Sometimes just to wrap my head around really large numbers like this, I like to put things in units of aircraft carriers. The US Navy's last finished carrier cost $6.2 billion[1], meaning that $74.6 billion[2] is enough to buy Apple 12 nuclear carriers, a.k.a. a nuclear carrier fleet larger than that of the US Navy.
Of course this is an inaccurate and very silly comparison[3], but at least for me it does give some sense of scale. That is a preposterous number of iPhones.
[2] Yes, I know that number is revenue and not profit. As long as I'm making a silly mental comparison though, why not have more fun by using the bigger number?
[3] Maintaining/staffing carriers is astronomically expensive, $74.6 billion is actually only enough for 12 empty carrier-shaped hunks of steel.
"Sometimes just to wrap my head around really large numbers like this..."
Personally I like to divide profits and revenues by the number of employees. They have 98 000 employees so they generated revenues of $761 000 and net profits of $184 000 per employee in Q4 2014.
Think about this: if you work for Apple, on average you helped the company generate $0.76 million dollars in sales in the last 3 months.
Edit: @smackfu: I do not think it is weird to consider these metrics. They show what Apple, as a business entity taking its own decisions, manage to extract from their suppliers (expenses) and customers (revenues).
When it comes to realizing what a billion dollars is like, i always fall back on a streamer who recently used notepad to demonstrate a billion dollars. Some not safe for work language but it really explains the sheer immenseness of this value.
Let alone the fact there are streamers who have received tens of thousands of dollars. In this case there really is a very rich person in the middle east who has given tens of thousands to streamers.
I prefer multiples of the Apollo program when discussing Apple's finances. In 1973, NASA reported to Congress that the entire Apollo program cost $25.4 billion ($131.4 billion in 2013). It's useful when quantifying Apple's cash on hand, which is currently > 1x Apollo.
With the quarterly revenue, they could probably reenact Apollo 11, since each launch was ~$350 million pre-inflation. If you're only doing one, a lot cheaper.
Picture it this way: Net income of $18 billion over 12 weeks. That's $1.5 billion in net profit per week. $214 million per day. Absolutely mind blowing.
Buying aircraft carriers is the easy part. Maintaining and staffing them is the hard part but it's a nice unit to use right next to libraries of congress and stationwagons full of tapes.
>is enough to buy Apple 12 nuclear carriers, a.k.a. a nuclear carrier fleet larger than that of the US Navy.
this is why i'm sure that even in the case of military conflict between China and US, the container ships will continue bringing iPhones from Foxconn factories in China into US stores :)
I think that might be a very misleading way to think about it. Sure, maybe Apple could buy 12 nuclear carriers (Although I think inflation may have changed that number a bit. [Also, your $6.2 billion figure is apparently sourced from Fox News[1][2][3], which (of course) doesn't cite a direct source for that claim, only an author credit to Associated Press[4]]), but assuming they did, all they have is 12 huge hunks of metal that they need to store somewhere.
Oh, were you thinking of a fleet of operational carriers that can deploy world-wide dozens of the most highly armed and agile vehicles within 14 days?
Maybe you were just thinking of putting those carriers out on display in the southern bay? I don't know, maybe.
But, if you were thinking about the (apparent) price paid for what the US actually bought (what your numbers are supposedly based on), you need to include the ongoing costs for operating and maintaining such a fleet. According to your sources (Wikipedia), the US Navy had a $171.x billion budget in 2010[5][6][7][8] (according to the same source, this is now $147.69 billion for 2015). I zoomed around the infographic more and found that Operations & Maintenance run $40.xxx billion this year. Sure, you can drop it down some to get rid of the non-carrier vessel maintenance, but this is the limit of the graphics breakdown of the budget. There's another $3x.xxx billion in there (pan north a bit) for "personnel" costs. We'll be generous and say that[$7x.xxx billion]'s an upper limit on the annual cost to run the carriers as you are likely imaging. If Apple keeps it up, they will be able to pay for the first year's costs before next quarter's earnings.
But then when no one else is making decent laptops this is what happens. If anything the gap has grown thanks to Windows 8. I'm not a fan of Yosemite by any stretch, but it is very much the least bad of the available options.
And on mobile, iOS is very clearly in for the long haul now. There was a time a couple of years ago when Android looked like it might gain enough momentum to sweep them away, but it now looks like the iOS market share in developed markets is going to remain fairly solid.
I can't be the only one that has noticed the rise of the Mac-based business but all running on Office 365. It seems to be the new default.
