM listed?
2) If they do get any carrier cut from carrier-connected iPads it's surely very minimal and unlikely to even be a blip on the numbers we're talking for their caterogies.
3) I think most of us here have longed for cellular connected Mac notebooks for years and despite some old, non-fucntioning PowerBook prototypes that somehow leaked to eBay years ago Apple doesn't seem like they want to do it. For me, in 2014, I probably wouldn't pay the extra $10/month on top of the $130 charge for the HW just to connect when my iPhone and iPad can become a personal hotspot with minimal effort. My use case is maybe once every week or two, but I'm sure there are plenty that would use it but if it wasn't a good fit for Apple years ago I'd think it's even less of a fit now since so many can use a personal hotspot. Perhaps if they found a way to piggyback on the other antennas in the Mac and use a small PCIe card that can be bought after market, but that is what I wanted years ago back when they had something similar with first AirPort cards in PowerBooks.
4) I think the rumour of the 12" MacBook makes more sense. I think 11", especially with a 16:9 aspect ratio, doesn't make much sense, and an 11" and 13" MBA with a 13" MBP doesn't make much sense now that the MBPs have eschewed the ODD and 2.5" HDD/SSDs. I think a single 12" MBA would make the most sense in that category to help differentiate form the MBP line. I am not sure about the larger iPad. I can see some use cases but I'm not sure how they would "grow" the UI since making the pixels larger and/or enlarging the UI elements won't work or look as good as it does shrinking them like they did with the iPad mini.
Yes, but I was actually saying 3% of profits. I am not sure if Apple breaks profits out (I don't think so), but I am guessing that the Macs are much less profitable than the iPhone, which would bring the profit number below 10% (though probably still above 3%, it's true).
Fair points all, but a family composed of three very similar products is not the same as selling servers, workstations, laptops (of various flavors), etc, etc. Re search, I am guessing (but correct me if I am wrong), that Google is also dominant in Europe, and in neither US or Europe is it threatened. As for Japan, I thought the Yahoo PORTAL was big in Japan, not so much search, but I could certainly be wrong.
I would say that the U.S. is very much threatened for Google and so are the rest of their global markets. In Google's last earnings release they said that 40% of their search revenues (basically ALL of their revenues) now come from mobile and that they expect more than half of their revenues to come from mobile search by the end of this year. Now, if Apple devices now control 70% of all global mobile search, how is that not a major problem for Google? A day could come in the future where Apple decides to finally go thermonuclear on Goolge at Google's core business by simply flipping a switch. Can't say they wouldn't have it coming after android.
I would say that the U.S. is very much threatened for Google and so are the rest of their global markets. In Google's last earnings release they said that 40% of their search revenues (basically ALL of their revenues) now come from mobile and that they expect more than half of their revenues to come from mobile search by the end of this year. Now, if Apple devices now control 70% of all global mobile search, how is that not a major problem for Google? A day could come in the future where Apple decides to finally go thermonuclear on Goolge at Google's core business by simply flipping a switch. Can't say they wouldn't have it coming after android.
Are you sure Google said 40% of their current revenues come via mobile? Perhaps you confused that with 40% of YouTube traffic comes via mobile.
I don't think there's any doubt that at some point, and probably sooner rather than later, Apple will roll out their own search product. There's just too much money in advertising for Apple not to go after what they feel is their fair share. (all of it? )
I don't see Apple ever doing search. I think that it's impossible to create a working product. If websites themselves do a poor job of indexing and putting the right keywords up, tagging photos with names so they show up in search I don't think Apple can create web search with the quality they are known for.
But Google, they do this since 1998, it was their first endeavor and it is total crap. First hits contain links to 7 year old articles, displayed on a webpage that was designed by, well, I don't think it was even designed at all. Just a summery with links to either the highest paying site or most linked-to website. And no 'Next' button at top; need to scroll to the bottom.
At the very least they could put the more recent articles on top. They could show the domain name + TLD bold, so it would be easier to filter out sites you don't want to go to. Speaking of filtering, why can't I further refine my search by filtering or adding more criteria? Yes yes, the '+' and '-' signs help but they should do so much more, yet I get the feeling that since not enough people complain they just leave it all 'as is'. PageRank my booty, their search site is shyte.
I don't see Apple ever doing search. I think that it's impossible to create a working product. If websites themselves do a poor job of indexing and putting the right keywords up, tagging photos with names so they show up in search I don't think Apple can create web search with the quality they are known for.
