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Google Earns $2 Per Handset; Apple, $575
Hugh Pickens writes "While Apple generates more than $575 in profit for every iOS device, and according to estimates in 2007 Apple earned more than $800 on every iPhone sold through ATT, Horace Dediu reports that Android generated less than $550m in revenues for Google between 2008 and the end of 2011, earning only $1.70 per year, per Android device — explaining how Apple is sucking up two thirds of the profit in the mobile phone business. Dediu's starting point is a settlement offer Google made to Oracle of $2.8 million and 0.515% of Android revenues on an ongoing basis. His assumption is that those numbers represent Google's revenue from Android to date. 'If this is the case,' writes Dediu, 'We have a significant breakthrough in understanding the economics of Android and the overall mobile platform strategy of Google.' Of course profitability is not the only reason Google is in the mobile phone business. 'P&L considerations were not the only (or even at all) factors in investment for Google. Having a hedge against hegemony of potential rivals, having a means to learn and develop new business and having a role in defining the post-PC computing paradigm are all probably bigger considerations than profitability,' writes Dediu. 'My take is that [Android] is not a bad business. But it's also not a great one.'"
Do "Android revenues" include advertising, e.g. ads shown in apps?
Still, Apple does get to pick the cream of the crop.
What explains such difference? Apple's hardware doesn't seem to be inferior? The device's prices seem to be comparable, as far as top tiers are concerned... Is the difference...Foxconn?
The whole idea of Android is provide Google with access to a market from which it would otherwise be excluded. So what Google makes on Android is still a whole lot more than what it makes on iPhones.
With Android now looking to expand across the whole computer spectrum including, shock horror, the desktop. That gives Google access to the whole market, regardless of the efforts of Apple and of course M$.
Chaos - everything, everywhere, everywhen
Most work which is done on a PC, still needs to be done on something resembling a PC form factor.
Just because you can e-mail, IRC and browse the web on a mobile phone it doesn't mean you can reasonably produce a substantial document, piece of art or CAD work. Yes, you /could/ do it, just as you could tap out a representation of anything with a single Morse key, but you'd be working so inefficiently and with so much punishment to your upper limbs that no business would consider it.
carriers screw the customers.. their profits go straight to apple.
I zone out whenever I read crap like this......
"The average reporter we talk to is 27 years old......They literally know nothing." - Ben Rhodes
What I'm incredulous about is the fact that Apple users spend an average of more than $600 on apps & markup. Sure, for addicts who buy an all the licensed accessories tons of apps, etc, but for the 'average' to give that much to Apple, it just shows how much an Apple product will cost you. I spent $150 on my Android device (refurbished no-contract from T-Mo), and have never spent a penny on apps or accessories, except for a $2 car charger. I've had it for over a year, and have a dozen or so apps, including several full games and some very useful, professional-grade reference utilities.
I thought an iPhone cost $399. How can they make a profit of $575 per unit?
This article compares Apple, a hardware maker, with Google and Android, who provides software to hardware makers? How is that a fair comparison?
Google apparently earns 80% of its mobile revenue from iOS devices and 20% from Androids devices.
They make their money off from ads and data collection - not from devices.
It's the reason Google pushed so hard for their new privacy policy which was supposedly supposed to be "better for the consumer" and the reason that they're forcing everyone into Google+ when they sign up for a Google account.
According to wikipedia, Apple sold 72 300 000 iPhones in 2011.
That leaves two possibilities for now:
Windows 2000 - from the guys who brought us edlin
This guy makes some pretty amazing leaps here. Based on the proposed settlement for one patent (under the condition that infringement is actually proven), he assumes that the offered $2.8m must clearly scale by the offered royalty rate (again on one patent, again on the condition of infringement being proven) to overall Android revenues. I don't see any indication that this must actually be the case, but it sure is a fun way to make up some numbers.
M$ probably makes more money on Android than Google itself; that alone tells a lot about M$, Google, Apple and patent laws (specially USA laws).
- Apple achieved such a degree of market domination, other h/w makers are forced to adopt Google's Android;
- M$ is so low as to go for the money, only; I mean low not only in an ethical level, but also regarding lack of strategic vision on their part;
- Google is not only a good corporate guy, protecting capitalism from monopolies, it also set a standard for corporate greed -- even without any previous regulations... very good!
- patent laws are stupid because they exist to protect the tycoons not the poor inventor, therefore they must be killed -- to foster innovation and to lift the stone that protect the vermin which live off useful corporations.
Also, on an indirect note, all that was made possible by the GPL.
