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

The problem with America.

[Anonymous Coward]

Most of the profits are parked overseas, and the ones that are here aren't taxed very much.
Most of the work is done by Chinese slave labor and so has no contribution to the US economy.
I submit that the United States would be better off if Apple simply did not exist. (Or at least, not any worse.)

Re:The problem with America.

[gtall]

Yep, you are right. The U.S. should cede control of the world to those nice Russians and Chinese. They'll have your best interests at heart. While we're at it, let's promote the welfare of Islamists everywhere, they really, really like the West.

Re:The problem with America.

[Anonymous Coward]

The Islamists wouldn't even exist without the help of the US. Accept that your country built these monsters for their own benefit.

And other countries can defend themselves against the Russians and the Chinese. These aren't times of war and the US does not have the best interest of other countries in mind. They do this to keep the wealth flowing to the US government. You blame Apple for producing a successful product. What has your government produced but death and struggle?

Re:The problem with America.

[Archtech]

Yep, you are right. The U.S. should cede control of the world to those nice Russians and Chinese. They'll have your best interests at heart.

I am pleased (and rather amused) to note that you begin, even if unintentionally, by admitting that the USA has indeed seized control of the world. Next you allege, without the slightest shred of supporting evidence, that if the USA relinquished control of the world, the Russians and Chinese would seize it. But when did they ever do anything like that before? (Disclaimer: I am a historian, so I tend to think about the historical record when I see such allegations).

Perhaps you will talk about the Warsaw Pact, the Iron Curtain, the "Domino Theory", the Chinese annexation of Tibet, and so on. Well, the Iron Curtain and the Warsaw Pact arose after a European nation (Germany), with what the Soviets believed to be support from the USA and Britain, launched a war of extermination against all Slavs in 1941. That attack was repelled, with the deaths of one in seven of the people of the USSR - men, women and children. (The equivalent number of deaths for the USA today would be about 45 million - that is about 15,000 times as many as those who died on 9/11). Reasoning, logically enough, that the German attack had nearly succeeded - German soldiers actually reached the Moscow tramlines before winter and fresh Soviet armies stabilized the front - the Soviet leaders decided to push the "starting line" for any future war of extermination by the West back as far as they could. That was the Iron Curtain. Any nation that has lost one-seventh of its entire population to a vicious attack will be qualified to argue whether this strategy was justified. Otherwise, not so much.

The "Domino Theory" was the ridiculous thesis that, if "the communists" managed to take over any one nation, it would be followed by all the surrounding nations. Eventually the USA would stand alone as the last place where billionaires could feast while the poor starved in gutters. To avert this horrible threat, the billionaires decreed that all "communist takeovers" must be fought to the last local soldier. This was the story in Vietnam. After a horrible war that killed over 3 million people, most of them innocent of any wrongdoing, American forces were driven from Vietnam in headlong, ignominious defeat. How many surrounding nations "went communist" as a result? Not a single one. (Although a hideous tyranny was set up in Cambodia as a direct result of the US intervention).

While the USSR existed, it was at least possible to argue that it had an ideology that it might try to spread by force. Since 1991, of course, the USSR has not existed. The USSR, and then Russia, agreed with no argument at all to give up control of East Germany, Poland, Hungary, Czechoslovakia, Rumania, Bulgaria, Latvia, Lithuania and Estonia, and even Belarus and Ukraine (which had been integral parts of Russia for much longer than the USA has existed). Still, Russia has a land area twice that of the USA, China or Canada - much of which is under-utilized or even completely unused. Its population is quite small for such a vast territory, so the last thing it needs is more territory. All Russia wants is to be left alone to develop quietly in peace.

China is just as peacefully inclined, although it went through a near-death experience every bit as bad as the Soviet one, when it was invaded by Japan in 1937-45. Unlike Russia, it did not have the possibility of "pushing back the starting line", but it does have every intention of keeping its borders intact and preventing any foreign invasion or interference.

The leaders of China and Russia have repeatedly explained, in public and with a wealth of detail, that they prefer a multi-polar world in which different peoples, nations, religions, cultures and economic systems coexist peacefully and interact willingly through trade and other forms of exchange. They do not seek to take over other people's countries and run them exclusively for their own benefi

Re:This is why America needs President Trump.

[__aaclcg7560]

We typically see negative knee-jerk reactions here when the idea of President Trump is brought up, but it turns out that President Trump has exactly what the United States of America needs in a leader today.

Charles Koch is on record that Hillary Clinton might be preferable than any of the Republican candidates for president.

http://www.politico.com/story/2016/04/charles-koch-hillary-clinton-republican-white-house-222349

Re:50% from tax dodges TANSTAAFL

[__aaclcg7560]

The point is, the normal taxpayer can't afford them - it's not gain at the margin for the taxes a little guy saves, but is for the big guys.

The little guy can do a variation of this. For example, start a Nevada corporation and open a corporate brokerage account (day trade or load up dividend-paying stocks) or own rental properties. Once the corporation makes a significant amount of money each year, you can draw a salary and open a qualified retirement to put away $54,000 each year (a combination of salary contributions plus corporate matching). Do that for a few decades, you will have a retirement account that will greatly exceed whatever you can put into an IRA/401K.

That's the real problem in my mind.

You need to change your thinking. The tax laws will never change to favor the small guy, so why not use them to your own advantage? The trick comes from converting earned income (taxed at highest rate) to portfolio (stocks) and/or passive (real estate) income (taxed at a lower rate). When portfolio/passive income exceeds earned income, you can stop working for someone else and work for yourself.