40% is gross profit margin. That does not include adminstrative costs, marketing costs, taxes, ect
25% is net margin. Basically the amount Apple keeps after all expenses are paid
It is very low. People who say Apple products are overpriced are idiots. Quality and great customer service cost money
Even if their net profit margin was 300%, it wouldn't mean there product is overpriced unless the price of the item was higher than the number of units they can produce. If the excessive, long-term, and YoY run on the iPhone has taught us anything about Apple is that they sell below their equilibrium price point, at least within a launch earnings quarter.
Because Apple's economies of scale are better due to their Hugh unit sales, their vertical and horizontal integration allows for reduced engineering costs, and mindshare which allows them to generate more revenue through less advertising, they would make more profit per unit others CE companies. This should be championed, not used in a weak attempt to tear down the company.
So if I believe Apple is selling below their equilibrium price, it would be foolish for them to leave money on the table, as it were. So what benefit does Apple get from making the iPhone less expensive than it should be? I think it comes back to the earning reports showing just how efficient Apple is run. They try to keep their margins at a certain rate. If they kept growing substanitally every quarter at some point there would be a legitimate issue with their margins affecting their mindshare. I think coming in below the equilibrium price and having the resultant scarcity when a most of their new product launches helps their bottom line in the long-term.
I'm not saying otherwise. Re-read my post, please.
Your issue here is that, for some reason, they are making all the correct decisions, with the mentality of Blackberry fanboys. "Do you think you know better than people at Apple?"
1) I never read your original post so I have no idea what you were initially trying to state. My comment is a reply to @sog35. You're more than welcome to reply to it, as this an open forum, but it was building upon what he wrote.
2) The mentality of Blackberry nee Research in Motion had two modes. The first one, was to sell at the highest possible price and invest far too little in research. They had a nifty product for a spell but they failed to push the envelope. They thought Steve Jobs' demo was fabricated as they believed it was impossible for the system to be that responsive. For this reason, they were able to be capsized by Apple and then rolled over by Android and eventually WinPhone. Apple, on the other hand has considered to innovate their HW and SW every fucking year which is the opposite of Blackberry's pre-iPhone mentality of low cost investments.
Post-iPhone, it was all about trying to tread water after being capsized. That's why the BOGO deals, race to get a "me too" full touchscreen phone (which was capacitive) and multiple underdeveloped mobile OSes were pushed to market under the desperate guise of trained Olympians while being nothing but stillborn fetuses. Apple, on the other hand, has gone the opposite route with long-term strategies. HW and SW integration that takes several years to develop. This is because Apple doesn't manage itself like Blackberry where the next quarter results are the only thing that matters.
As to why you have an issue with Apple doing long-term investing and creating higher profit margins through better management while selling a better device for less money and below their equilibrium price point, I couldn't tell you, but for some reason "you think you know better than people at Apple."
I'm wondering about the "spillover effect" of the repuation-hit onto the rest of Samsung's smartphones.
This disaster is only for the Note 7 product. But will average consumers make that distinction or just hear "Samsung" and associate the safety issue -- in their minds -- with other Samsung phones (e.g., S7)? If so, the damage (financial & brand) goes much farther than the market-value of the Note 7 product..
Unfortunately many of the people that buy Samsung phones won't make the connection. I've had several Samsung owners try and tell me it was the new iPhone 7+ that's been exploding, not the Note 7. These people are going to be going out buying new Samsung phones and thinking they have a great device because they hate iPhones so much they assume any negative press coverage they hear about a smartphone relates to the iPhone.
I'm wondering about the "spillover effect" of the repuation-hit onto the rest of Samsung's smartphones.
This disaster is only for the Note 7 product. But will average consumers make that distinction or just hear "Samsung" and associate the safety issue -- in their minds -- with other Samsung phones (e.g., S7)? If so, the damage (financial & brand) goes much farther than the market-value of the Note 7 product..
Unfortunately many of the people that buy Samsung phones won't make the connection. I've had several Samsung owners try and tell me it was the new iPhone 7+ that's been exploding, not the Note 7. These people are going to be going out buying new Samsung phones and thinking they have a great device because they hate iPhones so much they assume any negative press coverage they hear about a smartphone relates to the iPhone.
Even on AnandTech's review of the iPhone 7 series, people were saying how much the battery sucks even though there are detailed tests comparing it's battery life to other devices where it best all or nearly all the competition, as it does most of the time. Just like Trump supporters who claim that detailing how to sexually assault a women when you're rich and famous is the same as using crude language to describe a consensual encounter, they are choosing to keep themselves in the dark.