If we have hopes of taming such uncontrolled control by few corporations and enable healthy competition, GNU (& Linux) are our only remedy to outrun even ultra-competent organizations like Apple and greedy weasels like M$. Though RMS might be originally worried about the developer ecosystem, such economic healing consequences are certainly a more than welcome bonus from his ideas.
If I interpret TFA correctly, this is all based on Google's figures for Android revenue in a settlement offer Google made to Oracle...
I'm sure that Google bent over backwards to inflate that figure as much as possible by including every possible source of indirect income from ads, service sign up, user data collected, desktop users switching to Google Mail/Docs/Calendar to better sync with their phone etc. so that they could pay Oracle absolutely every penny they deserved. I can't think of any reason why they would try every legitimate tactic to make that figure as small as they possibly could. Can you?
Google produced Android as part of a long-term strategy to attract people to their online services. There's going to be a lot of "intangibles" there that are very difficult to account for.
In a survey of 100 programmers, 111111 thought that duck-typing was a good idea.
This is just like chrome - Google are not doing it to make money, they are doing it to ensure they have a good position for their core products. Sure, it'd be nice to get some money on the side, but making sure phones continue to evolve and push the boundaries benefits Google a lot, just as browsers doing so did too.
Google are protecting against a monopoly where the market stagnates, because as a big player, it can push innovation. Which also happens to be awesome for the consumer.
-- Lattyware (www.lattyware.co.uk)
Isn't it obvious who will earn more?
Why make BILLIONS when you can make...millions!?!? Bwa-ha-ha-ha-ha!
Google doesn't make money from handsets. They could give those away for free.
Google makes money from: app sales, advertising revenue, selling behavioural information, selling private information, etc. They'll probably make the $575 off you in a year.
Google's positioning as a panopticon is very strategic. They had help going where they are now.
http://www.youtube.com/watch?v=kAG39jKi0lI
The authors stance is how can I make Apple look better so facts be damned. This is the typical Apple puff piece designed to get people to buy more Apple stock. How else do you think Apple's stock is going to hit the target of $900/share.
So, we have a Slashdot article that's using figures from another Slashdot article from when AT&T had an exclusive deal with Apple.
Not only that, but the original Slashdot article that is used as the "authority" for the Apple figures completely ignores the manufacturing cost of the iPhone.
So here, we see Slashdot click-whoring (once again!).
Newsflash! Companies make money on the stuff they sell!! Film at 11 !!!1!!!111!
The "math" in both this, and the 2007 "Apple" article is so incomplete and just plain out-of-whack that this article is an embarrassment to not only Slashdot, but to "Journalism" in general.
Yet again people are attempting to compare a company that makes phones with a company that does not make phones. Why not look at how much one particular manufacturer makes from selling their phones. If the profit margins on Androids are really as bad as this makes it seem then why are they so expensive?
It should be no surprise to anybody at this point that Apple has found the most efficient way to screw their customers out of the most money possible for the same thing you get from everyone else.
As far as I'm concerned, Apple not being evil ended with the introduction of the Intel Mac. They went all dictator-over-everything after that, from hardware to support plans to software to development process. Completely awful bullshit methods, just to keep it all under their thumb and guarantee all possible profits flow into their wallet and not the devs or consumers.
Is it really worth paying almost twice as much for everything for that?
If the only way you can accept an assertion is by faith, then you are conceding that it can't be taken on its own merits
Bill Hewlett said it best: if u care abt software u shud make ur own hardware
Since Apple build the iPhone, and there are dozens of manufacturers build phones for Android. All Google get out of every Android sale is a royalty - a thank you from the manufacturer to say "Thank you, Google, for allowing us to use your platform which saves us from having to develop our own!"
Operation Guillotine is in effect.
It's a general-purpose computer when you can write, build, and test computer programs on it. An Android device is a general-purpose computer. An iOS device is not, due to the digital signature requirement, or at least it clearly wasn't back when Apple was banning BASIC and Lua interpreters. A "personal computer", then, is a general-purpose computer designed to be used interactively and locally. The 8-bit micros of the 1980s were personal computers, as is every Mac running Mac OS X and every Lenovo-compatible PC running Windows, Linux, or *BSD that isn't used primarily as a server, and even many Texas Instruments graphing calculators. An Android tablet is also a personal computer despite not being Lenovo-compatible.
I find your definition too broad in my opinion, and I'd like to work with you on refining it by example. Is a Game Boy a "post-PC computing" platform? Is a Wii? If not, why not? Furthermore, you've shifted the issue to defining "laptop", whose line has been blurred by products such as the ASUS Eee Pad Transformer and even the iPad in a keyboard case.
