Believe what you want, ok? I’ve spent my entire career in the computer industry in one way or another, so I know what happens in the field.
There seems to be a misconception that Apple is selling these devices for less than it costs them to make. Apple doesn't pull Sony/Microsoft console moves with their devices (Xboxs and Playstations are sold at a loss but make back their money via game liscensing). Apple makes a large margin off every device and the actual device cost for them is far lower than the sticker price consumers end up paying.
Oh, good god, another hobbyist who doesn't seem to understand anything about producing consumer products.
There seems to be a misconception that Apple is selling these devices for less than it costs them to make. Apple doesn't pull Sony/Microsoft console moves with their devices (Xboxs and Playstations are sold at a loss but make back their money via game liscensing). Apple makes a large margin off every device and the actual device cost for them is far lower than the sticker price consumers end up paying.
Oh, good god, another hobbyist who doesn't seem to understand anything about producing consumer products.
I see a lot of insults being flung around, but not many numbers. Can you guys bring me up to speed on specifically what Terrius said that was wrong?
Speaking as someone who has worked in that industry, the economics of game consoles work more or less as he's suggesting. The business model for consoles sold by Nintendo, Sony, and Microsoft is based on charging royalties for licensing and distribution of titles for their hardware. Initial profit margins are not that high, and sometimes aren't positive at all. The manufacturers live and die by their attach rate, which is an industry term for the number of games that go out the door with every customer who buys a system.
Apple does not depend on recurring or residual revenue at all, and this does in fact show up in their margins. That's how they bring in 80+% of the sector's profits on 20% of the sales volume. App sales are icing on the cake; the original model for the iPhone didn't even include apps. Make no mistake, Apple brings in plenty of profit even if you never purchase a single app. The console guys would kill to be in their position.
Apple does not depend on recurring or residual revenue at all, and this does in fact show up in their margins. That's how they bring in 80+% of the sector's profits on 20% of the sales volume. App sales are icing on the cake; the original model for the iPhone didn't even include apps.
Apple's business model is completely different. Luxury items (like an iPhone) are not affordable to the masses on purpose. An iPhone is similar to a 5000 dollar wrist watch or hand bag. There is a group of people who simply want to spend more to have something special and Apple is catering to that group. Ofcourse the manufacturers of luxury products are able to have much better profit margins on their products. LVMH (the company owning Louis Vuiton and many other luxury brands) for example is showing similar profit margins when compared to Apple.
Apple does not depend on recurring or residual revenue at all, and this does in fact show up in their margins. That's how they bring in 80+% of the sector's profits on 20% of the sales volume. App sales are icing on the cake; the original model for the iPhone didn't even include apps.
Apple's business model is completely different. Luxury items (like an iPhone) are not affordable to the masses on purpose. An iPhone is similar to a 5000 dollar wrist watch or hand bag. There is a group of people who simply want to spend more to have something special and Apple is catering to that group. Ofcourse the manufacturers of luxury products are able to have much better profit margins on their products. LVMH (the company owning Louis Vuiton and many other luxury brands) for example is showing similar profit margins when compared to Apple.
Apple iPhone is more like Samsung Galaxy than a LVMH handbag.
There seems to be a misconception that Apple is selling these devices for less than it costs them to make. Apple doesn't pull Sony/Microsoft console moves with their devices (Xboxs and Playstations are sold at a loss but make back their money via game liscensing). Apple makes a large margin off every device and the actual device cost for them is far lower than the sticker price consumers end up paying.
Oh, good god, another hobbyist who doesn't seem to understand anything about producing consumer products.
I see a lot of insults being flung around, but not many numbers. Can you guys bring me up to speed on specifically what Terrius said that was wrong?
Speaking as someone who has worked in that industry, the economics of game consoles work more or less as he's suggesting. The business model for consoles sold by Nintendo, Sony, and Microsoft is based on charging royalties for licensing and distribution of titles for their hardware. Initial profit margins are not that high, and sometimes aren't positive at all. The manufacturers live and die by their attach rate, which is an industry term for the number of games that go out the door with every customer who buys a system.
Apple does not depend on recurring or residual revenue at all, and this does in fact show up in their margins. That's how they bring in 80+% of the sector's profits on 20% of the sales volume. App sales are icing on the cake; the original model for the iPhone didn't even include apps. Make no mistake, Apple brings in plenty of profit even if you never purchase a single app. The console guys would kill to be in their position.