This is pretty insane, I think $18 billion in quarterly profit is the largest ever for any corporations. Also the revenue from iPhone business alone now exceeds Microsoft and Google combined.
Introducing a larger device was exactly the right move it seems …
I wonder how that interacts with their iPad business (which isn’t even just stagnant, it’s shrinking). Maybe it’s one of the reasons why the iPad really didn’t do this well this quarter? Not that it really matters all that much, though, if the iPhone 6 Plus is eating (part) of the iPad pie. Better that than a competitor.
Not sure that's true just yet, but it is close. Apple's December quarter tends to be particularly blowout, sales will fall by 30% to 40% by the June quarter.
Microsoft and Google will combine for $160x billion in sales this nearest fiscal year. The iPhone for the same fiscal year will generate approximately $150 to $170 billion depending on how the year goes.
Edit: What's with the stream of downvotes? What I said is accurate.
Saudi Aramco is probably the largest but since they aren't publicly traded, we don't really know. Estimates put their annual profit at ~$180 billion, so their quarterly revenue would be ~2.5x Apple's.
Remember, Apple needs to target the low end to succeed in China. They need to put out the crappiest, cheapest phone they possibly can otherwise Samsung and Xiaomi will eat their lunch.
Edit: Obvious sarcasm is apparently not obvious enough.
Does Apple care about beating crappy Samsungs in market share? Probably not. There will always be a market for low end/ cheap/ burner phones. There's little room for margins, and those customers don't buy into the ecosystem as much. Comparing ecosystem revenue per user, Apple's doing fine. They sell a top-end phone to people that will pay a premium, and continue to buy apps and media. It's kind of like telling BMW that they need to compete with Kia.
Sure, more market share would be nice, but it's not necessary. If iPhone's are seen as a luxury item/ status symbol, then there's little advertising needed. Plus, Apple could still sell iPhone 4s and 5s to compete with lower end. (I think)
I know you said sarcasm, but Apple is selling the last gen iphones at a competitive price against Samsung mid range in India.
For example: the iPhone 4S, 5c and 5s are 17,500 and 23,000 37500 Indian Rupees respectively. Compare that to the Galaxy S4 at ~26000 grand 2 at 17000, galaxy note 3 at 34000.
Atleast in India, the last gen Apple phones seem to be priced competitively with the last gen Samsung phones. This is just comparing the lowest models, and not getting into the specs, ofcourse.
They don't seem to be doing too badly in China. (Armchair opinion but: I think devaluing their brand in China would be the worst thing they could do.)
"74.5 million iPhones, 46% growth over last year. Unit sales up 44% in US, up 97% in BRIC countries. Sales doubled yoy in China, Brazil and Singapore."
and
"Performance of Greater China was particularly impressive with revenue up 70%."
Apple doesn't need to target the low end. They seem to be doing just fine, making the largest quarterly profit in history by not indulging in a race to bottom in search of market share.
This is about revenue, but every time I see Apple's financial statements, I remember that Apple (as of June 2014) has 160 billion dollars in cash. 2 years of _revenue_ (not operating expenses, mind you, but quite a bit more). I think Bill Gates was all about having enough cash to run the company without a single sale for a year, but apparently they have a 20% profit margin, so we're looking at almost 30 months where they could continue to spend everything, not get a single dime, and be "fine".
If that's not an example of the absolute failure of trickle-down economics, I don't know what is.
Does the "tax rate of 26.3 percent" mentioned refer to how much tax Apple actually paid, or its notional tax rate?
For example, here in Australia, Apple had $6 billion revenue and paid $80 million tax. Assuming the margins are at least as good as the US, the profit would be $2.4 billion, so Apple's actual tax rate in Australia is 3.4%. Compare that with the theoretical Australian corporate tax rate of 30%, which would put Apple's tax bill closer to $700 million.
Having bought the iPhone 6, I have to say I miss the size of iPhone 5, being able to use it with one hand, being less slippery, and the sturdy design. Many months passed by and I still miss it - this has never happened before.
I won't be buying the Apple Watch because I have a real watch. And I simply don't see the point in having a watch that does a fraction of what my phone already does.
I have just bought some PUT options on AAPL, because I don't see the revenue driver for the future. There's no need for a more powerful or slimmer phone at this stage, any advancement will be increasingly marginal. All the possible sizes are already out. Desperate people have got their hands on the latest gadget. What's next for Apple? How can they continue to grow phone sales at this rate? I simply don't see it, nor do I see another product category being as big as the truly personal computer that is the smartphone.