Well, let's be for real - originally, the biggest reason for Android's creation was to be a drop in replacement for the WinMo "threat" a few years ago, prior to iPhone. Notice how, back then, the hardware requirements for Android always matched said requirements for WinMo. Basically, Google wanted to make sure they weren't cut out from the mobile ad markets (remember Microsoft stating "they [MS] were going to cut off their [Google] air supply").
Fast forward to today, and with the different smartphone landscape, Android is now competing directly with iPhone, but using a totally different method. Apple profits off of the hardware and kickbacks from mobile carriers, whereas Google profits off of the ad revenue from the "Google Experience" that must be loaded on a phone/tablet(otherwise, said phone/tablet cannot utilized the Android trademark, hence the Kindle Fire's marketing terms stating "based on Android"). I'm sure these required apps gives Google a lot of access to data for their end users (translation - end users = product, Advertisers = customers). Basically, Android was always a good business model, when you keep your eyes on the prize - that Google makes most of their money from Ads, and they do like to mine data of their end users to boot (to better target the ads of course).
My MBP has a lot more CPU power and a development environment, and much more storage, but I can perfectly well connect the iPad to a server for that sort of thing. Why should I carry it around with me, or even have it cluttering up my office. I have a decent SSH client on it.
What device are you going to SSH to if you have zero bars of Wi-Fi because, say, you're riding a bus? Or if you don't know the WEP/WPA key of any of the hotspots around you because, say, you're waiting to catch a bus? Mobile SSH requires a 600 USD per year data plan. Running applications locally on a PC does not. And that's why I carry a 10" laptop.
There are two things a tablet can do that a desktop, or even a laptop won't do:
1. Weigh less than 1kg and fit in a handbag or large pocket 2. Be usable (at least for some purposes) by random members of the public with no special training or experience
My 10" laptop fits in a handbag. I admit that it's noticeably heavier than an ARM tablet, but ability to do "PC things" makes up for the weight difference.
Be usable (at least for some purposes) by random members of the public with no special training or experience.
It's my understanding that any device for creating, as opposed to a device primarily for viewing, will require some sort of "special training or experience."
Google's revenue per handset from application sales is lower because Android users expect applications to be small-f free. This is in turn because early versions of Android Market (now called Google Play) could sell paid applications in only a handful of countries, forcing developers to make their applications free (and usually ad-supported) or put them on other marketplaces that reach those other countries (such as AppsLib or SlideME) in order to reach users in those countries. Paid applications create revenue for Google only if sold through Google Play, and ad-supported applications create revenue for Google only if they use AdMob, not another company's ad network.
ok, windows phone might be a minnow now, but they owned the pda/smartphone market once
But Microsoft gave the PDA market away to when it killed the Pocket PC in favor of smartphones halfway through the Windows Mobile 6 generation. A lot of parents aren't willing to buy a phone with a premium voice and data plan for each of their children to use as a gaming device; instead, they buy a PDA such as the iPod touch. And until the Galaxy Player debuted in October of last year, the iPod touch was the only PDA with a major app store for three years straight.
When you don't even know what year it is -> http://news.slashdot.org/comments.pl?sid=2772023&cid=39609055 Hmmm? LMAO!
When they say apple "makes" 575/ handset they mean revnue not profit. If you assume all handsets cost the vendor (phone company usually) about the same then the revenue per handset is the same for android or iphone. How much of that is profit? Well it depends on the margins of Apple and samsung. Presumably samsungs margins are higher than apples (since apple contracts to samsung for parts.).
Some drink at the fountain of knowledge. Others just gargle.
That might be a bit more apt should Apple introduce apps for Apple TV. Then one could compare Apples (Apple TV) to Microsofts (Xbox 360).
If Google has only a few hundred employees working on Android, probably at a cost of $100 million, I would say Android is worth it to Google if it keeps Apple from completely controlling the smart phone market.
Let other companies can tidy it up.
Assuming no wars or major natural disasters, the cost of a decent laptop or tablet will be under $75 (in inflation adjusted currency) in about 7 years.
Impossible?? Well think about it .. you can get a tablet today for $50 that performs better than any available smartphone of 2005 and with higher resolution too. So add $25 to that $50 improve the build quality. Guess what you have $75 tablet performing at least at the level of today's new iPad .. which, at the risk of saying 640k oughta be enough for everyone, is good enough for many scenarios -- when CPUs first hit that "good enough" point (2 to 3GHz) people no longer cared about upgrading their desktops and wanted laptops. Speaking of which, the price of ultrabooks are headed for collapse too. Although the price of laptops have not changed .. once Windows 8 comes out there will be ARM based laptops and we'll see a price collapse .. as people adapt future versions of Android to better take advantage of keyboards (actually it already supports it). Current Walmart netbooks are in the $300 price range .. because they perform at the level of $400 tablets. So there is no competitive pressure to drop in price. Once high performance tablets are available at $75 we'll see the hardware prices drop.
