3 ms·

I enjoy how the author takes the iPad (which has been out since March) and the Kindle Fire (which hasn't been released yet) and manages to equate them completel

I enjoy how the author takes the iPad (which has been out since March) and the Kindle Fire (which hasn't been released yet) and manages to equate them completely devoid of context. Here are some things to consider: 1. One of the form factors touted around for the iPad mini is the 8.9 inch form factor. No one expects the iPad mini to be the same price as the iPad 3. So that $200 difference may be a temporary advantage. 2. The iPad/iPhone app store has been around since 2008. Folks who have purchased an iPhone and an iPad may have sunk substantial money into buying apps. That "sunk cost" is just another hurdle any other tablet maker is going to have to beat. 3. People talk about how Amazon and Google are "giving away the razor and selling razor blades" and Apple is in the hardware business. That's quite simply BS. Apple gets 30% of the gross from the App store, including in-app purchases. Those 99 cent Angry Birds downloads add up. The app store may not have been a big profit center in 2009, but we're not in 2009 anymore. 4. Frankly, I'm excited that Google and Amazon are bringing competition to the iPad-dominated tablet market. Competition means better prices and better services. However, I'm not calling a winner to this round until we see what Apple has up its sleeve.

lelandbatey 14y ago
Hey, I see you mention the iPad mini. I've heard nothing about this, and I thought it was a rumor. Brief internet searches are very unclear, and a lot of the info seems circular. Could you post the main source for the iPad mini information?
- officemonkey 14y ago
  I'm surprised you've heard nothing about this. Apparently you don't read "Daring Fireball." These two articles are vague but well-sourced: * http://www.bloomberg.com/news/2012-07-03/here-comes-nexus-7-nightmare-the-ipad-mini.html http://www.bloomberg.com/news/2012-07-03/here-comes-nexus-7-... * http://online.wsj.com/article/SB10001424052702304141204577506471913819412.html http://online.wsj.com/article/SB1000142405270230414120457750... Apple is rumored to be revealing a smaller iPad tablet during an event this October. Most people are calling it the iPad mini. I'm calling it the reason I haven't bought a Google Nexus 7.
k-mcgrady 14y ago
>> "3. People talk about how Amazon and Google are "giving away the razor and selling razor blades" and Apple is in the hardware business. That's quite simply BS. Apple gets 30% of the gross from the App store, including in-app purchases. Those 99 cent Angry Birds downloads add up. The app store may not have been a big profit center in 2009, but we're not in 2009 anymore." Apple has paid developers a total over $4bn as of June this year. That's nothing for them compared to what they make on hardware.
danilocampos 14y ago
Agreed on the bulk of your points, however: As a percentage of revenue, Apple makes less from the iTunes Store today than they did six years ago. They operate it close to break-even as a means of selling more hardware. http://i-cdn.phonearena.com/images/articles/63878-image/Apple-Revenues-Slopegraph2.png http://i-cdn.phonearena.com/images/articles/63878-image/Appl... Running the store means: - Employing god knows how many app reviewers - Employing dev relations, marketing, design and other support roles - Paying for credit card transaction fees - Maintaining server infrastructure at extraordinary scale with ridiculous uptime requirements None of this is cheap. And none of the resulting revenue, in the hundreds of millions, comes anywhere close to the juice of hardware revenue, in the tens of billions.

lelandbatey 14y ago

Hey, I see you mention the iPad mini. I've heard nothing about this, and I thought it was a rumor. Brief internet searches are very unclear, and a lot of the info seems circular. Could you post the main source for the iPad mini information?

officemonkey 14y ago
I'm surprised you've heard nothing about this. Apparently you don't read "Daring Fireball." These two articles are vague but well-sourced: * http://www.bloomberg.com/news/2012-07-03/here-comes-nexus-7-nightmare-the-ipad-mini.html http://www.bloomberg.com/news/2012-07-03/here-comes-nexus-7-... * http://online.wsj.com/article/SB10001424052702304141204577506471913819412.html http://online.wsj.com/article/SB1000142405270230414120457750... Apple is rumored to be revealing a smaller iPad tablet during an event this October. Most people are calling it the iPad mini. I'm calling it the reason I haven't bought a Google Nexus 7.

k-mcgrady 14y ago

>> "3. People talk about how Amazon and Google are "giving away the razor and selling razor blades" and Apple is in the hardware business. That's quite simply BS. Apple gets 30% of the gross from the App store, including in-app purchases. Those 99 cent Angry Birds downloads add up. The app store may not have been a big profit center in 2009, but we're not in 2009 anymore." Apple has paid developers a total over $4bn as of June this year. That's nothing for them compared to what they make on hardware.

danilocampos 14y ago

Agreed on the bulk of your points, however: As a percentage of revenue, Apple makes less from the iTunes Store today than they did six years ago. They operate it close to break-even as a means of selling more hardware. http://i-cdn.phonearena.com/images/articles/63878-image/Apple-Revenues-Slopegraph2.png http://i-cdn.phonearena.com/images/articles/63878-image/Appl... Running the store means: - Employing god knows how many app reviewers - Employing dev relations, marketing, design and other support roles - Paying for credit card transaction fees - Maintaining server infrastructure at extraordinary scale with ridiculous uptime requirements None of this is cheap. And none of the resulting revenue, in the hundreds of millions, comes anywhere close to the juice of hardware revenue, in the tens of billions.