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It's easy to cry foul here (and I would be too if it got pulled from the AppStore), but Apple can freely choose the products it stocks in its retail stores. Try

It's easy to cry foul here (and I would be too if it got pulled from the AppStore), but Apple can freely choose the products it stocks in its retail stores. Try suing Target, Walmart, Best Buy, etc, especially over a patent dispute. I assure you they'd likely do the same thing. Also, in a way, Apple is hurting themselves doing this. For each sale of Withings in the store, they make a significant margin on the sale. I don't know the exact number, but I'm sure based on the industry norms for a similar product it's likely in the 25-35% range, if not slightly higher.

sbuttgereit 10y ago
Those wouldn't be rare gross margin percentages based on price/simple cost in much of retail. However, that simple gross margin calculation can be pretty far away from realized gross margin or net profit. Once you're talking around 35%-45% gross margin, you're often times simply talking about potential: GM = (Retail Price - Vendor Cost)/Retail Price. That gives you the potential margin, but excludes actual performance including things not directly related to item performance (general administrative costs, losses due to shrink, returns, landed costs, etc.) So the realized margin at the end of a reporting period narrows from that gross margin approximation quite a lot sometimes. I once ran an IT group for a start-up retail chain where we manufactured a number of the more popular product lines in our assortment. We were running up to 98% simple GM on products on the retail side in those lines and still ended up going out of business after a few years. The simple GM number was great, but the realized gross margin was maybe 50% so all of those other costs more than made up for it. And in the end, those products weren't the ones product management needed to be the most popular (they were pretty low dollar value). A more interesting number on these lines would be GMROI (Gross Margin Return On Investment) along with Apple's typical GMROI numbers. The reason this value is more interesting is that gross margin doesn't really tell you how important a product is to your business. For example if I sell a single item at 98% margin over the course of a year, that's great GM, but the item I sell 10000 times over the same period with a GM of 25% is probably more important to my business (just one example of how GM might be misleading in this regard, there are other factors, too). To get this value you basically do GMROI = ((Item Revenue - Item Costs)/Item Revenue)/Average Inventory Cost (for quarter, year, etc). That's how you'd know if Apple were really hurting themselves moreso than not by not carrying this product line. [edited for clarity of point]
- jsjohnst 10y ago
  I should've clarified, yes, I specifically meant gross margin. I agree the other numbers are much more interesting, but sadly nobody outside Apple will exactly know them most likely. I only know the range for gross margin as I'm familiar with the gross margins on several items sold in the store in a similarish category.
neves 10y ago
This isn't a fair comparison. Apple has a monopoly in the store of iOS devices. In Android you can authorize different stores, in Apple walled garden, you can't. It is hard of find an equivalent metaphor in the real world. Maybe if you decided to live in the USA, them the government forbids you to buy something you like because they are in a commercial dispute with another country. Would you move just because of this? It won't take long to get to the moment when Apple have more influence in your life than the government of the country you live. And you won't be able to vote them out.
- hutattedonmyarm 10y ago
  > Apple hasn’t pulled the Withings apps from the App Store yet They took the hardware off their store, not the App from the App Store. So this has nothing to do with being able (or not) to get your apps from different stores
- xoa 10y ago
  >This isn't a fair comparison. Apple has a monopoly in the store of iOS devices. In Android you can authorize different stores, in Apple walled garden, you can't. I think you've gotten confused here (or didn't read the article): this is not software we're talking about, this is hardware. The physical hardware products have been pulled from the Apple Store, both online and retail, not the supporting software apps in the App Store. And Apple has no monopoly whatsoever on retail or online equivalents, Withings are still readily available at a variety of outlets and of course on all the online ones, Amazon etc. So as long as it stays like that there is no issue at all. Particularly for Apple retail stock space is extremely valuable and precious and it's perfectly reasonable (and in fact necessary) for them to pick and choose what to stock for a variety of reasons. On the other hand if at some point they extended that to the App Store as well or took any other actions whatsoever to use their artificial iOS platform technical control as a club (such as trying to make Withings devices cease to function with iOS devices) then yes, that would be really bad. Not sure whether it'd be illegal or not but it should be (although I think it should be legally required to hardware owners to be offered a root key on their devices too, but that's another discussion). At least for now though hardware stocking decisions alone are not a cause for concern.

