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...with only a 13% share of units. That is, all other vendors together sold 87% of units, but earned only a combined 25% of industry-wide profit. The vast maj

by cs702 5y ago

...with only a 13% share of units. That is, all other vendors together sold 87% of units, but earned only a combined 25% of industry-wide profit. The vast majority of those other vendors are companies headquartered in Asian countries with a long history of promoting market share, access to information, and knowledge transfer at the expense of short-term profit. They might be making less money willingly to grow/maintain volume, grow/maintain access to a large volume of user data, and acquire/maintain expertise.

NineStarPoint 5y ago
I expect it’s more about the competition than those companies willingly leaving that level of profit on the table. In the android market, people have the option of switching to a competitor if you’re not price competitive yourself. For IOS, apple is the only game in town on hardware.
- cs702 5y ago
  Maybe. I'm not so sure. In theory, a company like, say, Samsung could stop making cheaper, money-losing phones and invest primarily on making increasingly better, premium, profitable phones like the Galaxy Fold, but they choose not to do that, year after year.
  - chii 5y ago
    > focus primarily on making premium, profitable phones like the Galaxy Fold believe it or not, apple's supply chain and verticals and operations are much more efficient than samsungs'. Tim cook did wonders during steve job's era to scale out their operations. So much so that samsung cannot really compete at the same quality.
  - cies 5y ago
    What differentiates those premium phones? It runs the same Android of which I rather have a stock version than the bloat-ware rubbish that phone makers install on there for me. The iOS devices link into a web of ease-of-use, and come with a reasonably well make stock version of iOS. And then there's trust. Whom does an average user trust more with their data? (Apple/USgov, or Google/USgov+Samsung/SouthKorea+...)
    - oblio 5y ago
      Believe it or not, but "stock Android" has been tried about 10 times. It failed. Only techies care. Regular users want a ton of features. Edit: Sales numbers tell you all you need to know about "stock Android" success :-)
      - AnthonyMouse 5y ago
        Regular users don't actually know anything about the difference. They look at how many megapixels the camera has and the resolution of the screen and things like that, because they're numbers you can compare. Regular users don't know what "stock Android" is. And then they come home with a phone full of bloatware and complain about it after. Nobody actually buys the phone for the bloatware. These companies are wasting their money developing it. They just want the phone with the better camera. The real problem is that techies can't improve Android because the hardware vendors are shipping custom kernels and their hardware can't use the stock kernel. So Android is "open source" but there is no ecosystem of people scratching that itch with the improvements flowing to the ordinary users because it's so hard to modify what came with your device. Especially when many of the techies still care about the better screen and camera. Think about it this way. There is no reason every Android phone on the market shouldn't come with the option of stock Android. Even if you think the majority of "regular users" wouldn't want it, the availability of it would get them a few sales from techies, right? And then we would really find out what people want, because they get the choice without it being tied to the rest of the hardware.
        oblio 5y ago
        > There is no reason every Android phone on the market shouldn't come with the option of stock Android. Umm...there is a very solid reason: support costs. Nobody wants to double the support matrix.
        AnthonyMouse 5y ago
        The vendor's Android is going to be 99% stock Android and 1% things that will have higher rather than lower support costs than stock Android because it will have a smaller user base and be less likely to have the bugs already discovered and patched. Support costs would, if anything, go down.
  - tbrock 5y ago
    If they did they would be dead in a year. They sell a fraction of the >$1000 phones apple sells by the shipload. Their bread and butter is the cheap stuff. The same way nobody wants to spent $35k on a honda when they could have a tesla.
    - neogodless 5y ago
      Looks like Honda Accord is approaching $32k on average[0]. 200k Honda Accords sold in the U.S. 2020[1]. 450k Tesla Model 3 + Y sold globally[2]. Though Model 3 and Y average price closer to $49k and $65k respectively[3]. If I have a point, it's that if you have $35k to spend, you're probably getting a high trim level Honda Accord. Because you need another $15k to get an "average" Tesla Model 3. (Obviously the Model 3 is worth spending $50k for lots and lots of buyers!) [0] https://www.cargurus.com/Cars/price-trends/Honda-Accord-d585 https://www.cargurus.com/Cars/price-trends/Honda-Accord-d585 [1] https://www.best-selling-cars.com/usa/2020-full-year-usa-honda-and-acura-sales-by-model/ https://www.best-selling-cars.com/usa/2020-full-year-usa-hon... [2] https://www.best-selling-cars.com/brands/2020-full-year-global-tesla-car-sales-worldwide/ https://www.best-selling-cars.com/brands/2020-full-year-glob... [3] https://www.cargurus.com/Cars/price-trends/Tesla-m112 https://www.cargurus.com/Cars/price-trends/Tesla-m112
      - tbrock 5y ago
        The Y is a much more expensive car with a discontinued standard range version and the base model 3 is by far and away the best selling version of the vehicle. Averages can be misleading. Id like to see the median prices given that the base tesla model 3 is VERY premium vs the base model accord which is not.
        lotsofpulp 5y ago
        If I was looking to minimize cost per mile, I would get an Accord, not a Tesla. Hondas and Toyotas are tried and true with a few decades of reputation built up. And routine maintenance on those does not cost much.
    - FpUser 5y ago
  - dhritzkiv 5y ago
    Do people want the Fold? (No snark - genuinely asking)
    - gumby 5y ago
      I saw one in the flesh (a friend had one) and it was surprisingly good, I expected the screen to be crap but it was not. You could legitimately get a big screen on a device that fit in your pocket. It also has a screen on the “outside” so you can use it without opening it — as a convenience or to reduce the number of flexes of the screen? The thing is, android tablets suck (I know, and it appears the market does too) so the experience of the larger screen is meh. I’m happy with a small phone when walking around and an iPad (or hell just a laptop) when I’m at home.