Ah, things were better back in my day! The kids now, they don't know what they've got. GET OFF MY LAWN! ;-)
But seriously. I sometimes find myself slipping in to this sort of mindset; I sometimes even long for my iPhone 5 for exactly the same reasons as you. But this is the inexorable march of progress, right? As if the iPhone 6 we have today is the pinnacle of smartphone design. We'll look back in ten years -- twenty years, fifty years -- when our phones are vanishingly thin, when we lick them and stick them to our arms, or when they just are our arms, and -- no offence -- your comment will look a little ridiculous.
And this is why Apple does what it does; it must be at the forefront, it must be the one at the bleeding edge. If it isn't, it dies.
And if it isn't, well, how boring would everything be if the iPhone 6 was "the end". That future sounds really boring.
> nor do I see another product category being as big as the truly personal computer that is the smartphone
I think these sectors will merge with solutions like Ubuntu Touch (though probably a MS/iOS/android version) creating a bigger smartphone sector but smaller overall combined sector.
Also re: apple sales growth, they just have to maintain market-share as the developing world becomes wealthier the volume growth is there. The big risk is margin. As the $200 almost flagship phones proliferate its increasing difficult to justify spending $800 on a phone. At some point Apple will have to take a smaller premium.
I think these results are amazing. Kudos to Apple. And now I'm going to be "that guy" on HN. iPad is off 18%. So now Apple really is living and dying by a single product? I mean it's amazing how well they are doing with "just" one product but technology tastes seem so fickle that it's an interesting predicament to be in.
Wow $74.6 Billion Revenue and $18 Billion profit on 74.5M iPhones in a quarter is nuts.
Apple also mentioned in the Conference call that the volatile exchange rate also hurt sales numbers by 4% (vs a constant exchange rate) which they're more susceptible to now that over 65% of their sales are outside of the US.
Obviously larger screen iPhones helped a lot. Samsung supposedly copied Apple with rounded edges. And Apple copied Samsung with phablet sized device. I still remember reading the negative reviews when Samsung first came out with phablets.
Where would I be able to see app revenue alone? On the Summary Data PDF it says services did 4.8B and that includes "revenue from the iTunes Store, the App Store, the Mac App Store, the iBooks Store, AppleCare, Apple Pay, licensing and other service". Is it possible to see only App Store revenue?
[+] [-] ykl|11 years ago|reply
Of course this is an inaccurate and very silly comparison[3], but at least for me it does give some sense of scale. That is a preposterous number of iPhones.
[1]http://en.wikipedia.org/wiki/USS_George_H.W._Bush_(CVN-77)
[2] Yes, I know that number is revenue and not profit. As long as I'm making a silly mental comparison though, why not have more fun by using the bigger number?
[3] Maintaining/staffing carriers is astronomically expensive, $74.6 billion is actually only enough for 12 empty carrier-shaped hunks of steel.
[+] [-] mrb|11 years ago|reply
Personally I like to divide profits and revenues by the number of employees. They have 98 000 employees so they generated revenues of $761 000 and net profits of $184 000 per employee in Q4 2014.
Think about this: if you work for Apple, on average you helped the company generate $0.76 million dollars in sales in the last 3 months.
Edit: @smackfu: I do not think it is weird to consider these metrics. They show what Apple, as a business entity taking its own decisions, manage to extract from their suppliers (expenses) and customers (revenues).
[+] [-] Shivetya|11 years ago|reply
Let alone the fact there are streamers who have received tens of thousands of dollars. In this case there really is a very rich person in the middle east who has given tens of thousands to streamers.
http://youtu.be/0J6BQDKiYyM
[+] [-] mchanson|11 years ago|reply
7.125 billion people 74.5 million iphones
74,500,000 / 7,125,000,000 = 1.05%
[+] [-] jsmthrowaway|11 years ago|reply
With the quarterly revenue, they could probably reenact Apollo 11, since each launch was ~$350 million pre-inflation. If you're only doing one, a lot cheaper.
[+] [-] downandout|11 years ago|reply
[+] [-] Cookingboy|11 years ago|reply
Then they can REALLY sink their competitions ;)
[+] [-] jacquesm|11 years ago|reply
[+] [-] T-zex|11 years ago|reply
[1] http://en.wikipedia.org/wiki/Large_Hadron_Collider#Cost
[+] [-] Diederich|11 years ago|reply
Just shy of half a trillion dollars in yearly revenue, which generated 15.4 billion in profit.
