6 ms·

Do you think there is a fixed "profit" out there for the taking? Apple's profit margin is an extreme aberration, and it isn't sustainable. Any comparison that

by ergo98 16y ago

Do you think there is a fixed "profit" out there for the taking? Apple's profit margin is an extreme aberration, and it isn't sustainable. Any comparison that relies upon profit numbers is...disturbed.

kenjackson 16y ago
Do you think there is a fixed "profit" out there for the taking? Definitely not. But I do think that there's been incredible growth in Nokia's core business, and they haven't seen any of the growth. Apple has been able to do this in four markets now: 1) iPhone -- a carrier subsisized market. 2) iPad -- see (3) 3) iPod -- Large margins based on industry leading large volume. 4) Computers -- Expensive niche product with huge margins. I believe the are the single most profitable computer company (if you look just at their computer division). Why is a comparison based on profit disturbed? In business that's pretty much the only thing that matters. Profit yesterday, today, and tomorrow.
chc 16y ago
Apple has been making similar margins on all of its products for the past 10 years. How can you say it isn't sustainable?
- ergo98 16y ago
  10 years ago Apple had 5 billion in revenue. Now they're pushing 100 billion in revenue. They butting in on competitors who operate in the 5% margin range, and who are all desperately starting to claw back at Apple's gains. No, it isn't sustainable. History will prove me out, and in 3 years I would bet that Apple has seen a significant margin haircut. Quote me on a 50% decline. As a comparison, by the way, look at Sony (which was the Apple before Apple). Once a purveyor of high margin audio equipment, they saturated that market and started moving to high markup mobile audio equipment...and then TVs...and then lower markup mobile equipment, etc, and then everyone started fighting back. Apple is exactly following the Sony curve. EDIT: Arrowed down. This is one of those seminal moments that speak volumes about a community, and I think HN is done (just furthering an observation that has grown). Account and site abandoned.
  - evgen 16y ago
    EDIT: Arrowed down. This is one of those seminal moments that speak volumes about a community, and I think HN is done (just furthering an observation that has grown). Account and site abandoned. I would say please don't let the door hit you in this ass on your way out, but you are a bog-standard troll and will be back again next week whining about Apple.
    - gsk 16y ago
      that was not necessary.
  - kenjackson 16y ago
    Apple and Sony do share some similarities, but at least one big difference exists... Sony focused on licensing technology, from CD to BetaMax. Whereas Apple is creating a walled garden to lock in customers. Sony eventually got commodotized in the very technology they created. This won't happen with Apple. At worst they get undercut in their industry, but Apple has a rich ecosystem that has to stay with Apple to reap the benefits. And just for the record, no downvotes from me.
    - gaius 16y ago
      No, Sony tried to lock-in as well, e.g. Memory Stick, Minidisc, etc. Sony anything worked better with Sony anything-else. You saw this in the marketing too, SonyStyle etc, you could buy every electronic device from them and they'd all integrate nicely. Exactly like Mac, iPod/Pad, iTunes, AirPort, AirTunes, AppleTV...
  - pohl 16y ago
    It's a very easy bet that their profit margin is not sustainable. Obviously it won't survive the heat-death of the universe, nor the sun's expansion into a red giant. The most contentious statement you made, to me, is "any comparison that relies upon profit numbers is...disturbed." Why is profit a disturbing business metric?
  - brisance 16y ago
tesseract 16y ago
> Apple's profit margin is an extreme aberration, and it isn't sustainable. Any comparison that relies upon profit numbers is...disturbed. So the goal of a phone maker should be to sell as many devices as possible regardless of whether they're profitable? That sounds a lot like, say, Motorola before they adopted Android - not exactly a picture of a healthy business.

by ergo98 16y ago

kenjackson 16y ago

Do you think there is a fixed "profit" out there for the taking? Definitely not. But I do think that there's been incredible growth in Nokia's core business, and they haven't seen any of the growth. Apple has been able to do this in four markets now: 1) iPhone -- a carrier subsisized market. 2) iPad -- see (3) 3) iPod -- Large margins based on industry leading large volume. 4) Computers -- Expensive niche product with huge margins. I believe the are the single most profitable computer company (if you look just at their computer division). Why is a comparison based on profit disturbed? In business that's pretty much the only thing that matters. Profit yesterday, today, and tomorrow.

chc 16y ago

Apple has been making similar margins on all of its products for the past 10 years. How can you say it isn't sustainable?

ergo98 16y ago
10 years ago Apple had 5 billion in revenue. Now they're pushing 100 billion in revenue. They butting in on competitors who operate in the 5% margin range, and who are all desperately starting to claw back at Apple's gains. No, it isn't sustainable. History will prove me out, and in 3 years I would bet that Apple has seen a significant margin haircut. Quote me on a 50% decline. As a comparison, by the way, look at Sony (which was the Apple before Apple). Once a purveyor of high margin audio equipment, they saturated that market and started moving to high markup mobile audio equipment...and then TVs...and then lower markup mobile equipment, etc, and then everyone started fighting back. Apple is exactly following the Sony curve. EDIT: Arrowed down. This is one of those seminal moments that speak volumes about a community, and I think HN is done (just furthering an observation that has grown). Account and site abandoned.
- evgen 16y ago
  EDIT: Arrowed down. This is one of those seminal moments that speak volumes about a community, and I think HN is done (just furthering an observation that has grown). Account and site abandoned. I would say please don't let the door hit you in this ass on your way out, but you are a bog-standard troll and will be back again next week whining about Apple.
  - gsk 16y ago
    that was not necessary.
- kenjackson 16y ago
  Apple and Sony do share some similarities, but at least one big difference exists... Sony focused on licensing technology, from CD to BetaMax. Whereas Apple is creating a walled garden to lock in customers. Sony eventually got commodotized in the very technology they created. This won't happen with Apple. At worst they get undercut in their industry, but Apple has a rich ecosystem that has to stay with Apple to reap the benefits. And just for the record, no downvotes from me.
  - gaius 16y ago
    No, Sony tried to lock-in as well, e.g. Memory Stick, Minidisc, etc. Sony anything worked better with Sony anything-else. You saw this in the marketing too, SonyStyle etc, you could buy every electronic device from them and they'd all integrate nicely. Exactly like Mac, iPod/Pad, iTunes, AirPort, AirTunes, AppleTV...
- pohl 16y ago
  It's a very easy bet that their profit margin is not sustainable. Obviously it won't survive the heat-death of the universe, nor the sun's expansion into a red giant. The most contentious statement you made, to me, is "any comparison that relies upon profit numbers is...disturbed." Why is profit a disturbing business metric?
- brisance 16y ago

tesseract 16y ago

> Apple's profit margin is an extreme aberration, and it isn't sustainable. Any comparison that relies upon profit numbers is...disturbed. So the goal of a phone maker should be to sell as many devices as possible regardless of whether they're profitable? That sounds a lot like, say, Motorola before they adopted Android - not exactly a picture of a healthy business.