    - fomine3 5y ago
      Folding tech/gimmick itself isn't what people want (I believe). It makes possible tablet can be folded so fit on my pocket. There's no switching cost from smartphone to tablet. It changes my digital life. I no longer use narrower smartphone to read web/books in everywhere. Personally I don't know how Flip3 useful, but it seems to sold well, maybe cool for some people.
      - skinnymuch 5y ago
        You’re saying a foldable tablet fitting in your pocket would be good for you? Then why call folding a gimmick at the beginning? The iPhone was called a gimmick when it was new. Same with the iPad, less so but still with the Apple Watch.
        fomine3 5y ago
        I'm not a native so maybe used wrong word. Flexible OLED was also used for smartphone like LG G Flex, Galaxy Note Edge/S6 edge and its successor, but those aren't welcomed well. Samsung widely used the edge "gimmick" but it's not welcomed by majority from what I see because it shows curved content, makes accidental touch, and makes (a bit) hard to put screen protector. Finally they advanced to foldable OLED and developed game changing Galaxy Fold. Fold3 is really good but I think final product is important than the tech itself. But maybe, without Galaxy Edge phones, Fold won't be developed.
  - ChrisLomont 5y ago
    >they choose not to do that, year after year Because they could not simply take the profit that Apple is making. Surely they're not dumb enough to throw out profit for giggles. Android phones face lots of competition from Android phones.
  - toast0 5y ago
    Having a spectrum of phones helps sell the premium phones. If you decide to buy a premium phone to replace your current phone, and you're happy with the one you have, you may shop the same brand. Without the lower end phones, you won't get those customers. Windows Mobile 10 was a trainwreck for a lot of reasons, but Microsoft only sold upper mid tier and premium phones for it, and the sales numbers were terrible. If they had commited to low end phones (which they did well for WP7 and WP8), it might have gone differently. (Of course, that would have required a much more polished OS release)
    - fomine3 5y ago
      IIRC cheap Lumia was also sold packed in blister pack, but still not succeeded.
Osiris 5y ago
Nearly all hand set manufactures outside if apple only make money on the device sale not on any app revenue. Are the numbers here broken down by hardware vs software profits? If not, it would seem obvious to me that Apple makes more because they can include all App Store profits after each device sale.
- robocat 5y ago
  About 50% of Apple’s profits are from the App Store by my calculations[1], although Apple makes it hard to split out App Store profits versus handset profits[2]. [1] https://news.ycombinator.com/item?id=28638939 https://news.ycombinator.com/item?id=28638939 [2] https://www.marketwatch.com/story/how-profitable-is-apples-app-store-even-a-landmark-antitrust-trial-couldnt-tell-us-11622224506 https://www.marketwatch.com/story/how-profitable-is-apples-a...
  - snowwrestler 5y ago
    I think the math in your linked post is wrong; it looks like you’re confusing App Store revenue and Apple revenue. App Store revenue is the gross sales of the App Store. Apple takes at most 30% of that as their revenue; the rest goes to the app developers. So to calculate Apple’s profit margin for the App Store, you would compare only that Apple revenue to Apple’s actual costs of running the App Store. So their App Store profits are not 78% of $64 billion. They are 78% of at most 30% of $64 billion. So no more than $15 billion, not $50 billion.
    - robocat 5y ago
      Thank you - I think you are correct; ~15% profits from the App Store seems much more reasonable (50% seemed wrong but no one corrected me…!) Note, I think this was the source for the gross profit figure I quoted: https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-sales-around-64-billion-in-2020.html https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-s...
ASalazarMX 5y ago
Apple certainly was the winner of Huawei being pushed out of the USA market. Now they can continue slowly issuing premium features their competition had years ago, like the macro lens in the new iPhone 13. IMO, if Huawei had remained, high-end hardware would have entered a race to the bottom, and Apple would have been the biggest loser, we can't have that.
- HatchedLake721 5y ago
  Sorry but your comment made me laugh. Apple (a company that never publishes or leads with their tech specs) would be the biggest loser if Huawei stayed in the market. That Huawei that never reached 2% (or even 1%) mobile marketshare in the US
  - smoldesu 5y ago
    Apple has never reached double digits in term of desktop market share, but that hasn't stopped them from releasing a new Macbook every year.
    - tpush 5y ago
      Apple's desktop market share is actually 15% world wide [0] and 27% in the US [1]. [0] https://gs.statcounter.com/os-market-share/desktop/worldwide https://gs.statcounter.com/os-market-share/desktop/worldwide [1] https://gs.statcounter.com/os-market-share/desktop/united-states-of-america https://gs.statcounter.com/os-market-share/desktop/united-st...
    - pjmlp 5y ago
      Actually if it wasn't for Microsoft they wouldn't be shipping those phones and MacBooks now.
      - HatchedLake721 5y ago
        Why?
DevKoala 5y ago
> They might be making less money willingly to grow/maintain volume, grow/maintain access to a large volume of user data, and acquire/maintain expertise. “We got them were we want them champ, let’s finish them in last round”
judge2020 5y ago
This also likely doesn't account for post-sale profit, ie. other manufacturers might have spyware/"sponsored content" baked into the OS to recoup some margin.
- reayn 5y ago
  Can confirm this is how a lot of the Xiamo Co.'s cheaper phones (brands like Poco/Vivo i think?) are able to sell hardware that competes way above its weight at such unbelievable low prices.
- creshal 5y ago
  I'm willing to bet that all of these combined don't even come within an order of magnitude to the iOS app store.
- regem_eupraxia 5y ago