That's $1.3B revenue per day, or $55M revenue per hour, $920K/minute.
A million dollars of revenue, every minute.
Compared to nominal GDP, Wal-Mart Stores, Inc. is larger than Taiwan, Austria and Thailand.
Granted, that's revenue, which is 'easy' compared to profits!
How can we not start looking at some of these organizations less as companies, and more as countries?
[+] [-] trhway|11 years ago|reply
this is why i'm sure that even in the case of military conflict between China and US, the container ships will continue bringing iPhones from Foxconn factories in China into US stores :)
[+] [-] rgejman|11 years ago|reply
[+] [-] rsp1984|11 years ago|reply
[+] [-] MaysonL|11 years ago|reply
[+] [-] jsprogrammer|11 years ago|reply
Oh, were you thinking of a fleet of operational carriers that can deploy world-wide dozens of the most highly armed and agile vehicles within 14 days?
Maybe you were just thinking of putting those carriers out on display in the southern bay? I don't know, maybe.
But, if you were thinking about the (apparent) price paid for what the US actually bought (what your numbers are supposedly based on), you need to include the ongoing costs for operating and maintaining such a fleet. According to your sources (Wikipedia), the US Navy had a $171.x billion budget in 2010[5][6][7][8] (according to the same source, this is now $147.69 billion for 2015). I zoomed around the infographic more and found that Operations & Maintenance run $40.xxx billion this year. Sure, you can drop it down some to get rid of the non-carrier vessel maintenance, but this is the limit of the graphics breakdown of the budget. There's another $3x.xxx billion in there (pan north a bit) for "personnel" costs. We'll be generous and say that[$7x.xxx billion]'s an upper limit on the annual cost to run the carriers as you are likely imaging. If Apple keeps it up, they will be able to pay for the first year's costs before next quarter's earnings.
[1] http://en.wikipedia.org/wiki/USS_George_H.W._Bush_(CVN-77)#c... [2] http://www.webcitation.org/6DBeItQye [3] http://www.foxnews.com/story/2009/01/10/aircraft-carrier-nam... [4] http://www.ap.org
[5] http://en.wikipedia.org/wiki/United_States_Armed_Forces#cite... [6] http://www.wallstats.com/deathandtaxes/ [7] http://www.timeplots.com/ [8] http://www.timeplots.com/collections/catalog/products/death-...
[+] [-] richcuteguy34|11 years ago|reply
[deleted]
[+] [-] Mistake_not|11 years ago|reply
[deleted]
[+] [-] korzun|11 years ago|reply
You can't buy a single operational carrier for that price.
[+] [-] fidotron|11 years ago|reply
But then when no one else is making decent laptops this is what happens. If anything the gap has grown thanks to Windows 8. I'm not a fan of Yosemite by any stretch, but it is very much the least bad of the available options.
And on mobile, iOS is very clearly in for the long haul now. There was a time a couple of years ago when Android looked like it might gain enough momentum to sweep them away, but it now looks like the iOS market share in developed markets is going to remain fairly solid.
I can't be the only one that has noticed the rise of the Mac-based business but all running on Office 365. It seems to be the new default.
[+] [-] Cookingboy|11 years ago|reply
[+] [-] aaronbrethorst|11 years ago|reply
[+] [-] arrrg|11 years ago|reply
I wonder how that interacts with their iPad business (which isn’t even just stagnant, it’s shrinking). Maybe it’s one of the reasons why the iPad really didn’t do this well this quarter? Not that it really matters all that much, though, if the iPhone 6 Plus is eating (part) of the iPad pie. Better that than a competitor.
[+] [-] adventured|11 years ago|reply
Microsoft and Google will combine for $160x billion in sales this nearest fiscal year. The iPhone for the same fiscal year will generate approximately $150 to $170 billion depending on how the year goes.
Edit: What's with the stream of downvotes? What I said is accurate.
[+] [-] saryant|11 years ago|reply
[+] [-] aaronbrethorst|11 years ago|reply
* Apple Watch is coming in April
* 39.9% gross margins
* 1 billion iOS devices sold since 2007
* 97% csat for iPhone as measured by Changewave
* Mac revenue was $6.9 billion
[+] [-] freshyill|11 years ago|reply
Edit: Obvious sarcasm is apparently not obvious enough.