But Google, they do this since 1998, it was their first endeavor and it is total crap. First hits contain links to 7 year old articles, displayed on a webpage that was designed by, well, I don't think it was even designed at all. Just a summery with links to either the highest paying site or most linked-to website. And no 'Next' button at top; need to scroll to the bottom.
At the very least they could put the more recent articles on top. They could show the domain name + TLD bold, so it would be easier to filter out sites you don't want to go to. Speaking of filtering, why can't I further refine my search by filtering or adding more criteria? Yes yes, the '+' and '-' signs help but they should do so much more, yet I get the feeling that since not enough people complain they just leave it all 'as is'. PageRank my booty, their search site is shyte.
Unfortunately various government bodies have decided they know how search results should be offered better than Google does. There's been quite a few modification over the past two years just to make the EU happy for instance. IMO what's its actually accomplished is a dumbing down of results so that Google competitors don't feel disadvantaged.
The biggest complainant by far has been Microsoft who hasn't been able to gain much traction going toe to toe in features and results with Bing. Crying "unfair" to US and EU regulatory bodies looks like one of their last tries at relevancy. Rumors are that Bing may be put on the market if they can't see better results soon. Maybe Apple might be interested in it?
So it's not their fault? Sounds..strange, but a possibility as I have indeed read governments are involved. Just not on a global scale.
No, I don't think Apple is interested in search. They make a lot of money, but I don't think this is their drive to do what they do. They also say that themselves, but that would be biased.
Are you sure Google said 40% of their current revenues come via mobile? Perhaps you confused that with 40% of YouTube traffic comes via mobile.
I don't think there's any doubt that at some point, and probably sooner rather than later, Apple will roll out their own search product. There's just too much money in advertising for Apple not to go after what they feel is their fair share. (all of it? )
Apple has been pretty good about sticking to stuff they are good at, and cloud services and search does not really seem to be it (iCloud is still not quite ready for prime time).
Unfortunately various government bodies have decided they know how search results should be offered better than Google does. There's been quite a few modification over the past two years just to make the EU happy for instance. IMO what's its actually accomplished is a dumbing down of results so that Google competitors don't feel disadvantaged.
The biggest complainant by far has been Microsoft who hasn't been able to gain much traction going toe to toe in features and results with Bing. Crying "unfair" to US and EU regulatory bodies looks like one of their last tries at relevancy. Rumors are that Bing may be put on the market if they can't see better results soon. Maybe Apple might be interested in it?
Interesting, but I don't think that the US has been monkeying around with Google results (the Eurocrats are an abomination upon this earth).
I do not understand why A lot of people negative about Apple it might be because it's a American company which is a shame because I believe it's a great company with vision and Great products . Go apple go USA be the biggest be the best
I wouldn't rule out Apple developing a search product. Hardly anybody expected Apple to develop Maps, and there's no money in that either (at least the way Apple's doing it).
That said, Google Search is far more dominant in its space than Google Maps was in its market. I'm sure that Apple would be delighted to have a product as well regarded as Google -- but not produced by Google -- available. But at this point, "Google" is more or less synonymous with "search" in the public imagination.
Interesting, but I don't think that the US has been monkeying around with Google results (the Eurocrats are an abomination upon this earth).
Yup, even the US. Google made voluntary concessions like letting websites keep their pages out of Google results, making it easier for companies to move their advertising campaigns to other search engines, that type of thing. Microsoft was upset because the FTC didn't make those voluntary concessions formalized in a Consent Decree.
<span style="line-height:1.4em;">I wouldn't rule out Apple developing a search product. Hardly anybody expected Apple to develop Maps, and there's no money in that either (at least the way Apple's doing it). </span>
<span style="line-height:1.4em;">That said, Google Search is far more dominant in its space than Google Maps was in its market. I'm sure that Apple would be delighted to have a product as well regarded as Google -- but not produced by Google -- available. But at this point, "Google" is more or less synonymous with "search" in the public imagination. </span>
Apple is happy to work with others on Search. It doesn't need to make its own. It just needs to move away from Googs. As for Apple Maps, it was expected once Google release Android and shunned Maps for iOS in favor of Android Maps.
Comments
For starters that what they originally stated and while I think they make it into a decent profit that most companies would love to have it's clear it's still a very small compared to the Mac leg of their business you're pooh-poohing because even the 30% they take per song or doesn't account for any of the overhead, doesn't account for what they would have negotiated for TV Shows and Movies (remember the struggle this was for them?), or any of the free products they offer, including all those HD iTunes U and video Podcasts I download in droves and never watch.