  This is seems in the right ballpark. Vertical integration means not only that Apple has sufficient control to make a “luxury” product (I use quotes bc the iPhone doesn’t really fit into the “luxury” category as it’s conventionally understood), but that it can build a value proposition around the notion that customers who buy into the apple ecosystem know their data isn’t going anywhere else. This sort of concern seems to be getting more media traction now. I did a spell working on homicide investigations in the US, and I was consistently amazed by the gulf of difficulty between obtaining legally solicited data from Apple vs. any other company. Most companies drag their feet with subpoenas and search warrants to some degree, but most will just accept it and eventually send what you’ve requested. Apple wouldn’t give you shit unless you had it signed by a judge in your state, a judge in Cupertino, and the prosecutors office in Cupertino. You then had to serve the subpoena/SW in-person at their Cupertino HQ. Say what you want about Apple, but there’s no question that they go above and beyond their competitors when it comes to their users’ privacy. The spat playing out in the news between Cook and Zuck might seem like posturing on both sides, but I think Apple’s argument is genuine. They believe that people should be able to pay more for more control over their data. Facebook believe that the harvesting data is necessary to keep the internet cheap or free to maintain low access barriers. Both are valid points. But it seems to me that the more aware you are of what Google and FB do with your data, the more willing you will be to shell out for devices and services which not only promise not to give your info to every Tom, Dick, and Harry but also have NO INCENTIVE to do so. The median consumer isn’t dumb: they know there’s no such thing as a free lunch. The bulk of the price difference between Android and Apple phones isn’t down to operational efficiencies or technology, it’s down to the vastly different business models. With Apple devices, you know how the sausage is made (i.e. your hard earned cash). With Android, you don’t—-but most people figure it out sooner or later. The more tech savvy the consumer becomes, the more they’ll realise what the real “price” of an Android phone is, and the more attractive Apple devices (or any product which doesn’t make consumers pay for stuff in ways they don’t fully control, consent to, or understand) become. Of course, one could argue that emphasis on privacy differs from culture to culture, but the data privacy piece also bears on rapidly changing understandings of healthy tech use. In lots of places, people just don’t care as much about privacy as the average American does. London is one of the most heavily surveilled cities in the world, and the vast majority of Londoners couldn’t care less. But consumers are increasingly learning how technology can not only add but detract from their lives. There was that Netflix doc (which I didn’t see) about why social media is addictive and makes a bunch of people unhappy etc., then there’s this latest report about how FB is bad for lots of people, but there’s a larger trend there and it is catching up with those areas within the tech industry. To varying degrees of obviousness, Apple exudes alignment with what its customers actually want for themselves. Apple compiles data on your phone usage; if you want to use your phone less, Apple helps you do that by letting you put time limits on your usage of whatever apps you want to use less. The power of these subtle features at ensconcing product loyalty is often overlooked. Your average punter’s market macro analysis tends to view consumers as crude neoclassical utility functions, but I don’t think it’s unreasonable to assume that consumers notice thiede little tells on some level or another. We’ve evolved to be able to judge whether someone can be trusted based on their actions. Phones aren’t people, but they are a proxy for a corporate entity which everyone understands is a consortium of people who want to make money. These are devices we have increasingly intimate relationships with. These devices are demonstrating increasing levels of sentience and intersubjectivity. I know this sounds far-fetched at first, but it makes sense when we consider that the shift to AI is not a 0-to-perfect AGI but rather a gradual shift in which machines will steadily accumulate feature of sentience. The main change, though, is consumer knowledge. When we learn about how our digital overlords make their trillion dollar sausages, we can say: ok, Apply IS charging me an arm and a leg for this stuff, but at least everything is above the table, and at least they’re looking after me once I buy into their ecosystem. A new android customer now is more likely to know that Android is owned by Google; they are more likely to know how Google makes money, and they may be more aware of the deleterious daily grind of being bombarded with highly targeted marketing designed to make you pay the difference (as the person I’m replying to mentioned). If you can afford it, if you value your time and attention, and if your recognise how the forces on online marketing can influence your behaviour in ways you don’t want it to, you may well decide that you’d rather pay an extra few hundred bucks for the Apple product. Indeed, the Americans here need no reminder of how much economic self-interest people may be willing to sacrifice for a greater measure of perceived transparency and probity.
justicezyx 5y ago
> Asian countries with a long history of promoting market share, access to information, and knowledge transfer at the expense of short-term profit. Apple doesn't transfer anything right?
beckman466 5y ago
> ...with only a 13% share of units. > Asian countries with a long history of promoting market share, access to information, and knowledge transfer at the expense of short-term profit. Apple is the king of parasitic technological and scientific knowledge rentierism and obfuscation, as well as king in exploitation. it's neo-imperialism at it's most 'refined'. profits are surplus value extracted from workers, including the intellectual property extracted by knowledge workers [1], [2]. monopolistic 'vertical integration' means zero interoperability and maximum alienation (through the division of labor, and the creation of systematic knowledge hierarchies): 'designed in California, made in China' is supposed to modestly signal American intellectual 'talent', yet which instead just shows the insane level of manufactured consent achieved by SV and the US in their science and tech monopolization [3]. don't think it's so bad? Vijay Prashad: "iPhone workers today are 25 times more exploited than textile workers in 19th Century England" [4] [1] https://tribunemag.co.uk/2019/01/abolish-silicon-valley https://tribunemag.co.uk/2019/01/abolish-silicon-valley [2] https://venturecommune.substack.com/p/go-where-workers-are-and-organize https://venturecommune.substack.com/p/go-where-workers-are-a... [3] Marianna Mazzucato, https://web.archive.org/web/20160204223931/https://nybooks.com/articles/2014/04/24/innovation-government-was-crucial-after-all/ https://web.archive.org/web/20160204223931/https://nybooks.c... + https://marianamazzucato.com/books/the-entrepreneurial-state https://marianamazzucato.com/books/the-entrepreneurial-state [4] https://mronline.org/2019/09/29/iphone-workers-today-are-25-times-more-exploited-than-textile-workers-in-19th-century-england/ https://mronline.org/2019/09/29/iphone-workers-today-are-25-...