sbuttgereit 10y ago

Those wouldn't be rare gross margin percentages based on price/simple cost in much of retail. However, that simple gross margin calculation can be pretty far away from realized gross margin or net profit. Once you're talking around 35%-45% gross margin, you're often times simply talking about potential: GM = (Retail Price - Vendor Cost)/Retail Price. That gives you the potential margin, but excludes actual performance including things not directly related to item performance (general administrative costs, losses due to shrink, returns, landed costs, etc.) So the realized margin at the end of a reporting period narrows from that gross margin approximation quite a lot sometimes. I once ran an IT group for a start-up retail chain where we manufactured a number of the more popular product lines in our assortment. We were running up to 98% simple GM on products on the retail side in those lines and still ended up going out of business after a few years. The simple GM number was great, but the realized gross margin was maybe 50% so all of those other costs more than made up for it. And in the end, those products weren't the ones product management needed to be the most popular (they were pretty low dollar value). A more interesting number on these lines would be GMROI (Gross Margin Return On Investment) along with Apple's typical GMROI numbers. The reason this value is more interesting is that gross margin doesn't really tell you how important a product is to your business. For example if I sell a single item at 98% margin over the course of a year, that's great GM, but the item I sell 10000 times over the same period with a GM of 25% is probably more important to my business (just one example of how GM might be misleading in this regard, there are other factors, too). To get this value you basically do GMROI = ((Item Revenue - Item Costs)/Item Revenue)/Average Inventory Cost (for quarter, year, etc). That's how you'd know if Apple were really hurting themselves moreso than not by not carrying this product line. [edited for clarity of point]

jsjohnst 10y ago
I should've clarified, yes, I specifically meant gross margin. I agree the other numbers are much more interesting, but sadly nobody outside Apple will exactly know them most likely. I only know the range for gross margin as I'm familiar with the gross margins on several items sold in the store in a similarish category.

neves 10y ago

This isn't a fair comparison. Apple has a monopoly in the store of iOS devices. In Android you can authorize different stores, in Apple walled garden, you can't. It is hard of find an equivalent metaphor in the real world. Maybe if you decided to live in the USA, them the government forbids you to buy something you like because they are in a commercial dispute with another country. Would you move just because of this? It won't take long to get to the moment when Apple have more influence in your life than the government of the country you live. And you won't be able to vote them out.

hutattedonmyarm 10y ago
> Apple hasn’t pulled the Withings apps from the App Store yet They took the hardware off their store, not the App from the App Store. So this has nothing to do with being able (or not) to get your apps from different stores
xoa 10y ago
>This isn't a fair comparison. Apple has a monopoly in the store of iOS devices. In Android you can authorize different stores, in Apple walled garden, you can't. I think you've gotten confused here (or didn't read the article): this is not software we're talking about, this is hardware. The physical hardware products have been pulled from the Apple Store, both online and retail, not the supporting software apps in the App Store. And Apple has no monopoly whatsoever on retail or online equivalents, Withings are still readily available at a variety of outlets and of course on all the online ones, Amazon etc. So as long as it stays like that there is no issue at all. Particularly for Apple retail stock space is extremely valuable and precious and it's perfectly reasonable (and in fact necessary) for them to pick and choose what to stock for a variety of reasons. On the other hand if at some point they extended that to the App Store as well or took any other actions whatsoever to use their artificial iOS platform technical control as a club (such as trying to make Withings devices cease to function with iOS devices) then yes, that would be really bad. Not sure whether it'd be illegal or not but it should be (although I think it should be legally required to hardware owners to be offered a root key on their devices too, but that's another discussion). At least for now though hardware stocking decisions alone are not a cause for concern.