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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 $2.8 million and 0.515% of Android revenues on an ongoing basis. His assumption is that those numbers represent Google's revenue from Android to date. 'If this is the case,' writes Dediu, 'We have a significant breakthrough in understanding the economics of Android and the overall mobile platform strategy of Google.' Of course profitability is not the only reason Google is in the mobile phone business. 'P&L considerations were not the only (or even at all) factors in investment for Google. Having a hedge against hegemony of potential rivals, having a means to learn and develop new business and having a role in defining the post-PC computing paradigm are all probably bigger considerations than profitability,' writes Dediu. 'My take is that [Android] is not a bad business. But it's also not a great one.'"
Do "Android revenues" include advertising, e.g. ads shown in apps?
Still, Apple does get to pick the cream of the crop.
The whole idea of Android is provide Google with access to a market from which it would otherwise be excluded. So what Google makes on Android is still a whole lot more than what it makes on iPhones.
With Android now looking to expand across the whole computer spectrum including, shock horror, the desktop. That gives Google access to the whole market, regardless of the efforts of Apple and of course M$.
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.
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?
Google apparently earns 80% of its mobile revenue from iOS devices and 20% from Androids devices.
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
Which was made by Samsung. This will change with the Motorola acquisition...
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.
Let me rephrase...
Google do not manufacture devices. The moment an iPhone is sold Apple makes a good chunk of profit, when an Android phone is sold Google gets nothing.
No they don't. That's a Samung phone. Google don't manufacture it, contract it for manufacturing, handle it nor sell it. The only thing they make on it is the standard licensing fees for Android that they make from any other phone that carries the Android trademark.
Google just used it as a flagship for a particular version of Android. That's why it' singled out on the Google site.
That was my thought. They are comparing ( sorry about this ) apples to oranges..
---- Booth was a patriot ----
I was going to moderate, but that's the second time you've posted flat-out wrong information on this thread...
The Google Nexus carries the Google name, because Google commissioned it, and set specific guidelines for how it's to be used/sold. It was manufactured by Samsung, and most of the profit goes to Samsung for it, but there are certain rules governing how that particular phone can be sold, and those are set by Google.
For one, the Nexus can't be sold with a network lock. It's sold as a "reference" device, and is unlocked to any network.
For two, it is not allowed to have any manufacturer-specific branding, and is sold with a stock unmodified Android.
There's other differences, but those are the big ones.
Considering that microsoft makes $5 per device on andriod google is getting screwed.
Also how is apple doubling their money on devices? Carrier subsidies shouldnt be paying that much to the manufactuerer.
i thought once I was found, but it was only a dream.
There have been lots of articles on that. It depends what you want to include. Apple spends a lot more on advertising because the manufacturers generally cobrand with the carriers. Apple spends much more on development. Apple is starting to subsidize manufacturers of parts, especially memory. Samsung uses its own manufacturing facilities and Motorola its own chips. Apple owns its own stores. Apple runs their warranty program at a loss while the Android carriers don't. Apple has crossover marketing opportunities that the other manufacturers don't so even comparing advertising costs is complex.
So it really isn't if you will excuse the pun, an apples to apples comparison. In general though, Apple's margins are higher. Gross margins of about 50% vs. 60% on high end phones. On lower end phones the margins fall for both of them. For example on the 3G Apple isn't just giving up the $200 in price but another $50+ (over 2 years) in subsidy. They aren't saving nearly $250 on cheaper parts and lower support costs. And this drives margins down to around 20-30%.
On the other hand Android OS costs are much higher than Apple's. Android allows for much greater carrier customization and much greater device diversity. On the upside Android costs are mostly born by the carriers as a way to upsell other features.
If you are interested Google, there is a lot out there on this. But easy comparisons are facile.
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.
You are splitting hairs. They make money on Nexus sales, but Nexus sales makes up a fraction of the overall Android market. Compare this with Apple, that makes 100% of iPhones, and you see that one is an ad company while the other is a hardware company.
It stands to reason that Apple would make more from the manufacturing of the phone.
An important change for education.
Apple is a hardware company, and a services company. These are not mutually exclusive options. If they can make profit from their device at sale and then make even more profit from it after-sale, why wouldn't they? Google doesn't make phones (Except a vanishingly small number of Nexuses), so they have to settle for the services and some licencing money from the real manufacturers. They do have the advantage of much greater experience in targetted advertising.
Yep. I totally agree. It just isn't pertinent to the point I was making.
An important change for education.
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.
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.
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.
no.. the 575 is supposedly the profit portion. you see, 800 is the revenue number.
but it's just one part of this clusterfuck of a "story".
world was created 5 seconds before this post as it is.