Sorry you only have 34 posts. And not worth my time. Come back when you have some experience and knowledge. For now go brush up your posting skills at the Verge.
That's really classy of you, sog35. Obviously English isn't my first language, and obviously I made some mistakes while typing. However, I think that any reasonable adult would understand that, compliment anyone that actually talks/understands/writes/tries in more than 1 language, specially on an US-based website, with everything that comes attached with it, namely people without proper education that don't actually believe that there are civilizations outside the US.
Anyway, looking at your post history, mom and daddy must be proud. Again, that was really classy.
Obviously you read my post. Obviously you don't have the ability to make a proper assessment and answer accordingly. Obviously your way is the irrational, fanboyism, trollish, way. You seem to have issues with the real world and real issues.
*Just saw some of your posts defending anemic iOS devices that can't actually handle 3 Safari tabs in memory; *Of course, you defend 700$ Smartphones that can't handle the Apple suit of Apps, 1 game, 20 songs and 20 photos and still update.
As expected.
Obviously, you know the word obviously and obviously you use it too much. There is a rule at AI: "You are only allowed to disrespect Sog once a month." Obviously, That's your quota.
Sorry you only have 34 posts. And not worth my time. Come back when you have some experience and knowledge. For now go brush up your posting skills at the Verge.
You arrogant twat.
You only had 34 posts at one time and there are many here who wish that was still the case.
You wish that people would ignore, disrespect & dismiss you out of hand because of a low post count?
No...I thought not.
You lost all credibility with me and many others when you failed to uphold your self-ban.
Please feel free if you Did.Not.Read this because of my low post count.
You are an opinionated wanker and arrogant asshole.
Just waiting for the loser trolls to show up and say:
1. Don't celebrate. Failure of Samsung is bad for Apple, cause competition is good 2. Don't celebrate. Since this could have easily happened to Apple 3. Don't celebrate. Because some iPhones also exploded (ignoring that those phones were damaged and smashed) 4. Don't celebrate. Samsung had courage to do the 'right thing'
Ok trolls. Now don't waste your time responding. Since I already brought up all your talking points.
Look, Sog35: The iPhone is, by far, the best smartphone on the Market, as a standalone device. Once you are into the Apple ecosystem, it becomes eons ahead as a product.
Can we agree on that?
However, despite all of that, Apple is really one greedy company that will try to do everything they can to improve immediate profit, at the cost of user experience and at the cost of future profit. Do you want examples?
TN panels on MBAirs.
16 GB of base memory on iOS devices, until the 7.
1 GB of RAM on iOS devices, until the 6.
Non-SSDs on Macs, even ones costing thousands of dollars;
128 GB base SSD storage on rMBPs.
Selling the MBP.
Non-stereo audio when filming videos with an iPhone.
a8 chip on Apple TV4.
Worse camera hardware than pretty much all competition, and worse than the s7 after the iPhone 7.
All of those decisions, if made from other OEMs, would quickly burn down the company and their products even faster than this Note7 fiasco. Those decisions impact greatly the experience, and made all of those products pieces of garbage. It's disgusting. It's also not up for discussion that those things are actually true. They are. Imagine if Microsoft made a computer with a TN panel. Or without an SSD. Or if Samsung made a flagship with camera hardware as pathetic as the 6 series (6s included), or 1GB of RAM until 2014.
Yes, a 1GB iPhone would always be much better than an Android device with 1GB, as far as memory management goes. However, Apple could do even better if they actually offered users what they could offer. As such, regardless of your position and opinion, everybody know that we all have the thank Samsung, and Samsung only, for actually having devices with proper base storage, proper memory management, an awesome SoC, and good battery life.
What pisses me off even more is that Apple could easily have the best mobile camera (they have the best software and best SoC, after all), but they don't, because they wanted to count some beans instead of putting a sensor at least, as big as Samsung was able to do 1 year ago. But no, gotta cheap out and go the gimmicky way.
Just like without Apple we would all be using Nokias 3310 and Blackberries, without Samsung your iPhone would still have 8GB of storage and 256MB of ram.
If you are reasonable, if anyone here is, then we can all agree on that.
