40% of Silicon Valley's Profits (But Not Sales) Came from Apple (siliconvalley.com)

An anonymous reader writes:The San Jose Mercury News reports that last year 40% of Silicon Valley's profits came from one company -- Apple. "The iPhone maker accounted for 28 percent of the Bay Area tech industry's $833 billion in 2015 sales," while "Its profits were a jaw-dropping 40 percent of the region's $133 billion total." Meanwhile, Google's parent company Alphabet racked up $75 billion in sales, representing nearly 57% of the total for all Silicon Valley internet companies, followed by eBay and PayPal.

But while sales grew, internet-company profits fell by 29% as more companies focused on growth. "Profits are nice, sure, but becoming profitable isn't the top priority around here, particularly for younger firms," wrote the newspaper, noting that investors are paying 18 times Facebook's annual sales for its stock. In fact, 29% of Silicon Valley's top companies didn't have sales growth in 2015 (an increase from 17% the previous year), and five of the top 10 companies saw a drop in sales in 2015 (including Intel). "The numbers are telling the story," one analyst tells the newspaper. "There is growth, but it is slowing."
The Mercury News adds that "The question for those with the biggest sales drops is how much time do they have left if the trend continues..."

Comments

Re:50% from tax dodges TANSTAAFL

[__aaclcg7560]

Should I want to hire someone at a PO box in some lax country to assign my income around - it'd be legal for me too.

Actually, Apple's PO box is in Nevada to avoid paying corporate taxes in California and 20 states.

Yet, with a handful of employees in a small office here in Reno, Apple has done something central to its corporate strategy: it has avoided millions of dollars in taxes in California and 20 other states. Apple's headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company's profits, Apple sidesteps state income taxes on some of those gains. California's corporate tax rate is 8.84 percent. Nevada's? Zero.

http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html

Re:Let's call taxation as contribution

[Xabraxas]

No offense but I don't think you know how taxation works. You can't just say well i'm in the 33% tax bracket federally and 10% locally so add those together and that's 43%. Throw in some Medicare and Social Security and that should be about 50% right? Wrong. First you're not paying an effective tax rate of 33% or 10% either because tax rates are only effective on income over the threshold. So say you make $189,301, the minimum amount for the 33% tax bracket, you will pay an effective rate of something like 22%. Just quickly looking at a tax calculator online it looks like California would be a little less than 8% effective rate. So that puts you at 30% without Medicare and Social Security. From the calculator that is about another 5%. So without ANY deductions for anything your effective rate would be about 35%. Considering the wealth of deductions available and your salary it shouldn't be hard to find an accountant that can probably get you under 30% or lower.