- tomjen3 5y ago
  >don't think it's so bad? Vijay Prashad: "iPhone workers today are 25 times more exploited than textile workers in 19th Century England" [4] One thing I love about studying history is that you can dismiss claims like that immediately.
  - sudosysgen 5y ago
    But if you did you couldn't. The ratio of wages to profit made on the item is way higher for iPhones. The quote is literally true. Textile mills in 19th century England operated with comparatively pedestrian profit margins and factory wages were a much higher proportion of expenses. It's estimated that the assembly costs of an iPhone are in the 20-50 dollar range, the profit margin is in the 300+ dollar range, clearly the ratio is much higher than in any textile mill.
clairity 5y ago
it’s been like this for a long time (in fact, they used to have ~90% of profits on ~10% of share), which is why apple has the market cap it does. apple has a differentiation strategy, which explicitly goes after fatter profits rather than volume. the handset market is so large however, that apple can still have plenty of volume (100 million units/year) to drive down cost with economies of scale.
- ksec 5y ago
  >it’s been like this for a long time Yes. It has been like that since the day iPhone was launched. Arguably the whole (modern) Smartphone Market history. So I am kinda surprised to see some of the reaction here. And it was easy in the old days when iPhone was in Financial Segment with ASP and unit volume. Now it is hard to judge without those Data. And no where on the site do they mention how they calculated the profits. Also worth mentioning Apple used to make 95%+ if not more than 100% profits because other vendors were losing money.
  - panda88888 5y ago
    Yes, I remember back then there was an article about Apple making more than 100% of the profits in the smartphone market, because most of other competitors are losing money trying to increase market share. Edit: here it is https://www.forbes.com/sites/parmyolson/2016/11/04/apple-grabs-more-than-100-of-smartphone-profits/amp/ https://www.forbes.com/sites/parmyolson/2016/11/04/apple-gra...
  - syshum 5y ago
    >>So I am kinda surprised to see some of the reaction here. Because people are starting to wake up to the idea that simply defining the market as "Mobile Handsets" for Anti-Trust purposes is flawed. The only way a company can achieve this level of profitability is by excluding competition from their market, The idea that apple "Competes" with other Handset manufacturers is clearly flawed, as these statics show. Apple is a monopoly and should be treated as such, to the point they should be required to open up their ecosystem to competition
ewzimm 5y ago
I wonder if that 13% of units might actually account for 75% of mobile computing power. Apple’s budget iPhone SE has over 41% higher single core performance than Samsung’s flagship Galaxy S21. And the vast majority of Android sales worldwide are not flagship devices.
wayneftw 5y ago
In the US their unit share is now greater than 50%. It's too bad that they're taking all of our money and not exporting much. And for a country that loves "freedom" so much, it's also too bad that we don't make Apple sell us devices that we can actually own and control, by simply voting with our dollars.
- fomine3 5y ago
  iPhone is also sold well in Japan. Market share is a bit decreased but still about 40-50%. Take our money!
  - wayneftw 5y ago
    They will take your money and if you keep giving it to them they will continue taking more and more of your freedom too.
    - fomine3 5y ago
      Yes this is more problem than importing phones (anyway actually we import from China mostly). Our freedom is censored by foreign US company because we buy Apple.
bane 5y ago
I was in a discussion the other day how every other attempt at bringing computing to underdeveloped parts of the world has more or less failed (OLPC for example), yet cheap Android phones have managed to become ubiquitous in places without stable electricity, running water, and stable or repressive governments.
- azinman2 5y ago
  Scale is the easiest way to make something cheap, and having a device targeted at every human rather than just school kids is going to be the best way to achieve scale. But as far as education goes, phones aren’t as good as a laptop as far as form factor. But better than nothing I suppose!
  - b9a2cab5 5y ago
    More likely is that cell phones all have mobile data, whereas laptops have not historically had that except on high end business models. Devices are pretty useless to the average person without the internet, so in places with poor connectivity laptops end up being useless.
    - cbhl 5y ago
      OLPC also suffered from durability issues (repairs required sending the laptop back to the US, IIRC?) and cost issues (they never did hit the $100/unit price point) Even Raspberry Pi leverages the scale of Broadcom chips, which also get used in Android phones
      - na85 5y ago
        OLPC was a really cool idea, but it turned out to be yet another in a long line of "good-idea fairy visits a wealthy first-worlder with yet another way to fix the third world", like What Three Words, etc.
        azinman2 5y ago
SavantIdiot 5y ago
> with a long history of promoting market share, access to information, and knowledge transfer at the expense of short-term profit. Can you back this up? Because last time I checked Hauwei was bent on supplying phones and phone tech for the entire planet.
jollybean 5y ago
Low cost competitors generally only know how do do just that: make things cheaply. That's their competitive advantage, and they leverage it. Apple is a marketing and tech company, and they're good at keeping prices up. Both of them think they are doing better in the long-term. There is no notion of 'sharing' etc. among the low cost competitors, if they could use some kind of IP-rights to hold out their competitors, they would. That said, it should be noted that 'making stuff' is still where the bulk of the money is, even if it's not raw surplus.