Furthermore, Android will be built into everything. Your car will have an Android touchscreen. Your personal robot will have it too.
Apple has a software monopoly for their platform; iOS. They don't have to be concerned about manufacturers or end users picking a different OS, because they manufacture both the device and its software as one integrated, inseparable unit.
Once an end user is sold on their platform; Apple gets both the hardware and software profits.
Google gets only some software profits from Android and possibly patent royalties. If Google tried to raise prices on the OS too much, hardware vendors would likely switch to a competitor such as Windows 7.
Amen! Lets see a real comparison. I want to see what all of the Android device manufactures combined are making on their phones combined with what all of the pay apps are making on the market, and what Google makes off of all the advertisements. Apple does it all which is why they appear to be making much more but in actuality this is an apples to dog crap comparison. Lets get the math straight here people!
That said, my best guess: the IDE will be running partly in Javascript on your browser and partly on a server.
Making it impossible to work when I have zero bars. For the price of 24 months of cellular data at $50 per month (source: verizonwireless.com), I could buy four netbooks.
Installing software on the thing you hold will be about as strange as installing hardware on it is now.
Hardware like a microSD card or a keyboard?
But becaue Google's search, maps, and YouTube were the best in the business. That was the reason apple went with them the in the first place, and the reason they haven't been fully replaced yet.
The only reason Apple is moving away from them is because Google has become a direct competitor. Thus Apple is investing good money and engineering effort building replacements for perfectly good, extant services.
Which makes it a legal document, and Google would be flirting with perjury if they didn't provide clear and accurate information per the judge's request. If the judge believes that Google acted in bad faith by gaming the numbers there could be severe sanctions. They're walking a fine line here, and they'd better have damned good lawyers to make sure they don't cross it.
such that the PC mostly withers away back to it's original place, in the office.
Then the question becomes how long PC manufacturers will continue to sell affordable products targeted at a "home office" or a "mobile office" (e.g. someone on business travel or who telecommutes from a coffee shop), or whether one will have to pretty much start a business to be able to afford "office" products. If PCs become a niche product, will students and hobbyists still be able to procure the PCs they need for their study or hobby?
When a market shrinks due to falling demand, the price drops.
Unless it increases due to fixed costs and loss of economies of scale, once firms have left the market and lefted the supply curve.
Of course the Asymco study looks at the profitability of devices and carrier fees taken together. It fails to consider that unlike Apple, Google is not primarily a hardware, software and media delivery company. Google's profitability is driven by advertising revenues. I wonder how Android's profitability numbers would look if the study took into account direct and indirect advertising revenues driven by the Android platform?
It's not a fair comparison, unless the point is that it is more profitable to sell the OS and the brand as well as the hardware. No surprise there, if you can make it work and Apple deserves the credit for pulling it off - though I still won't have any of their stuff. A fair comparison would be to make an estimate of the profit made by HTC, Samsung, Motorola, Asus, etc. on the sale of Android devices, combined with the profit made by Google off the platform. Looking at it that way, Android is likely to generate a lot more profit than iOS, just not for a single company. If Apple were to split into a hardware and a software and services company, which one would generate the most profit: the hardware one, or the software and services one? I would bet the hardware part, assuming that nothing else changes and they maintain a closed platform between the two. Google is on the software side of things, though that is slowly changing since their acquisition of Motorola Mobility.
Once a product is discontinued, the only source for this product is "second hand gear". And several companies such as Dell have been discontinuing their 10" laptops. If the 10" laptop is reintroduced, it'll probably be as an extension of either a tablet line or an ultrabook line, both of which currently have much bigger margins than the 9-10" laptop fad of 2008-2010 had. Compare the list price of a typical 2009-vintage netbook to that of an ASUS Eee Pad Transformer with the keyboard accessory.
Ur post parent 2 this shows u in error on dates http://news.slashdot.org/comments.pl?sid=2772023&cid=39609055 - check ur calendar.
Even with a developer account, can one develop directly on the device by adding an external keyboard, or does one also need to buy a MacBook Air?
In that case, an iPad is a PC, but it's a very expensive ($895) PC that stops working after four years. One could buy two Transformer tablets for that price.
Why would it stop working after 4 years?
In year 1 you buy an iPad ($499) and an iOS developer certificate ($99). In years 2, 3, and 4 you renew the certificate ($99 each). Once you stop renewing the certificate, your iPad stops being a PC.