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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.'"

3 of 366 comments (clear)

  1. Re:$575? Seriously? by Zaldarr · · Score: 0, Troll

    Not to mention they gouge the vast majority of the profit- and they can do this because people want a bit of fruit on the back of their devices so they can say that they're better than you.

    --
    I write professional videogame reviews! http://www.digitallydownloaded.net/
  2. Conclusions. by Anonymous Coward · · Score: 0, Troll

    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.

  3. Re:Ads included? by Cederic · · Score: 0, Troll

    So you modded him down based on your own bigoted viewpoint.

    No Android phone does what the iPhones do, even if individually, they have some specs that are better.

    No iPhone does what my Android phone does. Shit, no iPhone does what my previous non-android non-iOS phone did. Even the ones that had a better spec.

    No tablet of vaguely comparable specs is cooler, neither are most laptops.

    "cool" is very very subjective. Apple products are to me about as 'uncool' as you can get - mass market, over promoted, horribly crippled and covered in a crass logo. If that's cool, count me out.

    No single Andriod sells 20% of iPhone sales, indicating that even in the absense of sales spiffs, the hoi poloi know what they like, and it's not specs.

    Yet overall over 50% of smartphones sold in the US are now Andriod. Even in the absence of sales spiffs, the hoi poloi do indeed know what they like, and it isn't the overpriced under-privileged apple advertisement.

    Please, stop using your mod points to confirm your bias and instead post under your real name so we can point out how full of shit you are.