by cs702 5y ago

NineStarPoint 5y ago

I expect it’s more about the competition than those companies willingly leaving that level of profit on the table. In the android market, people have the option of switching to a competitor if you’re not price competitive yourself. For IOS, apple is the only game in town on hardware.

cs702 5y ago
Maybe. I'm not so sure. In theory, a company like, say, Samsung could stop making cheaper, money-losing phones and invest primarily on making increasingly better, premium, profitable phones like the Galaxy Fold, but they choose not to do that, year after year.
- chii 5y ago
  > focus primarily on making premium, profitable phones like the Galaxy Fold believe it or not, apple's supply chain and verticals and operations are much more efficient than samsungs'. Tim cook did wonders during steve job's era to scale out their operations. So much so that samsung cannot really compete at the same quality.
- cies 5y ago
  What differentiates those premium phones? It runs the same Android of which I rather have a stock version than the bloat-ware rubbish that phone makers install on there for me. The iOS devices link into a web of ease-of-use, and come with a reasonably well make stock version of iOS. And then there's trust. Whom does an average user trust more with their data? (Apple/USgov, or Google/USgov+Samsung/SouthKorea+...)
  - oblio 5y ago
    Believe it or not, but "stock Android" has been tried about 10 times. It failed. Only techies care. Regular users want a ton of features. Edit: Sales numbers tell you all you need to know about "stock Android" success :-)
    - AnthonyMouse 5y ago
      Regular users don't actually know anything about the difference. They look at how many megapixels the camera has and the resolution of the screen and things like that, because they're numbers you can compare. Regular users don't know what "stock Android" is. And then they come home with a phone full of bloatware and complain about it after. Nobody actually buys the phone for the bloatware. These companies are wasting their money developing it. They just want the phone with the better camera. The real problem is that techies can't improve Android because the hardware vendors are shipping custom kernels and their hardware can't use the stock kernel. So Android is "open source" but there is no ecosystem of people scratching that itch with the improvements flowing to the ordinary users because it's so hard to modify what came with your device. Especially when many of the techies still care about the better screen and camera. Think about it this way. There is no reason every Android phone on the market shouldn't come with the option of stock Android. Even if you think the majority of "regular users" wouldn't want it, the availability of it would get them a few sales from techies, right? And then we would really find out what people want, because they get the choice without it being tied to the rest of the hardware.
      - oblio 5y ago
        > There is no reason every Android phone on the market shouldn't come with the option of stock Android. Umm...there is a very solid reason: support costs. Nobody wants to double the support matrix.
        AnthonyMouse 5y ago
        The vendor's Android is going to be 99% stock Android and 1% things that will have higher rather than lower support costs than stock Android because it will have a smaller user base and be less likely to have the bugs already discovered and patched. Support costs would, if anything, go down.
- tbrock 5y ago
  If they did they would be dead in a year. They sell a fraction of the >$1000 phones apple sells by the shipload. Their bread and butter is the cheap stuff. The same way nobody wants to spent $35k on a honda when they could have a tesla.
  - neogodless 5y ago
    Looks like Honda Accord is approaching $32k on average[0]. 200k Honda Accords sold in the U.S. 2020[1]. 450k Tesla Model 3 + Y sold globally[2]. Though Model 3 and Y average price closer to $49k and $65k respectively[3]. If I have a point, it's that if you have $35k to spend, you're probably getting a high trim level Honda Accord. Because you need another $15k to get an "average" Tesla Model 3. (Obviously the Model 3 is worth spending $50k for lots and lots of buyers!) [0] https://www.cargurus.com/Cars/price-trends/Honda-Accord-d585 https://www.cargurus.com/Cars/price-trends/Honda-Accord-d585 [1] https://www.best-selling-cars.com/usa/2020-full-year-usa-honda-and-acura-sales-by-model/ https://www.best-selling-cars.com/usa/2020-full-year-usa-hon... [2] https://www.best-selling-cars.com/brands/2020-full-year-global-tesla-car-sales-worldwide/ https://www.best-selling-cars.com/brands/2020-full-year-glob... [3] https://www.cargurus.com/Cars/price-trends/Tesla-m112 https://www.cargurus.com/Cars/price-trends/Tesla-m112
    - tbrock 5y ago
      The Y is a much more expensive car with a discontinued standard range version and the base model 3 is by far and away the best selling version of the vehicle. Averages can be misleading. Id like to see the median prices given that the base tesla model 3 is VERY premium vs the base model accord which is not.
      - lotsofpulp 5y ago
        If I was looking to minimize cost per mile, I would get an Accord, not a Tesla. Hondas and Toyotas are tried and true with a few decades of reputation built up. And routine maintenance on those does not cost much.
  - FpUser 5y ago
- dhritzkiv 5y ago
  Do people want the Fold? (No snark - genuinely asking)
  - gumby 5y ago
    I saw one in the flesh (a friend had one) and it was surprisingly good, I expected the screen to be crap but it was not. You could legitimately get a big screen on a device that fit in your pocket. It also has a screen on the “outside” so you can use it without opening it — as a convenience or to reduce the number of flexes of the screen? The thing is, android tablets suck (I know, and it appears the market does too) so the experience of the larger screen is meh. I’m happy with a small phone when walking around and an iPad (or hell just a laptop) when I’m at home.
  - fomine3 5y ago
    Folding tech/gimmick itself isn't what people want (I believe). It makes possible tablet can be folded so fit on my pocket. There's no switching cost from smartphone to tablet. It changes my digital life. I no longer use narrower smartphone to read web/books in everywhere. Personally I don't know how Flip3 useful, but it seems to sold well, maybe cool for some people.
    - skinnymuch 5y ago
      You’re saying a foldable tablet fitting in your pocket would be good for you? Then why call folding a gimmick at the beginning? The iPhone was called a gimmick when it was new. Same with the iPad, less so but still with the Apple Watch.
      - fomine3 5y ago
        I'm not a native so maybe used wrong word. Flexible OLED was also used for smartphone like LG G Flex, Galaxy Note Edge/S6 edge and its successor, but those aren't welcomed well. Samsung widely used the edge "gimmick" but it's not welcomed by majority from what I see because it shows curved content, makes accidental touch, and makes (a bit) hard to put screen protector. Finally they advanced to foldable OLED and developed game changing Galaxy Fold. Fold3 is really good but I think final product is important than the tech itself. But maybe, without Galaxy Edge phones, Fold won't be developed.
- ChrisLomont 5y ago
  >they choose not to do that, year after year Because they could not simply take the profit that Apple is making. Surely they're not dumb enough to throw out profit for giggles. Android phones face lots of competition from Android phones.
- toast0 5y ago
  Having a spectrum of phones helps sell the premium phones. If you decide to buy a premium phone to replace your current phone, and you're happy with the one you have, you may shop the same brand. Without the lower end phones, you won't get those customers. Windows Mobile 10 was a trainwreck for a lot of reasons, but Microsoft only sold upper mid tier and premium phones for it, and the sales numbers were terrible. If they had commited to low end phones (which they did well for WP7 and WP8), it might have gone differently. (Of course, that would have required a much more polished OS release)
  - fomine3 5y ago
    IIRC cheap Lumia was also sold packed in blister pack, but still not succeeded.

