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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..."
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..."
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.)
... where Apple has 92% of the all global smartphone profits.
Finally, we're hearing the start of the so-called "Web 2.0" bubble bursting. And you know what? This is probably the best thing that could happen to society at large.
What has the "Web 2.0" bubble brought us? Not much of value!
Computers today aren't that much different than computers of a decade ago, in terms of hardware and software. Even smart phones really aren't all that different from the PalmPilots we used in the late 1990s. We've seen little innovation, really. In fact, we've actually seen a lot of regression. So much software, from Linux distributions (thanks to systemd, PulseAudio and NetworkManager), desktop environments (GNOME 3, Windows 8 and 10), web browsers (Firefox, Chrome) are worse than what we had before this bubble started. We even saw regression when it comes to programming languages, with absolutely terrible languages like JavaScript and Ruby becoming widely used, and debacles like Rust created.
Where we have seen innovation, it has not been positive. For example, advertising has become so much more pervasive and invasive. Along with this has been far more pervasive and invasive data collection. This is culminating with the rise of the "Internet of Things", which is basically all about giving Internet access to every single device in one's home so that advertisers can collect far more personal and private information about consumers than the advertisers could hope to do before.
Social media has been awful to us. It's pretty much just an extension of advertising, except it isn't limited to commercial entities. We've seen it used for nefarious political means, including but not limited to forcing the flawed concept of "social justice" (which in reality involves bias, racism, intolerance, injustice and bullying) upon our societies.
Luckily, we're now coming to the end of this bubble. We are beginning to hear it pop. Let's hope that the bursting is swift, because that's exactly what our society needs at this point.
People thrive when government does little, as Thomas Jefferson and George Washington told us. When government handles roads and military defense, society thrives; when government bleeds people by taxation and regulation, life becomes frustrating and boring like in the Soviet Union, although not quite as bad yet. With our technology, we should be working four hours a day and spending the rest on meaningful activities (inb4 the usual bragging about "meaningful jobs": you're just tools). Instead, we work more than ever. As an antiwork conservative, I cannot expect much support from the rest on the Right side, but a few are starting to wake up. Real life is not your career, your car, your house or your shopping list. Real life is out there, and it is not what humans expect at first.
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
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.
Time makes more converts than reason
Tell me which of Trump's proposal's are good and we can debate that. I have no faith someone can have a coherent proposal about something they know nothing about and it has been demonstrated time and again in interviews that he doesn't know anything about the economy, foreign policy, or even math for that matter. Just look at his claim that he will ELIMINATE the debt in 8 years. Laughable. The guy is a fucking joke.
Time makes more converts than reason
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
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.
All these big companies are playing by the same rules. You'll have to find another reason to rationalize why some of them are way more successful than others.
Given that I am English it's certainly my native language.
Now, what's so special about roads and military? Why should they be collectivised and not police, fire brigade, education and health?
"Over" seems to be your particular extremist priorities and not any kind of arguable threshold.
The idea that if government controls more than roads and military, "things go bad" is complete nonsense, that isn't demonstrated by the real world. Amongst the happiest nations in the world are the Scandinavian countries that have relatively high taxation, and socialise huge amounts of social services.