Furthermore, did you consider the datacenters, free iCloud-based services, free iOS and OS X apps, and free iOS and OS X OSes, along with the innumerable unknowns like proactive and reactive investments into boosting security. One Target-like breach of the 400(?) million CC's they have on file and it's going to besmirch their name and trust for a very long time.
BTW, Asymco stated a year ago that Apple takes 45% of the PC industry's profits. Horace figured out this is a 26% gross profit margin and a 18.9% net profit margin. According to BusinessInsider that's half the iPhone's gross profit margin but right on the money for the iPad's gross profit margin. Does that mean the iPad also isn't relevant?
For starters that what they originally stated and while I think they make it into a decent profit that most companies would love to have it's clear it's still a very small compared to the Mac leg of their business you're pooh-poohing because even the 30% they take per song or doesn't account for any of the overhead, doesn't account for what they would have negotiated for TV Shows and Movies (remember the struggle this was for them?), or any of the free products they offer, including all those HD iTunes U and video Podcasts I download in droves and never watch.
Furthermore, did you consider the datacenters, free iCloud-based services, free iOS and OS X apps, and free iOS and OS X OSes, along with the innumerable unknowns like proactive and reactive investments into boosting security. One Target-like breach of the 400(?) million CC's they have on file and it's going to besmirch their name and trust for a very long time.
BTW, Asymco stated a year ago that Apple takes 45% of the PC industry's profits. Horace figured out this is a 26% gross profit margin and a 18.9% net profit margin. According to BusinessInsider that's half the iPhone's gross profit margin but right on the money for the iPad's gross profit margin. Does that mean the iPad also isn't relevant?
Interesting. That would put the Mac profits at around 6% of the total, so I am within a binary order of magnitude. As for the iPad, it is a growing business, which is worth a lot, and I would not be surprised if it were to supplant the Mac Book Air business (if the rumors about the iPad pro are true) in a couple of years. I wonder if the iPad gross margin estimates also take account of the cut of LTE subscriptions that Apple presumably gets (I am guessing that a relatively small number of iPads are LTE-connected now, but that fraction is growing. By the way, it is curious that Apple does NOT offer LTE on the MBA/MBP, although at least some of the competition (Lenovo for sure) does.
1) I'm not getting where you get 6% of Apple's total profits from but note that's you're now saying it's double what you were stating earlier. Could you show your work for all the categories JeffDM listed?
2) If they do get any carrier cut from carrier-connected iPads it's surely very minimal and unlikely to even be a blip on the numbers we're talking for their caterogies.
3) I think most of us here have longed for cellular connected Mac notebooks for years and despite some old, non-fucntioning PowerBook prototypes that somehow leaked to eBay years ago Apple doesn't seem like they want to do it. For me, in 2014, I probably wouldn't pay the extra $10/month on top of the $130 charge for the HW just to connect when my iPhone and iPad can become a personal hotspot with minimal effort. My use case is maybe once every week or two, but I'm sure there are plenty that would use it but if it wasn't a good fit for Apple years ago I'd think it's even less of a fit now since so many can use a personal hotspot. Perhaps if they found a way to piggyback on the other antennas in the Mac and use a small PCIe card that can be bought after market, but that is what I wanted years ago back when they had something similar with first AirPort cards in PowerBooks.
4) I think the rumour of the 12" MacBook makes more sense. I think 11", especially with a 16:9 aspect ratio, doesn't make much sense, and an 11" and 13" MBA with a 13" MBP doesn't make much sense now that the MBPs have eschewed the ODD and 2.5" HDD/SSDs. I think a single 12" MBA would make the most sense in that category to help differentiate form the MBP line. I am not sure about the larger iPad. I can see some use cases but I'm not sure how they would "grow" the UI since making the pixels larger and/or enlarging the UI elements won't work or look as good as it does shrinking them like they did with the iPad mini.
You said revenue and profits.
Fair points all, but a family composed of three very similar products is not the same as selling servers, workstations, laptops (of various flavors), etc, etc. Re search, I am guessing (but correct me if I am wrong), that Google is also dominant in Europe, and in neither US or Europe is it threatened. As for Japan, I thought the Yahoo PORTAL was big in Japan, not so much search, but I could certainly be wrong.