You have it backwards. The reason why other companies, mainly Samsung, include more of or better spec hardware is because they have to complete with the iPhone as a whole. It's the only way Samsung can differentiate their products. Samsung always has to make a point about what they do better in their phone than an iPhone. Even if those points don't really add too much into making their phones better than an iPhone as a whole. Apple innovates at their own pace, regardless of what Samsung does. It's like that wine ad from Paul Masson …… "We will sell no wine before its time". You are wrong if you think Apple only innovates because of what Samsung does.
For instance, more memory. Samsung is stuck with Android. After adding their own bloatware, Android consumes more memory. A 16GB Samsung only has a little over 8GB left while a 16GB iPhone with iOS has 12GB left. So Apple can get away with just 16GB for a longer period of time.
Samsung has to include more RAM because Android is not optimize for the CPU. Apple optimizes iOS with their CPU because they design both. Thus they can get away with less cache and RAM. Where as Samsung must add more of both in order to have the same users experience with Android, that an iPhone user has with iOS. Apple didn't include more RAM or cache because of what Samsung was doing. Apple added more RAM and cache when they were able to do so without compromising battery life.
Camera. The final jpeg photo depends on more than just the quality of the hardware, it also depends on the software that compresses the image. Even if all those other phones have better hardware, they all don't take pictures that are better than an iPhone. Plus many of those high mega pixel cameras would not fit in an iPhone.
Battery. I remember when Samsung made a BIG point about their phones having user replaceable battery. But their phones only lasted a little more than half as long as an iPhone so to make it through the day Samsung phone owners had to carry an extra battery (along with a charger). While an iPhone, for most, lasted 8 hours with their battery. It was not an advantage at all to have user replaceable batteries. And now Samsung don't have user replaceable batteries (at least on their flag ship line). Plus there has always been third party battery packs for iPhones, for those that needed the extra time.
CPU. Samsung always seems to make a point about how much faster their CPU's are but in real life application they aren't. They are only faster on paper specs. Android is such bloatware that in real life, their phones feels much slower than an iPhone. So they need a faster CPU just to stay even with an iPhone. Providing you don't cheat, like Samsung did with one of their faster CPU. It seems that Samsung at one time did have a much faster CPU but if the CPU were allow to be used at full spec speed, the battery on their phone would't last more than several hours. So they throttled the speed of the CPU in real life use, but operated at full speed during a test. Much like what VW did with their cars during a smog test. That's how Samsung innovates. LOL. You can bet that Apple would never make the decision to put in a faster CPU at the potential cost of cutting their battery life in half, just because they can cheat and lie about it.
The thing about Apple is that they sell their hardware at set price points. The basic Macbook always start at $999. Their newest top of the line iPhone always start at $599. Their base iMac at $1299. And so on. Apple don't sell dozens of different version of their hardware to make up for different hardware configurations. (Except for more RAM options.) They sell only a few upgrade versions. So what Apple do is weigh in on how much cheaper old components are and what new components they can add in order to keep their hardware at the same starting price point. Apple do not sell last year's model at a lower price. That would be competing against themselves. They don't sell the newer models at a higher price. They sell the new models, with some newer hardware, at the same starting price as the older models they replaced. But in order to do that, there has to be a compromise. What that is is that if the lower cost of older hardware doesn't make up for all the extra cost of newer hardware available, then newer hardware that add the least to the user experience is not installed, in order to keep the price at the same starting price as the older models they replaced. Otherwise Apple would be selling different Mac models at every $100 price point, like Dell or HP.
You make it seem as though Apple just keep the profit from the lower cost of older components each year and that they don't improve their hardware at all. That is not the case at all. Every year their products gets better and faster with newer components. But at the same price as the older model they replaced. The lower cost of older components pays for the cost of the newer components. So how much newer components Apple can include with each upgrade is dependent upon how much they save on the older components. Apple don't make more and more profit with each upgrade, just because they are still using some older components, as you seem to think. They are not being greedy. In fact, their Mac line has the least GROSS profit margin of all their products. It's around 22% to 30%. It's the 50% and above GROSS profit margin of their iPhones that brings Apple average GROSS profit margin to about 40%. Before the iPhone, iPod, iPad, iTunes and Apps, Apple average GROSS profit margin, on good quarters, was around 28%. It's still a lot of money because 28% of the $1300 average selling price of Macs is more (not by much) than the 55% of the $599 ASP of iPhones. But apple sells a lot more iPhones than Macs.
Just chiming in to say that I STILL "defend" the iPhone 5s screen size.
I have been using a 6s for a year now, and I still miss the one-handed usability of my old 5s. When my significant other got an SE, it was a bit like coming home. If the next flagship is available in the smaller size, I'm buying.
