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2009-11-11
, 11:44
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Posts: 203 |
Thanked: 68 times |
Joined on Oct 2009
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#12
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Originally Posted by dtrouton
Did you read my second post in this thread, where I explained the difference between operating profit and net profit? (http://talk.maemo.org/showpost.php?p=372159&postcount=7) Apple did in all probability make more money than Nokia last quarter on handsets. When people were saying the figures had to be wrong, it's because they were mistakenly comparing numbers in different units (operating profit, net profit). The claim is neither nonsense, nor hyperbole. People just didn't understand how to read the numbers.
Yes, that is a much better comparison, and really shows the strength of Apple's current postion (without the nonsense hyperbole of Apple making more money than Nokia from phones, it's profit magins are obviously much, much higher).
I do think apple's current (wholly deserved) position is due to being essentially unopposed in that space for a couple of years. If Android and others (Maemo, Bada) can make inroads then it will reduce that figure massively.
I agree that Apple has gotten to where they are, because they have a product with no comparable product going up against it in the market. I think it will be Google/Android though that steps up and outdoes Apple. This is what industry analysts project also. In the next three years Android will surpass the iPhone market share and unfortunately leave Maemo in the dust. http://www.computerworld.com/s/artic...ner_reiterates
Last edited by cb474; 2009-11-11 at 11:52.
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2009-11-11
, 12:12
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Posts: 304 |
Thanked: 233 times |
Joined on Jul 2009
@ São Paulo, SP, Brasil
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#13
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I love this image here, it shows very well the scenario, and has a lot of data. I just don't know what is the period the numbers refer to, and I would love an up-to-date version of it.
Apple is basically earning more because they are selling for a high price something that costs a much lower price. It's the classical magic: buy cheap sell expensive. And they can do it because there are hordes of people interested in acquiring specifically their Apple-branded soft-edged slab.
Now why is this "the right thing to do", and why "Nokia is doing wrong"? Why is having the higher profit margin "all that matters"? Being the one extorting the most money from the richest people on the planet is not all that matters to me, and I hope it is not all that matters for Nokia and any other cell phone manufacturer that doesn't work exclusively with one or two products that "costs the eyes of your face" as we say in Portuguese.
It does seem to be Apple's strategy, not only in the cell phone market, but on everything they do: go for the top-end and put high price tags. It's the path they have chosen. Other people have chosen different paths, and they are not going bankrupt in spite of being the "number one" at stockpiling pictures of Ben Franklin. It's simply different, not "wrong". You can't in fact compare Apples and oranges!...
Apple is basically earning more because they are selling for a high price something that costs a much lower price. It's the classical magic: buy cheap sell expensive. And they can do it because there are hordes of people interested in acquiring specifically their Apple-branded soft-edged slab.
Now why is this "the right thing to do", and why "Nokia is doing wrong"? Why is having the higher profit margin "all that matters"? Being the one extorting the most money from the richest people on the planet is not all that matters to me, and I hope it is not all that matters for Nokia and any other cell phone manufacturer that doesn't work exclusively with one or two products that "costs the eyes of your face" as we say in Portuguese.
It does seem to be Apple's strategy, not only in the cell phone market, but on everything they do: go for the top-end and put high price tags. It's the path they have chosen. Other people have chosen different paths, and they are not going bankrupt in spite of being the "number one" at stockpiling pictures of Ben Franklin. It's simply different, not "wrong". You can't in fact compare Apples and oranges!...
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2009-11-11
, 12:15
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Posts: 31 |
Thanked: 19 times |
Joined on Oct 2009
@ Edinburgh
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#14
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Originally Posted by cb474
I did read it, and it's a good point, but I think they aren't making a fair comparison (if you read my previous post). I can see where they get 1.6 billion US figure for Apple, but the 1.1 billion figure for Nokia doesn't make sense. I can't for the life of me see how they came to that number. It would suggest Apple have a margin of $200 per unit and nokia $10 per unit. I'm sure apple make vastly more per unit, but not *that* much. For this to be true Nokia's operating cost per quarter would have to be ~350 million, which on sales of 10 billion would be pretty remarkable!
Did you read my second post in this thread, where I explained the difference between operating profit and net profit? (http://talk.maemo.org/showpost.php?p=372159&postcount=7) Apple did in all probability make more money than Nokia last quarter on handsets. ]
I suspect the numbers are close, but I can't see how apple would have made almost 1.5 times the profit Nokia did without Nokia Mobile posting a huge overall loss.
