4 ms·

The total addressable market is saturated now. Gains from Android are slow and difficult. So continued growth depends on more money from existing customers.

SllX 4y ago
No. That’s the line, that’s the word on Wall Street, but it’s also complete crap. Apple spent a decade and a half as the iPhone company and for a long time that was exactly the right call. They have other product lines with more than enough room to grow in the market, but they have to hunger for it, like they did from 1998 to 2008 with the Mac, and 2007 through the current day with the iPhone. Almost anything Apple puts out will sell in quantity as long as it doesn’t have exactly a voice-controlled UI, and while Microsoft and Intel are busy shitting the Wintel bed Apple is putting out top-tier high margin computer hardware with obvious gaps on the low-end, the middle and the ultra high-end and the thing keeping Apple from fully capitalizing on that is they’re shitting the bed with their own OS and tunneled in on nickel-and-diming their existing install base. The global music industry was $26B in 2021: https://www.bbc.com/news/entertainment-arts-60837880 https://www.bbc.com/news/entertainment-arts-60837880 The global movie industry in 2021 was $90.2B: https://www.grandviewresearch.com/industry-analysis/movies-entertainment-market https://www.grandviewresearch.com/industry-analysis/movies-e... The global TV industry in 2021 was $259.16B: https://www.grandviewresearch.com/industry-analysis/television-market-report https://www.grandviewresearch.com/industry-analysis/televisi... Grand total: $375.36B Apple’s revenue in 2021 was $394.3B, and some portion of that is already accounted for in the Music, Movies and Television revenue for 2021 but if they really want to grow, then they need to go back to their roots: hardware running software of quality. Services will only be a segment and most of their “services” revenue depends substantially on the size of their hardware’s install base. They can still offer those, but if you build good products, the profit will follow. Apple was the one that built their business on that philosophy. Either that or become a bank.
- jhoelzel 4y ago
  I have been saying for quite some time now that apple could probably just buy greece or some other indebted frist world state. Appleonia and Facebookistan. Even though the latter may turn out to be just a parking lot with a MCDondalds
- simonh 4y ago
  Market share is the wrong thing to look at, yes Apple has a small desktop/laptop market share, but they utterly dominate the profit share. This is the real question: How is Apple going to fill the gaps you see in the low end PC market, where there are very small profits to be found, without cannibalising it's own high end profit margins? For the wintel PC makers market share is all that matters because they are all trapped in the commodity sector, so volume is the only way to grow profits. Apple isn't, it's a premium brand, so the economics it lives by are completely different. Analysts have been getting this wrong about Apple for decades, in fact pretty much my entire adult life, and I'm in my 50s. Commodity companies can afford to stagnate their products, Cocacola makes the same sugar water they did before I was born. Premium product companies cannot afford to do that, they have to constantly invest in renewing and updating their products. Apple has been doing that for almost their entire existence (modulo a period of stagnation in the 90s when the execs didn't understand their own business). On the software side I don't really agree, yes they have quality issues, but so does all software and they have incredibly complex stacks these days. They're constantly pushing forward with new software features, that's part of the problem, new features means new bugs.
  - mschuster91 4y ago
    > They're constantly pushing forward with new software features, that's part of the problem, new features means new bugs. Only if you don't invest in testing - and Apple sadly has fallen to the trap of "bananaware" (ripens at the customer) as well as everyone else. "We ship it once it is good quality" has been replaced by "we ship it as soon as it can survive the presentation at WWDC and fix the bugs later on". For commodity manufacturers this can be excused by low profit margins (even though I don't like it), but Apple could literally double their developer headcount and they wouldn't feel it in their bottom line.

SllX 4y ago

No. That’s the line, that’s the word on Wall Street, but it’s also complete crap. Apple spent a decade and a half as the iPhone company and for a long time that was exactly the right call. They have other product lines with more than enough room to grow in the market, but they have to hunger for it, like they did from 1998 to 2008 with the Mac, and 2007 through the current day with the iPhone. Almost anything Apple puts out will sell in quantity as long as it doesn’t have exactly a voice-controlled UI, and while Microsoft and Intel are busy shitting the Wintel bed Apple is putting out top-tier high margin computer hardware with obvious gaps on the low-end, the middle and the ultra high-end and the thing keeping Apple from fully capitalizing on that is they’re shitting the bed with their own OS and tunneled in on nickel-and-diming their existing install base. The global music industry was $26B in 2021: https://www.bbc.com/news/entertainment-arts-60837880 https://www.bbc.com/news/entertainment-arts-60837880 The global movie industry in 2021 was $90.2B: https://www.grandviewresearch.com/industry-analysis/movies-entertainment-market https://www.grandviewresearch.com/industry-analysis/movies-e... The global TV industry in 2021 was $259.16B: https://www.grandviewresearch.com/industry-analysis/television-market-report https://www.grandviewresearch.com/industry-analysis/televisi... Grand total: $375.36B Apple’s revenue in 2021 was $394.3B, and some portion of that is already accounted for in the Music, Movies and Television revenue for 2021 but if they really want to grow, then they need to go back to their roots: hardware running software of quality. Services will only be a segment and most of their “services” revenue depends substantially on the size of their hardware’s install base. They can still offer those, but if you build good products, the profit will follow. Apple was the one that built their business on that philosophy. Either that or become a bank.

jhoelzel 4y ago
I have been saying for quite some time now that apple could probably just buy greece or some other indebted frist world state. Appleonia and Facebookistan. Even though the latter may turn out to be just a parking lot with a MCDondalds
simonh 4y ago
Market share is the wrong thing to look at, yes Apple has a small desktop/laptop market share, but they utterly dominate the profit share. This is the real question: How is Apple going to fill the gaps you see in the low end PC market, where there are very small profits to be found, without cannibalising it's own high end profit margins? For the wintel PC makers market share is all that matters because they are all trapped in the commodity sector, so volume is the only way to grow profits. Apple isn't, it's a premium brand, so the economics it lives by are completely different. Analysts have been getting this wrong about Apple for decades, in fact pretty much my entire adult life, and I'm in my 50s. Commodity companies can afford to stagnate their products, Cocacola makes the same sugar water they did before I was born. Premium product companies cannot afford to do that, they have to constantly invest in renewing and updating their products. Apple has been doing that for almost their entire existence (modulo a period of stagnation in the 90s when the execs didn't understand their own business). On the software side I don't really agree, yes they have quality issues, but so does all software and they have incredibly complex stacks these days. They're constantly pushing forward with new software features, that's part of the problem, new features means new bugs.
- mschuster91 4y ago
  > They're constantly pushing forward with new software features, that's part of the problem, new features means new bugs. Only if you don't invest in testing - and Apple sadly has fallen to the trap of "bananaware" (ripens at the customer) as well as everyone else. "We ship it once it is good quality" has been replaced by "we ship it as soon as it can survive the presentation at WWDC and fix the bugs later on". For commodity manufacturers this can be excused by low profit margins (even though I don't like it), but Apple could literally double their developer headcount and they wouldn't feel it in their bottom line.