Lesson #1: When you live off or steal other people's designs and IP, you destroy, or at least demean, your own design capabilities. You can't build it back up overnight.
Lesson #2: Quality, quality, quality. No compromises. Quality "costs" what it costs in the short run, but it works out cheaper in the long run.
Lesson #3: Customer, customer, customer. Once gone, they don't come back easily. Especially when there are alternatives.
From here on, Samsung slowly dies. Period.
I don't disagree with any of your points...except, perhaps, your conclusion. Samsung is quite diversified, and, I think, more integral to South Korea's economy than any of the manufacturing companies that the U.S, government, or other governments, have aided, under the philosophy of "too big to fail". Unless by "slowly dies" you are thinking in decades...?
Samsung forever has Apple in their commercials. Always comparing themselves to Apple. This was inevitable. They don't focus on themselves, they focus on the competition. The commercial where everyone is gathered around a charging station at the airport with their iPhones immediately comes to mind. There are countless others. Lets see this flipped with everyone holding Notes around an airport power station. Wouldn't end well for them. Apple strictly focuses on Apple, making themselves better, so that commercial would never happen anyway.
What you're saying isn't true. Apple had a long-running campaign called 'Get a Mac'.
The whole point was comparing Macs to the PC competition. The most memorable lines were delivered by John Hodgman as 'PC'. Poking fun at the competition was the name of the game.
Apple has avoided this in marketing of the iPhone, and lately the Mac as well, but I wouldn't say Apple would NEVER pursue this type of ad again.
what he said is true. you're citing an ad campaign from years and years ago when apple was still an underdog. that was then, this is now. and what he said about apple stands.
If the present ("now" in your comment) is the only valid truth, how do you defend the original commenter's claiming something "Apple would NEVER pursue" (an obvious future reference) as valid?
I choose to look at the world with an eye to the past, present and future.
Comments
2) The mentality of Blackberry nee Research in Motion had two modes. The first one, was to sell at the highest possible price and invest far too little in research. They had a nifty product for a spell but they failed to push the envelope. They thought Steve Jobs' demo was fabricated as they believed it was impossible for the system to be that responsive. For this reason, they were able to be capsized by Apple and then rolled over by Android and eventually WinPhone. Apple, on the other hand has considered to innovate their HW and SW every fucking year which is the opposite of Blackberry's pre-iPhone mentality of low cost investments.
Post-iPhone, it was all about trying to tread water after being capsized. That's why the BOGO deals, race to get a "me too" full touchscreen phone (which was capacitive) and multiple underdeveloped mobile OSes were pushed to market under the desperate guise of trained Olympians while being nothing but stillborn fetuses. Apple, on the other hand, has gone the opposite route with long-term strategies. HW and SW integration that takes several years to develop. This is because Apple doesn't manage itself like Blackberry where the next quarter results are the only thing that matters.
As to why you have an issue with Apple doing long-term investing and creating higher profit margins through better management while selling a better device for less money and below their equilibrium price point, I couldn't tell you, but for some reason "you think you know better than people at Apple."
Unfortunately many of the people that buy Samsung phones won't make the connection. I've had several Samsung owners try and tell me it was the new iPhone 7+ that's been exploding, not the Note 7. These people are going to be going out buying new Samsung phones and thinking they have a great device because they hate iPhones so much they assume any negative press coverage they hear about a smartphone relates to the iPhone.
sheesh
You only had 34 posts at one time and there are many here who wish that was still the case.
You wish that people would ignore, disrespect & dismiss you out of hand because of a low post count?
No...I thought not.
You lost all credibility with me and many others when you failed to uphold your self-ban.
Please feel free if you Did.Not.Read this because of my low post count.
You are an opinionated wanker and arrogant asshole.
Have a nice day!
You have it backwards. The reason why other companies, mainly Samsung, include more of or better spec hardware is because they have to complete with the iPhone as a whole. It's the only way Samsung can differentiate their products. Samsung always has to make a point about what they do better in their phone than an iPhone. Even if those points don't really add too much into making their phones better than an iPhone as a whole. Apple innovates at their own pace, regardless of what Samsung does. It's like that wine ad from Paul Masson …… "We will sell no wine before its time". You are wrong if you think Apple only innovates because of what Samsung does.