At the end of the day, comparing the full businesses, Apple posted a 1.6 billion dollar profit, Nokia a 500 million loss, but with over a billion lost from Nokia-Siemens infroastructure group. Nokia mobile posted a profit of ~850 million US I think. Are iPhone handset sales really more than all Apple's other businesses combined? I just can't see it.
The only fair comparison is the units sold and money made from that. 7.5m units for 4.5 billion for Apple, and 100m units for 10 billion for Nokia. The other figures are pure guesswork. (and I think that figure is impressive enough in Apple's favour).
As for Maemo being left in the dust by android, I think with the information currently available it's a fair guess. Maemo will be only a section of Nokias business, while Android will transition to absorb most handsets from several manufacturers. Nokias business will split between Symbian and Maemo. I think it really does remain to be seen how Android does vs Symbian in developing markets though -- those are really the only two options in that sector.
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2009-11-11
, 12:21
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Posts: 37 |
Thanked: 6 times |
Joined on Oct 2009
@ UK
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#15
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Interesting article - although it's a bit of a shame that the author is under the impression that you need a stylus to navigate the browser, even though there a various videos on the web of people using fingers.
I think it is a mistake to assume the app development will continue to be USA-centric. The fact that desktop software can be ported relatively easily thanks to Linux and QT might well increase development in other countries. This would reduce the disproportionate influence of the US market, and would be an advantage for Nokia.
Also, don't Apple charge a fee for the SDK, which is a barrier to entry for quality free applications that does not exist on the maemo platform. If phone demand is partly dependent on the availability of apps, then Apple may find itself at a disadvantage in the future.
I think it is a mistake to assume the app development will continue to be USA-centric. The fact that desktop software can be ported relatively easily thanks to Linux and QT might well increase development in other countries. This would reduce the disproportionate influence of the US market, and would be an advantage for Nokia.
Also, don't Apple charge a fee for the SDK, which is a barrier to entry for quality free applications that does not exist on the maemo platform. If phone demand is partly dependent on the availability of apps, then Apple may find itself at a disadvantage in the future.
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2009-11-11
, 12:37
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Posts: 329 |
Thanked: 142 times |
Joined on Oct 2009
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#16
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Well it seems to me nokia is doing the right thing: instead of *****izing their devices to compete with apple's "it only does a few things, but it's easy!", they're targeting the opposite market with maemo and the n900: the more advanced users, who want power and freedom over simplicity. So instead of competing for a customer group, they're going for a completely separate one. Remember that someone has to cater for us geeks too 
__________________
I don't mean to crush your hopes, I just can't help it
I don't mean to crush your hopes, I just can't help it
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2009-11-11
, 12:49
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Posts: 203 |
Thanked: 68 times |
Joined on Oct 2009
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#17
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Originally Posted by dtrouton
I see why you're skeptical of Strategy Analytics estimates, but I don't really follow all of your reasoning. I don't see where you get you 350 million operating cost number from. And I don't understand why Nokia would have to post a loss, for Apple to have made 1.5 times the profit. If Apple made 1.5 times as much profit as Nokia, on handsets, then by definition Nokia still made a profit.
I did read it, and it's a good point, but I think they aren't making a fair comparison (if you read my previous post). I can see where they get 1.6 billion US figure for Apple, but the 1.1 billion figure for Nokia doesn't make sense. I can't for the life of me see how they came to that number. It would suggest Apple have a margin of $200 per unit and nokia $10 per unit. I'm sure apple make vastly more per unit, but not *that* much. For this to be true Nokia's operating cost per quarter would have to be ~350 million, which on sales of 10 billion would be pretty remarkable!
I suspect the numbers are close, but I can't see how apple would have made almost 1.5 times the profit Nokia did without Nokia Mobile posting a huge overall loss.
At the end of the day, comparing the full businesses, Apple posted a 1.6 billion dollar profit, Nokia a 500 million loss, but with over a billion lost from Nokia-Siemens infroastructure group. Nokia mobile posted a profit of ~850 million US I think. Are iPhone handset sales really more than all Apple's other businesses combined? I just can't see it.
The only fair comparison is the units sold and money made from that. 7.5m units for 4.5 billion for Apple, and 100m units for 10 billion for Nokia. The other figures are pure guesswork. (and I think that figure is impressive enough in Apple's favour).
In any case, it seems believable to me that Nokia has a $10 profit margin on it's phones. They are mostly selling massive amounts of extremely cheap devices in countries were people have pretty low incomes (compared to the U.S. and Europe) and to lower income markets in the U.S. and Europe. Again, if you take into account that 10% of the income earners have 80% of the wealth and those people are mostly concentrated in the U.S. and Europe, then the profit margins on phones both in other parts of the world and in the lower income sectors of the U.S. and Europe would have to be orders of magnitude smaller.