Osiris 5y ago

Nearly all hand set manufactures outside if apple only make money on the device sale not on any app revenue. Are the numbers here broken down by hardware vs software profits? If not, it would seem obvious to me that Apple makes more because they can include all App Store profits after each device sale.

robocat 5y ago
About 50% of Apple’s profits are from the App Store by my calculations[1], although Apple makes it hard to split out App Store profits versus handset profits[2]. [1] https://news.ycombinator.com/item?id=28638939 https://news.ycombinator.com/item?id=28638939 [2] https://www.marketwatch.com/story/how-profitable-is-apples-app-store-even-a-landmark-antitrust-trial-couldnt-tell-us-11622224506 https://www.marketwatch.com/story/how-profitable-is-apples-a...
- snowwrestler 5y ago
  I think the math in your linked post is wrong; it looks like you’re confusing App Store revenue and Apple revenue. App Store revenue is the gross sales of the App Store. Apple takes at most 30% of that as their revenue; the rest goes to the app developers. So to calculate Apple’s profit margin for the App Store, you would compare only that Apple revenue to Apple’s actual costs of running the App Store. So their App Store profits are not 78% of $64 billion. They are 78% of at most 30% of $64 billion. So no more than $15 billion, not $50 billion.
  - robocat 5y ago
    Thank you - I think you are correct; ~15% profits from the App Store seems much more reasonable (50% seemed wrong but no one corrected me…!) Note, I think this was the source for the gross profit figure I quoted: https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-sales-around-64-billion-in-2020.html https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-s...

ASalazarMX 5y ago

Apple certainly was the winner of Huawei being pushed out of the USA market. Now they can continue slowly issuing premium features their competition had years ago, like the macro lens in the new iPhone 13. IMO, if Huawei had remained, high-end hardware would have entered a race to the bottom, and Apple would have been the biggest loser, we can't have that.

HatchedLake721 5y ago
Sorry but your comment made me laugh. Apple (a company that never publishes or leads with their tech specs) would be the biggest loser if Huawei stayed in the market. That Huawei that never reached 2% (or even 1%) mobile marketshare in the US
- smoldesu 5y ago
  Apple has never reached double digits in term of desktop market share, but that hasn't stopped them from releasing a new Macbook every year.
  - tpush 5y ago
    Apple's desktop market share is actually 15% world wide [0] and 27% in the US [1]. [0] https://gs.statcounter.com/os-market-share/desktop/worldwide https://gs.statcounter.com/os-market-share/desktop/worldwide [1] https://gs.statcounter.com/os-market-share/desktop/united-states-of-america https://gs.statcounter.com/os-market-share/desktop/united-st...
  - pjmlp 5y ago
    Actually if it wasn't for Microsoft they wouldn't be shipping those phones and MacBooks now.
    - HatchedLake721 5y ago
      Why?