For instance, more memory. Samsung is stuck with Android. After adding their own bloatware, Android consumes more memory. A 16GB Samsung only has a little over 8GB left while a 16GB iPhone with iOS has 12GB left. So Apple can get away with just 16GB for a longer period of time.
Samsung has to include more RAM because Android is not optimize for the CPU. Apple optimizes iOS with their CPU because they design both. Thus they can get away with less cache and RAM. Where as Samsung must add more of both in order to have the same users experience with Android, that an iPhone user has with iOS. Apple didn't include more RAM or cache because of what Samsung was doing. Apple added more RAM and cache when they were able to do so without compromising battery life.
Camera. The final jpeg photo depends on more than just the quality of the hardware, it also depends on the software that compresses the image. Even if all those other phones have better hardware, they all don't take pictures that are better than an iPhone. Plus many of those high mega pixel cameras would not fit in an iPhone.
Battery. I remember when Samsung made a BIG point about their phones having user replaceable battery. But their phones only lasted a little more than half as long as an iPhone so to make it through the day Samsung phone owners had to carry an extra battery (along with a charger). While an iPhone, for most, lasted 8 hours with their battery. It was not an advantage at all to have user replaceable batteries. And now Samsung don't have user replaceable batteries (at least on their flag ship line). Plus there has always been third party battery packs for iPhones, for those that needed the extra time.
CPU. Samsung always seems to make a point about how much faster their CPU's are but in real life application they aren't. They are only faster on paper specs. Android is such bloatware that in real life, their phones feels much slower than an iPhone. So they need a faster CPU just to stay even with an iPhone. Providing you don't cheat, like Samsung did with one of their faster CPU. It seems that Samsung at one time did have a much faster CPU but if the CPU were allow to be used at full spec speed, the battery on their phone would't last more than several hours. So they throttled the speed of the CPU in real life use, but operated at full speed during a test. Much like what VW did with their cars during a smog test. That's how Samsung innovates. LOL. You can bet that Apple would never make the decision to put in a faster CPU at the potential cost of cutting their battery life in half, just because they can cheat and lie about it.
The thing about Apple is that they sell their hardware at set price points. The basic Macbook always start at $999. Their newest top of the line iPhone always start at $599. Their base iMac at $1299. And so on. Apple don't sell dozens of different version of their hardware to make up for different hardware configurations. (Except for more RAM options.) They sell only a few upgrade versions. So what Apple do is weigh in on how much cheaper old components are and what new components they can add in order to keep their hardware at the same starting price point. Apple do not sell last year's model at a lower price. That would be competing against themselves. They don't sell the newer models at a higher price. They sell the new models, with some newer hardware, at the same starting price as the older models they replaced. But in order to do that, there has to be a compromise. What that is is that if the lower cost of older hardware doesn't make up for all the extra cost of newer hardware available, then newer hardware that add the least to the user experience is not installed, in order to keep the price at the same starting price as the older models they replaced. Otherwise Apple would be selling different Mac models at every $100 price point, like Dell or HP.
You make it seem as though Apple just keep the profit from the lower cost of older components each year and that they don't improve their hardware at all. That is not the case at all. Every year their products gets better and faster with newer components. But at the same price as the older model they replaced. The lower cost of older components pays for the cost of the newer components. So how much newer components Apple can include with each upgrade is dependent upon how much they save on the older components. Apple don't make more and more profit with each upgrade, just because they are still using some older components, as you seem to think. They are not being greedy. In fact, their Mac line has the least GROSS profit margin of all their products. It's around 22% to 30%. It's the 50% and above GROSS profit margin of their iPhones that brings Apple average GROSS profit margin to about 40%. Before the iPhone, iPod, iPad, iTunes and Apps, Apple average GROSS profit margin, on good quarters, was around 28%. It's still a lot of money because 28% of the $1300 average selling price of Macs is more (not by much) than the 55% of the $599 ASP of iPhones. But apple sells a lot more iPhones than Macs.
The Note7 is dead... Long live the Not7.
I have been using a 6s for a year now, and I still miss the one-handed usability of my old 5s.
When my significant other got an SE, it was a bit like coming home. If the next flagship is available in the smaller size, I'm buying.
#bombgate
Samsung is quite diversified, and, I think, more integral to South Korea's economy
than any of the manufacturing companies that the U.S, government, or other governments,
have aided, under the philosophy of "too big to fail".
Unless by "slowly dies" you are thinking in decades...?
I choose to look at the world with an eye to the past, present and future.
It's probably a better way to live.
Your mileage may vary.