It would be interesting to see Strategy Analytics calculations and what assumptions they really made to arrive at their conclusion. But I don't really buy that what they're doing is pure guess work, as you say. The reason companies like this put out estimates like this is for the industry, so other related business can make decisons based on what's going on in the market. A business like that, which has been around for decades, wouldn't continue to exist if they just made up their numbers. So I still think if there was something so grossly wrong with their numbers, they wouldn't have put them out there. What, after all, is their interest in artifically painting a rosey picture for Apple? They're an independent company. And I also think the news reporting agencies, like Reuters, who carried the story could have put two and two together and notice ridiculous errors (it's not like only us people in this forum can notice these things and figure them out). So I'm still willing to buy it and assume that if on the face of it, it's a little hard to add up the numbers, that's because we aren't privy to all the elements of how Strategy Analytics did their calculations.
Last edited by cb474; 2009-11-11 at 13:02.
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2009-11-11
, 13:01
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Posts: 267 |
Thanked: 128 times |
Joined on Sep 2009
@ Somerville MA - USA
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#18
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They may be bundling the itunes / appstore sales into the same number. Apple makes tones of its money on its services. Nokias services are, limited and free. ( you have to pay 100$/yr to have mobile me. )
It is crazy, but like what has been said a few times, Apple is a marketing genius.
It is crazy, but like what has been said a few times, Apple is a marketing genius.
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2009-11-11
, 13:02
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Posts: 1,366 |
Thanked: 1,185 times |
Joined on Jan 2006
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#19
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Apple numbers still dont add up.
Just to be clear we are talking about Apple FY Q4 numbers and therfore it is useful to look at full year numbers for Apple
They did total revenues of $36.27B of which 6.7B was iPhone and iPhone related (assume includes app store sales). This represents 18% of total sales.
In FYQ4 they did $9.8B of revenues and an operating income of $2.19B.
Assuming linear relationship with the full year numbers (and yes I know iphone growth was high in FYQ4) then iphone sales for FYQ4 should be closer to $1.76B and Operating income at $394M.
by the way you have to factor in that it was Apples Year end quarter, as well as the cyclical nature of product launches with the 3GS being launched.
Not saying Nokia have not got some work todo, but If I were Strategy Analytics I would be more concerned with Motorola than Noking Nokia if you see what I mean.
Just to be clear we are talking about Apple FY Q4 numbers and therfore it is useful to look at full year numbers for Apple
They did total revenues of $36.27B of which 6.7B was iPhone and iPhone related (assume includes app store sales). This represents 18% of total sales.
In FYQ4 they did $9.8B of revenues and an operating income of $2.19B.
Assuming linear relationship with the full year numbers (and yes I know iphone growth was high in FYQ4) then iphone sales for FYQ4 should be closer to $1.76B and Operating income at $394M.
by the way you have to factor in that it was Apples Year end quarter, as well as the cyclical nature of product launches with the 3GS being launched.
Not saying Nokia have not got some work todo, but If I were Strategy Analytics I would be more concerned with Motorola than Noking Nokia if you see what I mean.
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2009-11-11
, 13:24
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Posts: 41 |
Thanked: 23 times |
Joined on Oct 2009
@ US
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#20
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As a Linux user, I've already resigned myself to a pocket computer landscape dominated by other OSs. The problem that Maemo and other Linux mobile OSs are up against (and no, I do not consider Android a true Linux OS, kernel notwithstanding) is twofold:
1) Telecoms want control over software -- they want to be able to limit features, lock down phones, etc. Both Android and iPhone OS offer that.
2) For the average user, the primary appeal of software is social, not technological. Most people could care less about how hackable or flexible their device/OS is. They just want the apps and features that their friends and coworkers use. This is also true with enterprise computing. Momentum and compatability are everything. Hence, the longstanding dominance of MS Office in the workplace, despite its technological inferiority and expense.
1) Telecoms want control over software -- they want to be able to limit features, lock down phones, etc. Both Android and iPhone OS offer that.
2) For the average user, the primary appeal of software is social, not technological. Most people could care less about how hackable or flexible their device/OS is. They just want the apps and features that their friends and coworkers use. This is also true with enterprise computing. Momentum and compatability are everything. Hence, the longstanding dominance of MS Office in the workplace, despite its technological inferiority and expense.
I do think apple's current (wholly deserved) position is due to being essentially unopposed in that space for a couple of years. If Android and others (Maemo, Bada) can make inroads then it will reduce that figure massively.