DevKoala 5y ago

> They might be making less money willingly to grow/maintain volume, grow/maintain access to a large volume of user data, and acquire/maintain expertise. “We got them were we want them champ, let’s finish them in last round”

judge2020 5y ago

This also likely doesn't account for post-sale profit, ie. other manufacturers might have spyware/"sponsored content" baked into the OS to recoup some margin.

reayn 5y ago
Can confirm this is how a lot of the Xiamo Co.'s cheaper phones (brands like Poco/Vivo i think?) are able to sell hardware that competes way above its weight at such unbelievable low prices.
creshal 5y ago
I'm willing to bet that all of these combined don't even come within an order of magnitude to the iOS app store.
regem_eupraxia 5y ago
This is seems in the right ballpark. Vertical integration means not only that Apple has sufficient control to make a “luxury” product (I use quotes bc the iPhone doesn’t really fit into the “luxury” category as it’s conventionally understood), but that it can build a value proposition around the notion that customers who buy into the apple ecosystem know their data isn’t going anywhere else. This sort of concern seems to be getting more media traction now. I did a spell working on homicide investigations in the US, and I was consistently amazed by the gulf of difficulty between obtaining legally solicited data from Apple vs. any other company. Most companies drag their feet with subpoenas and search warrants to some degree, but most will just accept it and eventually send what you’ve requested. Apple wouldn’t give you shit unless you had it signed by a judge in your state, a judge in Cupertino, and the prosecutors office in Cupertino. You then had to serve the subpoena/SW in-person at their Cupertino HQ. Say what you want about Apple, but there’s no question that they go above and beyond their competitors when it comes to their users’ privacy. The spat playing out in the news between Cook and Zuck might seem like posturing on both sides, but I think Apple’s argument is genuine. They believe that people should be able to pay more for more control over their data. Facebook believe that the harvesting data is necessary to keep the internet cheap or free to maintain low access barriers. Both are valid points. But it seems to me that the more aware you are of what Google and FB do with your data, the more willing you will be to shell out for devices and services which not only promise not to give your info to every Tom, Dick, and Harry but also have NO INCENTIVE to do so. The median consumer isn’t dumb: they know there’s no such thing as a free lunch. The bulk of the price difference between Android and Apple phones isn’t down to operational efficiencies or technology, it’s down to the vastly different business models. With Apple devices, you know how the sausage is made (i.e. your hard earned cash). With Android, you don’t—-but most people figure it out sooner or later. The more tech savvy the consumer becomes, the more they’ll realise what the real “price” of an Android phone is, and the more attractive Apple devices (or any product which doesn’t make consumers pay for stuff in ways they don’t fully control, consent to, or understand) become. Of course, one could argue that emphasis on privacy differs from culture to culture, but the data privacy piece also bears on rapidly changing understandings of healthy tech use. In lots of places, people just don’t care as much about privacy as the average American does. London is one of the most heavily surveilled cities in the world, and the vast majority of Londoners couldn’t care less. But consumers are increasingly learning how technology can not only add but detract from their lives. There was that Netflix doc (which I didn’t see) about why social media is addictive and makes a bunch of people unhappy etc., then there’s this latest report about how FB is bad for lots of people, but there’s a larger trend there and it is catching up with those areas within the tech industry. To varying degrees of obviousness, Apple exudes alignment with what its customers actually want for themselves. Apple compiles data on your phone usage; if you want to use your phone less, Apple helps you do that by letting you put time limits on your usage of whatever apps you want to use less. The power of these subtle features at ensconcing product loyalty is often overlooked. Your average punter’s market macro analysis tends to view consumers as crude neoclassical utility functions, but I don’t think it’s unreasonable to assume that consumers notice thiede little tells on some level or another. We’ve evolved to be able to judge whether someone can be trusted based on their actions. Phones aren’t people, but they are a proxy for a corporate entity which everyone understands is a consortium of people who want to make money. These are devices we have increasingly intimate relationships with. These devices are demonstrating increasing levels of sentience and intersubjectivity. I know this sounds far-fetched at first, but it makes sense when we consider that the shift to AI is not a 0-to-perfect AGI but rather a gradual shift in which machines will steadily accumulate feature of sentience. The main change, though, is consumer knowledge. When we learn about how our digital overlords make their trillion dollar sausages, we can say: ok, Apply IS charging me an arm and a leg for this stuff, but at least everything is above the table, and at least they’re looking after me once I buy into their ecosystem. A new android customer now is more likely to know that Android is owned by Google; they are more likely to know how Google makes money, and they may be more aware of the deleterious daily grind of being bombarded with highly targeted marketing designed to make you pay the difference (as the person I’m replying to mentioned). If you can afford it, if you value your time and attention, and if your recognise how the forces on online marketing can influence your behaviour in ways you don’t want it to, you may well decide that you’d rather pay an extra few hundred bucks for the Apple product. Indeed, the Americans here need no reminder of how much economic self-interest people may be willing to sacrifice for a greater measure of perceived transparency and probity.

justicezyx 5y ago

> Asian countries with a long history of promoting market share, access to information, and knowledge transfer at the expense of short-term profit. Apple doesn't transfer anything right?

beckman466 5y ago

> ...with only a 13% share of units. > Asian countries with a long history of promoting market share, access to information, and knowledge transfer at the expense of short-term profit. Apple is the king of parasitic technological and scientific knowledge rentierism and obfuscation, as well as king in exploitation. it's neo-imperialism at it's most 'refined'. profits are surplus value extracted from workers, including the intellectual property extracted by knowledge workers [1], [2]. monopolistic 'vertical integration' means zero interoperability and maximum alienation (through the division of labor, and the creation of systematic knowledge hierarchies): 'designed in California, made in China' is supposed to modestly signal American intellectual 'talent', yet which instead just shows the insane level of manufactured consent achieved by SV and the US in their science and tech monopolization [3]. don't think it's so bad? Vijay Prashad: "iPhone workers today are 25 times more exploited than textile workers in 19th Century England" [4] [1] https://tribunemag.co.uk/2019/01/abolish-silicon-valley https://tribunemag.co.uk/2019/01/abolish-silicon-valley [2] https://venturecommune.substack.com/p/go-where-workers-are-and-organize https://venturecommune.substack.com/p/go-where-workers-are-a... [3] Marianna Mazzucato, https://web.archive.org/web/20160204223931/https://nybooks.com/articles/2014/04/24/innovation-government-was-crucial-after-all/ https://web.archive.org/web/20160204223931/https://nybooks.c... + https://marianamazzucato.com/books/the-entrepreneurial-state https://marianamazzucato.com/books/the-entrepreneurial-state [4] https://mronline.org/2019/09/29/iphone-workers-today-are-25-times-more-exploited-than-textile-workers-in-19th-century-england/ https://mronline.org/2019/09/29/iphone-workers-today-are-25-...