Re-read what I put in boldface in Terrius' post.
Teardowns of the $1000 iPhone X showed a BOM of $360 or thereabouts. That margin is not unreasonable; in fact, it's probably too low and I'm sure they'd rather have the BOM below $300. The hobbyists seem to think that the net profit on this phone is $640 when out of that $640 Apple's gotta pay for the overhead, including salaries and benefits for workers, real estate, utilities, all of what's necessary to actually run the business.
I don't see that misconception about Apple's business model to which Terrius refers. Nobody thinks that Apple sells anything at or near a loss.
Re-read what I put in boldface in Terrius' post.
I did. Still don't see where he's wrong, at least not to the extent of warranting an insulting response.
Teardowns of the $1000 iPhone X showed a BOM of $360 or thereabouts. That margin is not unreasonable; in fact, it's probably too low and I'm sure they'd rather have the BOM below $300. The hobbyists seem to think that the net profit on this phone is $640 when out of that $640 Apple's gotta pay for the overhead, including salaries and benefits for workers, real estate, utilities, all of what's necessary to actually run the business.
I don't see that misconception about Apple's business model to which Terrius refers. Nobody thinks that Apple sells anything at or near a loss.
I'm always curious about those BOM estimates. How do the people doing the teardowns know what Apple's line item costs are? Do they just look parts up on DigiKey, or what?
Safe to say the actual BOM costs are (a) lower than even the best-informed guesses, and (b) a closely-guarded secret. Apple has a massive amount of leverage over their vendors, not all of which shows up on a balance sheet.
not all of which shows up on a balance sheet
But what must be the world's biggest cash pile of around
$250b does. Whatever profit they make on a phone, it's a hell of a lot by any standard
Believe what you want, ok? I’ve spent my entire career in the computer industry in one way or another, so I know what happens in the field.
Dunno what you were doing in your computer industry career but based on my past experience working as a warranty repair technician, I can say you have no clue what you are talking about.
a lot by any standard
I heard ice cream business is one of the worst...
Commercial Ice Cream machines generate high-profit margins for the catering and food industry. A good, quality commercial ice cream machine can make an ice cream for as little as 12p versus the average selling price of an ice cream cone at £2.00 and an ice cream dessert which can be anything from £3.95 upwards.
https://www.carpigiani.co.uk/ice-cream-profit/
Ice-cream doesn't sell in the many millions, though, so the operating costs per item are much higher (even though they are no doubt very low, overall, compared to Apple's). That's not to mention that £3.95 - 12p is just little but lower anyway than $1000 - $300
Compared to rent, wages, and taxes, the cost of the ice cream is insignificant
Believe what you want, ok? I’ve spent my entire career in the computer industry in one way or another, so I know what happens in the field.
Dunno what you were doing in your computer industry career but based on my past experience working as a warranty repair technician, I can say you have no clue what you are talking about.
Well, I do. We were probably working in different areas of repair.
Its said CrapApple patented their own screws (pentalobe etc) and screwdrivers so anybody who makes or replaces them violates their intellectual property. And as previously pointed out would be like if an car repair shop changes the tyres on your car then get sued by the car manufacturer or the tyre manufacturer for doing so.
Its said CrapApple patented their own screws (pentalobe etc) and screwdrivers so anybody who makes or replaces them violates their intellectual property. And as previously pointed out would be like if an car repair shop changes the tyres on your car then get sued by the car manufacturer or the tyre manufacturer for doing so.
They’re not patented. Both no-name and top-tier tool companies sell the screwdrivers for them. Replacement screw kits for iPhones existed for a while, but then the screwdrivers became so ubiquitous that now you just get the drivers. (They’re better than Phillips screws anyway, as they behave much like Torx, in that they don’t cam out.)
I wonder what would happen if I were to set up a repair shop named "Louis Rossman Apple Repairs"? He's spent a significant amount of effort building a specific image and brand to drive his business - I'm sure he wouldn't be happy to see someone hijack it. There would be no end to his lawsuits, writing and calling government agencies to report me, demanding seizures and prosecution, cease and desist letters, lawyering, raising a media stink about it, etc. Rightly so.
Its said CrapApple patented their own screws (pentalobe etc) and screwdrivers so anybody who makes or replaces them violates their intellectual property. And as previously pointed out would be like if an car repair shop changes the tyres on your car then get sued by the car manufacturer or the tyre manufacturer for doing so.
