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:That's the sound of the bubble bursting.

[Junta]

smart phones really aren't all that different from the PalmPilots we used in the late 1990s

Well, aside from the full color displays, orders of magnitude more storage, memory, speed, resolution, full fledged multi-tasking operating systems with web browsers that can render sites like desktops, weighing less, lasting a lot longer on a charge, actually having internet connectivity, and some other stuff. But other than that, yeah, not that different...

we've actually seen a lot of regression

Whatever the opinion of those things may be, I don't think 'regression' is the right word. Regression would suggest things collapsed and went back the way they were (e.g. people gave up on the concept of 'DE', Gnome devolved into a barely related set of applications, that sort of thing.

desktop environments

I'll agree that Gnome has gone off the reservation without any sign of being out there, and I'm not a fan of Unity or Win8, but Win10 is actually a decent step up in functionality (there are problems around their release management and privacy), KDE has gotten their act back together, and all the other DEs have been true to their mission throughout.

We even saw regression when it comes to programming languages

Again, not so much a regression as it is, if anything, a weird direction. I'd say while Ruby got a whole lot of attention and loudness, I think in practice it really didn't get as pervasive as the talk about ruby got, and even that has pretty well died down. NodeJS does mean JS has surprisingly seen some use beyond the browser, but in practice I don't think that has staying power. Inside the browser, Javascript is better now than it was in the 90s by a long shot, and those still so inclined may use 90s sensibilities in their site design (incidentally, a lot of Chinese websites I've seen stylistically do remind me of the old geocities/angelfire days).

Internet of Things

I think that's all in the name, or rather the lack of direction indicated in the name. It's a lot of companies wishing to manufacture a market from nothing, but without a good specific vision of what might work, so they shotgun crazy ideas that no one asked for nor really want.

Re: The problem with America.

[Archtech]

Just because one side happens to lose a lot of people during war (your 1 in 7 number) doesn't mean the intent of the war was actually to kill everyone.

"After the invasion of the Soviet Union, Hitler expressed his future plans for the Slavs:

        "'As for the ridiculous hundred million Slavs, we will mould the best of them as we see fit, and we will isolate the rest of them in their own pig-styes; and anyone who talks about cherishing the local inhabitants and civilising them, goes straight off into a concentration camp![62]'"

https://en.wikipedia.org/wiki/...

Re:It's even more pronounced in smartphones ...

[TheRaven64]

In other words, your $650 iPhone isn't a $650 phone. It's a $400 phone that Apple is selling to you for $650

Not necessarily true. The Apple figure likely also includes Apple's 30% cut on all apps that are sold over the lifetime of the device. In contrast, when Samsung sells a phone, they get the sale price of the phone. That's also the reason that Apple devices keep getting updates for longer. If a new app doesn't work on an old iPhone, then Apple potentially loses revenue from not making a sale of that app. If a new app doesn't work on an old Samsung phone, then Samsung doesn't lose any revenue and might gain revenue from having the user buy a new Samsung phone.

It's also worth noting that just because Apple can build an iPhone for $400 doesn't mean that anyone else can. Having a huge cash reserve means that Apple often enters into deals with companies where they build the factory for a key part (flash chips, screens) and then get huge discounts on the parts for the first couple of years. They're effectively taking the risk in exchange for lower prices, but there isn't actually much risk because they're going to buy all of the output anyway. For a while, iPod Shuffles were the cheapest way of getting USB flash drives because Apple charged about the same for them as anyone else could buy the flash chips wholesale.