tomjen3 5y ago
>don't think it's so bad? Vijay Prashad: "iPhone workers today are 25 times more exploited than textile workers in 19th Century England" [4] One thing I love about studying history is that you can dismiss claims like that immediately.
- sudosysgen 5y ago
  But if you did you couldn't. The ratio of wages to profit made on the item is way higher for iPhones. The quote is literally true. Textile mills in 19th century England operated with comparatively pedestrian profit margins and factory wages were a much higher proportion of expenses. It's estimated that the assembly costs of an iPhone are in the 20-50 dollar range, the profit margin is in the 300+ dollar range, clearly the ratio is much higher than in any textile mill.

clairity 5y ago

it’s been like this for a long time (in fact, they used to have ~90% of profits on ~10% of share), which is why apple has the market cap it does. apple has a differentiation strategy, which explicitly goes after fatter profits rather than volume. the handset market is so large however, that apple can still have plenty of volume (100 million units/year) to drive down cost with economies of scale.

ksec 5y ago
>it’s been like this for a long time Yes. It has been like that since the day iPhone was launched. Arguably the whole (modern) Smartphone Market history. So I am kinda surprised to see some of the reaction here. And it was easy in the old days when iPhone was in Financial Segment with ASP and unit volume. Now it is hard to judge without those Data. And no where on the site do they mention how they calculated the profits. Also worth mentioning Apple used to make 95%+ if not more than 100% profits because other vendors were losing money.
- panda88888 5y ago
  Yes, I remember back then there was an article about Apple making more than 100% of the profits in the smartphone market, because most of other competitors are losing money trying to increase market share. Edit: here it is https://www.forbes.com/sites/parmyolson/2016/11/04/apple-grabs-more-than-100-of-smartphone-profits/amp/ https://www.forbes.com/sites/parmyolson/2016/11/04/apple-gra...
- syshum 5y ago
  >>So I am kinda surprised to see some of the reaction here. Because people are starting to wake up to the idea that simply defining the market as "Mobile Handsets" for Anti-Trust purposes is flawed. The only way a company can achieve this level of profitability is by excluding competition from their market, The idea that apple "Competes" with other Handset manufacturers is clearly flawed, as these statics show. Apple is a monopoly and should be treated as such, to the point they should be required to open up their ecosystem to competition

ewzimm 5y ago

I wonder if that 13% of units might actually account for 75% of mobile computing power. Apple’s budget iPhone SE has over 41% higher single core performance than Samsung’s flagship Galaxy S21. And the vast majority of Android sales worldwide are not flagship devices.

wayneftw 5y ago

In the US their unit share is now greater than 50%. It's too bad that they're taking all of our money and not exporting much. And for a country that loves "freedom" so much, it's also too bad that we don't make Apple sell us devices that we can actually own and control, by simply voting with our dollars.

fomine3 5y ago
iPhone is also sold well in Japan. Market share is a bit decreased but still about 40-50%. Take our money!
- wayneftw 5y ago
  They will take your money and if you keep giving it to them they will continue taking more and more of your freedom too.
  - fomine3 5y ago
    Yes this is more problem than importing phones (anyway actually we import from China mostly). Our freedom is censored by foreign US company because we buy Apple.

bane 5y ago

I was in a discussion the other day how every other attempt at bringing computing to underdeveloped parts of the world has more or less failed (OLPC for example), yet cheap Android phones have managed to become ubiquitous in places without stable electricity, running water, and stable or repressive governments.

azinman2 5y ago
Scale is the easiest way to make something cheap, and having a device targeted at every human rather than just school kids is going to be the best way to achieve scale. But as far as education goes, phones aren’t as good as a laptop as far as form factor. But better than nothing I suppose!
- b9a2cab5 5y ago
  More likely is that cell phones all have mobile data, whereas laptops have not historically had that except on high end business models. Devices are pretty useless to the average person without the internet, so in places with poor connectivity laptops end up being useless.
  - cbhl 5y ago
    OLPC also suffered from durability issues (repairs required sending the laptop back to the US, IIRC?) and cost issues (they never did hit the $100/unit price point) Even Raspberry Pi leverages the scale of Broadcom chips, which also get used in Android phones
    - na85 5y ago
      OLPC was a really cool idea, but it turned out to be yet another in a long line of "good-idea fairy visits a wealthy first-worlder with yet another way to fix the third world", like What Three Words, etc.
      - azinman2 5y ago

SavantIdiot 5y ago

> with a long history of promoting market share, access to information, and knowledge transfer at the expense of short-term profit. Can you back this up? Because last time I checked Hauwei was bent on supplying phones and phone tech for the entire planet.

jollybean 5y ago

Low cost competitors generally only know how do do just that: make things cheaply. That's their competitive advantage, and they leverage it. Apple is a marketing and tech company, and they're good at keeping prices up. Both of them think they are doing better in the long-term. There is no notion of 'sharing' etc. among the low cost competitors, if they could use some kind of IP-rights to hold out their competitors, they would. That said, it should be noted that 'making stuff' is still where the bulk of the money is, even if it's not raw surplus.