avon b7

This article has so much spin on it that it seems to suffer from giddiness.

"The firm stated that Samsung Mobile posted operating profits of $8.3 billion, despite shipping more smartphones than Apple over the entire year. In the fourth quarter, Apple sold more iPhones than Samsung's entire range of smartphones, largely as a result of the massive recall of defective Galaxy Note 7 models."

Apple shipping more phones in one quarter than 'Samsung's entire range of smartphones' is of little value if during the year Samsung still outsold Apple (and probably by a handsome margin), even with an unprecedented product recall. However, the information is presented in such a way as to plant the lingering idea in the reader's head that Apple far outsold Samsung. Of course, the real information is there, just conveniently obfuscated.

In spite of the recall, $8.3 billion operating profits from the mobile division is still good business and let's not forget that Samsung also makes a profit out of every iPhone sold through the components it supplies to Apple.

The article feeds on Apple's lion's share of the profits in detriment to other brands whose business goal isn't even the same.

No manufacturer of low or mid tier phones has even the slightest intention of massive profit. Comparing those profits to those of Apple serves little or no purpose.

The article tip toes around the Android market space plucking out information to serve its purpose and ignoring anything that might reduce the rpm of the spin:

"Xiaomi, the third largest Chinese phone maker, has struggled with profitability. 

...

ZTE, which has been shipping a similar volume of phones compared to Xiaomi, was poised to report about a half billion dollars in profit last year but ended up reporting losses of $342 million "

Consecutive paragraphs. The first plants the idea of 'struggling with profitability' and singles out Xiaomi. Then it connects Xiaomi directly with ZTE in the next paragraph to continue the 'struggling with profitability' theme. It doesn't matter that the Xiaomi claim is based on little or no real financial information (at least the article doesn't offer any) and IIRC Xiaomi is a private company and doesn't have to publish such data. It just hangs off a claim that the company isn't even in the business making money off its handsets but seeks instead to monetise alternative revenue streams connected with the phone. If that's the case, why is it in an article on profitibility? The ZTE reference clearly states that it was a one-off charge that led to losses but that isn't too much of a problem as the 'struggling for profitability' hook had probably been swallowed already by the reader.

Then Huawei gets thrown into the mix.

Huawei is a newcomer to the handset market and if Apple has historically had an eye on Samsung, it now surely has the other on Huawei. And for very good reason.

Initially Huawei made handsets for others, then under its own name, then under its own sub brand. It has met every challenge it has set itself in this short time. No mean feat.

The article attempts to dampen the success of Huawei:

"An even greater contrast is apparent in China, where Huawei, despite being the largest phone maker in China, reportedly posted profits of only $929 million, which Strategy Analytics said represented 1.6 percent of global profits"

As I stated earlier, low and mid tier Android makers aren't even in the business of making large profits so that isn't really newsworthy, but Huawei has moved into the premium end and has publicly set its eyes on Apple as a reference point. That's newsworthy as it's a declaration of intent but it is still gearing up for action. The recent premium releases have been nothing more than a toe dipping exercise.

Given its 'new kid on the block' status, "only $929 million" is a clear misrepresentation and understatement.

Huawei hasn't set a foot wrong in its short time in the handset market and it hasn't even had a real presence in one of the world's top premium handset markets: the US.

The latest P10 line won't even be officially available on the US so it's clear that there will be some financial underperformance from Huawei in the premium segment. However, that looks like it could change soon. I hear that a deal is on the cards with a major US carrier and if it doesn't  get shot down by the US government, Huawei will implement exactly the same successful strategy it has implemented elsewhere in the world. That should cause noticeable disruption to the  US premium market and if that happens, Huawei should see profits grow.

MWC closed last week and most US correspondents commented on (and were openly surprised by) the overwhelming presence of Huawei in terms of handsets and marketing. In the fair itself, Huawei wasn't only pushing handsets but also its 5G proposals and that's where Huawei does its real business, selling its promotions to carriers that can later pickup huge discounts on Huawei handsets if they implement Huawei 4G (and later 5G) infrastructure solutions. The carriers then push those (very often premium) phones to attract customers. If those customers like the experience (remember that Huawei phones play very well with Huawei infraestructure), they have more chance of upgrading to another Huawei down the line.

It is too early to tell how this will pan out and it could all unravel, but that could happen to Apple too.

It's good for Apple shareholders to see the mobile division performing so well but that is its goal. They do not really compete in the low/mid tier. However, there are many other handset makers that simply do not have that same goal and are geared towards far lower margins. Comparing them to Apple serves little purpose.

ireland said:

sog35 said:

I think this makes PERFECT sense as far as price:

iPhone 7s - 32GB $650
iPhone 7s - 64GB $750
iPhone 7s - 128GB $850

iPhone X - 64GB $949
iPhone X - 128GB $1049

So basically you pay $199 more to jump from 7s to X. 