They’re not patented. Both no-name and top-tier tool companies sell the screwdrivers for them. Replacement screw kits for iPhones existed for a while, but then the screwdrivers became so ubiquitous that now you just get the drivers. (They’re better than Phillips screws anyway, as they behave much like Torx, in that they don’t cam out.)
Indeed. Wera sell Pentalobes:
https://uk.rs-online.com/web/p/screwdrivers/1230844/Cam out is a big problem. I've seen a lot of top tier stuff in defence sector with Philips and even slot screws turn up shredded when it was new believe it or not.
Pozidriv FTW.
I wonder what would happen if I were to set up a repair shop named "Louis Rossman Apple Repairs"? He's spent a significant amount of effort building a specific image and brand to drive his business - I'm sure he wouldn't be happy to see someone hijack it. There would be no end to his lawsuits, writing and calling government agencies to report me, demanding prosecution, cease and desist letters, lawyering, raising a media stink about it, etc. Rightly so.
A very good point.
I wonder what would happen if I were to set up a repair shop named "Louis Rossman Apple Repairs"? He's spent a significant amount of effort building a specific image and brand to drive his business - I'm sure he wouldn't be happy to see someone hijack it. There would be no end to his lawsuits, writing and calling government agencies to report me, demanding seizures and prosecution, cease and desist letters, lawyering, raising a media stink about it, etc. Rightly so.
If he were to produce and sell items under his own name and someone else would resell those through their own company, I don't think Louis would object.
A very good point.
Disagree.
Rossman is out there imparting his learnings and techniques to everyone for free on YouTube, and even offering 1:1 tutorials. And telling us what materials he uses and where to get them. And re-packaging and re-selling more obscure materials to make it more convenient. To be sure, he is likely making a modest profit, but probably not enough to pay for good healthy smoothie drinks.
This is exactly the opposite of what Apple does. They don't even offer that kind of support to their own repair people. And they actively task their gang of lawyers to go after anyone who dares to try to repair their gold-plated turds. People who support Apple especially in this forum continue to amaze me. Apple not only has the largest nest-egg on the planet (perhaps only second to the Vatican) but they appear to also be #1 in brain-washing.
a lot by any standard
I heard ice cream business is one of the worst...
Commercial Ice Cream machines generate high-profit margins for the catering and food industry. A good, quality commercial ice cream machine can make an ice cream for as little as 12p versus the average selling price of an ice cream cone at £2.00 and an ice cream dessert which can be anything from £3.95 upwards.
https://www.carpigiani.co.uk/ice-cream-profit/
Fun fact! The current governor of Arizona is a guy called Doug Ducey, and prior to running for office, he ran a chain of ice cream parlors that went bankrupt.
That's right -- he couldn't make money selling ice cream in Arizona.
Cam out is a big problem. I've seen a lot of top tier stuff in defence sector with Philips and even slot screws turn up shredded when it was new believe it or not.
Pozidriv FTW.
It boggles the mind that Phillips and slot screws are still used for anything other than perhaps the the tiniest of precision screws. Pozidriv is an improvement, but if it were up to me, everything would be Torx.
Agree with torx for sure.
Just a point with Rossman: he’s a businessman who is marketing his business and his perception of things to support the business. If you think there’s some altruistic point in the YouTube channel existing I think you’re deluded.
He is expert at networking and marketing which I respect him for.
Fun fact! The current governor of Arizona is a guy called Doug Ducey, and prior to running for office, he ran a chain of ice cream parlors that went bankrupt.
That's right -- he couldn't make money selling ice cream in Arizona.
Fun Fact! Cold Stone is doing quite well, even with several shops here in chilly Oregon selling ice cream. You might want to find a more reputable source for your "Fun Facts".
Fun fact! The current governor of Arizona is a guy called Doug Ducey, and prior to running for office, he ran a chain of ice cream parlors that went bankrupt.
That's right -- he couldn't make money selling ice cream in Arizona.
Fun Fact! Cold Stone is doing quite well, even with several shops here in chilly Oregon selling ice cream. You might want to find a more reputable source for your "Fun Facts".
Well, any ice cream market has a baseline demand from weirdos like me who like ice cream year-round. But it doesn’t take a genius to figure out that you’ll sell more, on average, in a hot place.
I've been to them, actually that concept goes back quite a long time, there used to be a place in San Francisco in the 80s that did that cheesecake, icecream, fruit, toppings Benihana of Tokyo like mashup thing.
Man was it super good!