[+] [-] loganu|11 years ago|reply
Sure, more market share would be nice, but it's not necessary. If iPhone's are seen as a luxury item/ status symbol, then there's little advertising needed. Plus, Apple could still sell iPhone 4s and 5s to compete with lower end. (I think)
[+] [-] Alterlife|11 years ago|reply
For example: the iPhone 4S, 5c and 5s are 17,500 and 23,000 37500 Indian Rupees respectively. Compare that to the Galaxy S4 at ~26000 grand 2 at 17000, galaxy note 3 at 34000.
Atleast in India, the last gen Apple phones seem to be priced competitively with the last gen Samsung phones. This is just comparing the lowest models, and not getting into the specs, ofcourse.
[+] [-] Osmium|11 years ago|reply
"74.5 million iPhones, 46% growth over last year. Unit sales up 44% in US, up 97% in BRIC countries. Sales doubled yoy in China, Brazil and Singapore."
and
"Performance of Greater China was particularly impressive with revenue up 70%."
[+] [-] sidko|11 years ago|reply
[+] [-] xj9|11 years ago|reply
[+] [-] capkutay|11 years ago|reply
[+] [-] rtpg|11 years ago|reply
If that's not an example of the absolute failure of trickle-down economics, I don't know what is.
[+] [-] femto|11 years ago|reply
For example, here in Australia, Apple had $6 billion revenue and paid $80 million tax. Assuming the margins are at least as good as the US, the profit would be $2.4 billion, so Apple's actual tax rate in Australia is 3.4%. Compare that with the theoretical Australian corporate tax rate of 30%, which would put Apple's tax bill closer to $700 million.
http://www.smh.com.au/business/apples-803-million-australian...
[+] [-] akrymski|11 years ago|reply
I won't be buying the Apple Watch because I have a real watch. And I simply don't see the point in having a watch that does a fraction of what my phone already does.
I have just bought some PUT options on AAPL, because I don't see the revenue driver for the future. There's no need for a more powerful or slimmer phone at this stage, any advancement will be increasingly marginal. All the possible sizes are already out. Desperate people have got their hands on the latest gadget. What's next for Apple? How can they continue to grow phone sales at this rate? I simply don't see it, nor do I see another product category being as big as the truly personal computer that is the smartphone.
[+] [-] jen729w|11 years ago|reply
But seriously. I sometimes find myself slipping in to this sort of mindset; I sometimes even long for my iPhone 5 for exactly the same reasons as you. But this is the inexorable march of progress, right? As if the iPhone 6 we have today is the pinnacle of smartphone design. We'll look back in ten years -- twenty years, fifty years -- when our phones are vanishingly thin, when we lick them and stick them to our arms, or when they just are our arms, and -- no offence -- your comment will look a little ridiculous.
And this is why Apple does what it does; it must be at the forefront, it must be the one at the bleeding edge. If it isn't, it dies.
And if it isn't, well, how boring would everything be if the iPhone 6 was "the end". That future sounds really boring.
[+] [-] Gustomaximus|11 years ago|reply
I think these sectors will merge with solutions like Ubuntu Touch (though probably a MS/iOS/android version) creating a bigger smartphone sector but smaller overall combined sector.
Also re: apple sales growth, they just have to maintain market-share as the developing world becomes wealthier the volume growth is there. The big risk is margin. As the $200 almost flagship phones proliferate its increasing difficult to justify spending $800 on a phone. At some point Apple will have to take a smaller premium.
[+] [-] oliyoung|11 years ago|reply
[+] [-] jusben1369|11 years ago|reply
[+] [-] mythz|11 years ago|reply
Apple also mentioned in the Conference call that the volatile exchange rate also hurt sales numbers by 4% (vs a constant exchange rate) which they're more susceptible to now that over 65% of their sales are outside of the US.
[+] [-] dba7dba|11 years ago|reply
I wonder who will copy what next...
[+] [-] wclax04|11 years ago|reply
[+] [-] unknown|11 years ago|reply
[deleted]
[+] [-] MaysonL|11 years ago|reply
[+] [-] espitia|11 years ago|reply
[+] [-] PhoenixWright|11 years ago|reply
[+] [-] gchokov|11 years ago|reply
[+] [-] jacquesm|11 years ago|reply
Apple is doing extremely well on the margins but they have actually lost ground when going by the numbers (~30% market share now vs ~70% android).
[+] [-] tuananh|11 years ago|reply
>[email protected] >[email protected]
Does Apple forcing everyone to use name only (prohibit use of dash and underscore? ) and keep addning number if the username is used?
[+] [-] georgespencer|11 years ago|reply