So Apple don't have a 64 GB 7 and you expect them to have a 64 GB 7s? Sog-logic.

And where is the iPhone 7 in there? Not even present as a second tier option? And If it were still available, would it slip into that guesstimate range of prices at sub $600?

Soli said:

As the largest NAND consumer this is heavily dependent on their ability to source the necessary components.

If they do move to 64GB I think we'll likely see less concern for IOS 11's size, which could impact those with older devices.

It's not about components. It's about marketing and greed. iPods were so successful in part because Apple invested in assuring capacity. That was then a problem for competitors as they couldn't get their hands on enough components, much less at the prices Apple was getting. 

kamilton said:

Mikeymike said:

Ebonydog said:

Ireland, anyone who was an Apple fan in the 90s can tell you why it matters. Back then Apple had similar advantages to what they have now: elegant design, solid hardware, even an ecosystem of more refined apps and fewer viruses. But they nearly died due to falling market share, which could be attributed to high prices and a lack of vision and discipline on Apples part. The result was a mass migration by developers to the Windows world (Adobe and others used to be Mac only). Yes market share, revenue and profit aren't everything, but they do afford a company the ability to be innovative and daring – the very qualities you want to talk about. Back to the story, what are we seeing in the Chinese market for Apple? Like Apple of the 90s, a lack of vision and high prices. it looks to me like the market is growing at an astonishing rate, and Apple isn't offering enough to justify the high prices. It isn't so much that Apple sales are slowing, it's that they are missing out on a huge wave of opportunity. That's cause for concern.

Good first post. (an anomaly)

Or, a new market evolves this way.  Apple is the premium brand offering the premium experience.  When a new market breaks, it's flooded with players, not unlike the early evolution of auto companies in America.  What do most people buy?  Model T or like cost vehicle.  Ultimately, what do they aspire to?  Porsche, Ferrari, etc.  Early market development, especially in a market highly controlled by government, finds many racing to the bottom for share.  These players are not providing a premium experience.  Probably barely acceptable experiences.  Slowly, customers will want something better.  Apple will be there.  We've seen this in America with the Andoid onslaught.  Poop don't float.  

The car analogy only works if you strip the smart out of 'smartphone' and even then, there are plenty of Android phones that offer the same premium product experience as Apple. 

When you put the 'smart' back in you see the importance of ecosystems (including cloud services). When you have your internet life tied to cloud services via a mobile device, switching 'car' (phone) isn't as straightforward as you might imagine. There are migration issues to take into account.

Android will always be more fragmented than iOS simply because new phones come out every month and there are hundreds of phones that vendors have to consider supporting or not. However, this is a far cry from the problems Android had with fragmentation just a few years ago. From a user perspective, it just isn't an issue. 

Security is far better than it was just a short time ago. The Google Play store is now cleaner than it was and I've been getting security updates pushed out to me that aren't rolled into major system upgrades.

Android users in the mid or lower tiers can aspire to an iPhone - or any other premium model from an Android maker if they want 'something better'.

What Apple has going for it, and it's a big plus, is that many of its users automatically look for another iPhone when but comes to upgrading. They just don't care about Android. They almost always lack any real knowledge on the state of Android and other manufacturers, though. It's the result of good press, marketing and having products that people are satisfied with.

If you fall out of favour with the press or the 'hipsters' you should go to yellow alert as your sales might take a knock sooner rather then later.

sog35 said:

avon b7 said:

"selectively targets Apple"

Yes!

However, this is stating the obvious. This how they try to paint themselves as a victim in this process.

The reality is that they were 'selectively targeted' but along with a whole host of other companies. This should surprise no one. If you think tax evasion is being practised, you single out the biggest offenders first. It's the same all over the world. I may be wrong but I think there are around 300 companies currently under investigation.

Apple wasn't even the first in line. 

http://europa.eu/rapid/press-release_IP-15-5880_en.htm

Apple says it paid all tax 'legally due' but ignores one of the key complaints aimed at them by the EU: that Apple's accounting setup allowed it to decide how much it would make available for taxation. So if they decided to make $100 out of $100,000,000 available for taxation they would pay all tax legally due on that sum.

We will see how things play out.

10 years to late.

If EU though Apple was breaking the law they should have said something 10 years ago. Apple has bent over backwards over the last 10 years to make sure their recognition of taxes was correct. EU/Ireland always gave the stamp of approval. Until now.

You can't change the rules midstream. Going forward Apple will follow any tax guidance given by the EU, but they will not go back 10 years and change the past.

Please read the article in the link. The necessary tools to initiate the investigations didn't exist until 2012. This particular investigation has taken three years.

As for stamps of approval I would say if you are declaring and paying your taxes, that is the end of the story, until an investigation is launched and finds otherwise.

And as for bending over backwards, what are you referring to? If you have read the investigation summary you will know that, if anything, Apple bent over backwards to move money away from taxation.