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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.'"
It's the carriers subsidising...
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.
This article compares Apple, a hardware maker, with Google and Android, who provides software to hardware makers? How is that a fair comparison?
Or the fact Google doesn't sell phones?
Which was made by Samsung. This will change with the Motorola acquisition...
Except that Google wasn't excluded from the phone market. Apple used Google search, Google maps and YouTube as the shipping solutions. And Google gets the revenue from advertising on those.
Contrary to your assertion, there have been previous estimates that Google does indeed make more money per handset from iPhones than Android.
But because of Android, that income from iPhone is going to disappear. Apple is in the process of moving to other map and video solutions, and presumably has a plan to move from Google search too at some point.
With Android now looking to expand across the whole computer spectrum including, shock horror, the desktop.
Android is finding it tough to even spread to tablets. They have no chance on the desktop. Desktop requires apps in windows. By the time you add that facility to Android, you're pretty much back at Linux. And Linux has been failing to get a foothold on the desktop for 15-20 years.
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.
I'm sure Windows Phone will be as successful as the Zune, the Kin and the Spot Watch.
The whole idea of Android is provide Google with access to a market from which it would otherwise be excluded.
Furthermore, as a user, if I care at all about the profits that those companies providing technologies make, my interests lie much more in one that does not make 575$ in profit on a phone it sells me.
That is the whole idea of "opening" technologies, and actively investing markets that are on the verge of closing them.
On this one, I would hope that Google makes more than 2$ on each phone it sells, so that I am not left at the whims of Apple.
The article still fails on showing what google gets out of all of this - Information. By using an Android phone you pretty much become a google centric person. You'll use their mail, calendar, contacts, news, etc on mobile and even shift your PC habits to google. In turn that will allow them to give you better adds and to charge more from the companies that serve them.
Google's approach at android is pretty much the same as google's approach at e-mail. They gave you an e-mail service better than most payed services offered at the time (for free) just so they could profit from the information they gathered.
This kind of news is misleading since Google pretty much has been using that business model everywhere with enough success to keep betting at it. It might not generate as much raw money as apple from each handset (even though they might get some from the Nexus line), but they still make more than enough from each smartphone.
I'm sure Windows Phone will be as successful as the Zune, the Kin and the Spot Watch.
Anything Apple makes will be as successful as the Newton and Ping.
And anything Google makes will be as successful as Buzz and Wave(and G+?).
See, I too can make non-sequitur arguments by digging up past failures and ignoring successes like the XBox and Kinect(which is the fastest selling consumer electronic device ever).
This space for rent.
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.
Financial Analysis is ripe with ways of twisting the truth. It happens all the time.
Companies make it so they look like they are poor to the government to not pay taxes and Rich to the share holders to raise stock price.
The first formula you get in accounting is A=L+E Assets = Liability + Share Holder Equity.
So that means every risk you have is also part of an asset. Every Asset you have could be a liability.
when you do your numbers for a news article you can either Press on the Asset to make it sound really good. Or focus on the Liability to make it sound bad.
Numbers don't lie. But you need all the numbers to get the truth... We don't normally get all the numbers. and if we do most of us are either to afraid of the math or are too lazy to look at them and interpret it. We look at percentages and summarized data. Where they have been neatly prepared to show us what they want to show.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
But because of Android, that income from iPhone is going to disappear. Apple is in the process of moving to other map and video solutions, and presumably has a plan to move from Google search too at some point.
Wouldn't that happen anyway? If Android didn't exist, do you think Apple would be content to leave that revenue to Google permanently, as a sort of "thank you" for not competing in the mobile space? That seems awfully nice of them. In fact, I think it might be illegal.
The Xbox is only a success because Redmond bought it's market position.
And Google didn't buy it's market position in mobile by giving away an entire mobile OS for free to the OEMs. Can't believe how idiotic people can be in their hate and fanboyism.
The whole idea of Android is provide Google with access to a market from which it would otherwise be excluded.
Furthermore, as a user, if I care at all about the profits that those companies providing technologies make, my interests lie much more in one that does not make 575$ in profit on a phone it sells me.
That is the whole idea of "opening" technologies, and actively investing markets that are on the verge of closing them.
On this one, I would hope that Google makes more than 2$ on each phone it sells, so that I am not left at the whims of Apple.
No, instead you'd rather be left at the whims of Google and your carrier.
And rooting/jailbreaking doesn't count. What counts is what ships on the phone; because not 1 user in 10,000 has the interest, or the ability, to root/jailbreak their phones, regardless of platform.
I'm sure Windows Phone will be as successful as the Zune, the Kin and the Spot Watch.
Anything Apple makes will be as successful as the Newton and Ping.
And anything Google makes will be as successful as Buzz and Wave(and G+?).
See, I too can make non-sequitur arguments by digging up past failures and ignoring successes like the XBox and Kinect(which is the fastest selling consumer electronic device ever).
Add Google TV and Chromebooks to the list of Google failures. Apparently, Chromebooks sold only a few thousands, ouch.
http://www.eweek.com/c/a/Search-Engines/Logitech-Giving-Up-on-Google-TV-After-Losing-100M-344197/
http://www.digitimes.com/news/a20111109PD222.html
In June 2011, Acer and Samsung launched their Chromebooks ahead of other PC brand vendors, but by the end of July, Acer had reportedly only sold 5,000 units and Samsung was said to have had even lower sales than Acer, according to sources from the PC industry. However, Acer has declined to comment.
But looks like it's fashionable here to rail only on MS' failures and not any other company's.
You do realize that Apple makes more than just smartphones, don't you?
... with memory chip prices rising, chips will play a big part in second quarter profits,” said Kim Sung-in, a chip industry analyst at Kiwoom Securities."
You quote the same one article that I was replying too.
And from the article I linked to discussing the Samsung $5 billion: "“(While) 60-70 per cent of (Samsung’s) profit came from handset sales this quarter,
So $3 billion alone from handset sales this quarter.
How much of Apples $6 billion is from handset sales?
Apple don't say. But they do say "The Company sold 17.07 million iPhones in the quarter. Apple sold 11.12 million iPads during the quarter. The Company sold 4.89 million Macs during the quarter. Apple sold 6.62 million iPods."
So less then 50% of the devices sold by Apple were handsets.
Per your article, Samsung = 15% and per my link they made $3 billion. That would mean that Apple made $17 billion on iPhone sales and lost enough money on everything else to bring them down to the $6 billion profit.
I don't believe your article is correct.
Why are people modding this person as a troll? Are Slashdot users that ignorant???
http://www.appleinsider.com/articles/12/03/29/google_earns_80_of_its_mobile_revenue_from_ios_just_20_from_android.html
Here are March 2012 statistics that show how the stores are doing, and notice how 1.3% of apps downloaded and installed on Android devices are paid for!
I would argue that slashdot mod's in this situation are the trolls not the person making the comment! Mod me down I don't care, but let's keep things at facts shall we...
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
Because he's trolling. The OP asked if it was including apps sold in the Google marketplace, which is a fair enough point. The parent responds by disparaging the idea that you can use "sold" to describe apps in the Android Marketplace.
Yes, there's a lot of freeware (or adware) there, but there's plenty of for-dollars apps too - even if they don't dominate the place as much as they do on Apple's App Store.
Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face