I would say that the U.S. is very much threatened for Google and so are the rest of their global markets. In Google's last earnings release they said that 40% of their search revenues (basically ALL of their revenues) now come from mobile and that they expect more than half of their revenues to come from mobile search by the end of this year. Now, if Apple devices now control 70% of all global mobile search, how is that not a major problem for Google? A day could come in the future where Apple decides to finally go thermonuclear on Goolge at Google's core business by simply flipping a switch. Can't say they wouldn't have it coming after android.
Are you sure Google said 40% of their current revenues come via mobile? Perhaps you confused that with 40% of YouTube traffic comes via mobile.
I don't think there's any doubt that at some point, and probably sooner rather than later, Apple will roll out their own search product. There's just too much money in advertising for Apple not to go after what they feel is their fair share. (all of it?
But Google, they do this since 1998, it was their first endeavor and it is total crap. First hits contain links to 7 year old articles, displayed on a webpage that was designed by, well, I don't think it was even designed at all. Just a summery with links to either the highest paying site or most linked-to website. And no 'Next' button at top; need to scroll to the bottom.
At the very least they could put the more recent articles on top. They could show the domain name + TLD bold, so it would be easier to filter out sites you don't want to go to. Speaking of filtering, why can't I further refine my search by filtering or adding more criteria? Yes yes, the '+' and '-' signs help but they should do so much more, yet I get the feeling that since not enough people complain they just leave it all 'as is'. PageRank my booty, their search site is shyte.
Unfortunately various government bodies have decided they know how search results should be offered better than Google does. There's been quite a few modification over the past two years just to make the EU happy for instance. IMO what's its actually accomplished is a dumbing down of results so that Google competitors don't feel disadvantaged.
The biggest complainant by far has been Microsoft who hasn't been able to gain much traction going toe to toe in features and results with Bing. Crying "unfair" to US and EU regulatory bodies looks like one of their last tries at relevancy. Rumors are that Bing may be put on the market if they can't see better results soon. Maybe Apple might be interested in it?
http://bgr.com/2013/12/12/eu-google-antitrust-case-microsoft-eye-tracking/
http://searchengineland.com/potential-microsoft-ceo-elop-move-away-from-windows-176520
So it's not their fault? Sounds..strange, but a possibility as I have indeed read governments are involved. Just not on a global scale.
No, I don't think Apple is interested in search. They make a lot of money, but I don't think this is their drive to do what they do. They also say that themselves, but that would be biased.
Are you sure Google said 40% of their current revenues come via mobile? Perhaps you confused that with 40% of YouTube traffic comes via mobile.
I don't think there's any doubt that at some point, and probably sooner rather than later, Apple will roll out their own search product. There's just too much money in advertising for Apple not to go after what they feel is their fair share. (all of it?
Apple has been pretty good about sticking to stuff they are good at, and cloud services and search does not really seem to be it (iCloud is still not quite ready for prime time).
Unfortunately various government bodies have decided they know how search results should be offered better than Google does. There's been quite a few modification over the past two years just to make the EU happy for instance. IMO what's its actually accomplished is a dumbing down of results so that Google competitors don't feel disadvantaged.
The biggest complainant by far has been Microsoft who hasn't been able to gain much traction going toe to toe in features and results with Bing. Crying "unfair" to US and EU regulatory bodies looks like one of their last tries at relevancy. Rumors are that Bing may be put on the market if they can't see better results soon. Maybe Apple might be interested in it?
Interesting, but I don't think that the US has been monkeying around with Google results (the Eurocrats are an abomination upon this earth).
Apple is doomed and stock market is negative on apple.
I wouldn't rule out Apple developing a search product. Hardly anybody expected Apple to develop Maps, and there's no money in that either (at least the way Apple's doing it).
That said, Google Search is far more dominant in its space than Google Maps was in its market. I'm sure that Apple would be delighted to have a product as well regarded as Google -- but not produced by Google -- available. But at this point, "Google" is more or less synonymous with "search" in the public imagination.
Yup, even the US. Google made voluntary concessions like letting websites keep their pages out of Google results, making it easier for companies to move their advertising campaigns to other search engines, that type of thing. Microsoft was upset because the FTC didn't make those voluntary concessions formalized in a Consent Decree.
Apple is happy to work with others on Search. It doesn't need to make its own. It just needs to move away from Googs. As for Apple Maps, it was expected once Google release Android and shunned Maps for iOS in favor of Android Maps.