Comment by marcamillion | Hacker News Reader

Comment by marcamillion | Hacker News Reader

For those keeping tracking, that means their growth rates are absolutely mind-blowing.

Revenues, YoY, grew at about 75%. Profits, YoY, grew at about 117%.

Keep in mind this is billions of dollars we are talking about. It's "relatively easy & common" for a "small" company to grow that fast on say revenues up to $400M or even $1B range. But on QUARTERLY numbers of $25B and still be growing that fast...that's...just...mind blowing.

To show how mind-blowing this is, let's do some speculation - what will those numbers look like for the next 4 years (assuming that growth rates remain constant):

Next Year (Y1) - Revenue = $81B, with Profits = $28.34 in Q1.

Year after (Y2) - Revenue = $141.75B, Profits = $61.49B in Q1.

Y3 - Revenue = $248B, Profits = $133B in Q1

Y4 - Revenue = $434B, Profits = $288B in Q1

Before you dismiss these numbers as fantastical, keep in mind a few things.

a) The tablet market is still nascent and is likely to continue exploding.

b) The smartphone market is nowhere near as big as the mobile market - even the mobile market still has room for growth.

c) We haven't even seen other products that will likely come out of the pipeline that could create new categories (iTV anyone?)

d) iCloud was just launched. It's like AWS - but for everybody. Give it some time, but I can guarantee you it will be a major, major source of revenue and profits for them (just like Amazon) in the next few years (more than likely towards the latter part of the next decade).

The truth is, seeing these numbers makes me very skeptical myself, but I would have never imagined that I would see a company as old as Apple, doing $26B in revenues per quarter and still growing at 75%/year.

Regarding point d), specifically around iCloud being a major source of revenue and profits:

[Tim Cook] said iCloud is "not a product, it is a strategy for the next decade."[1]

iPhone and iPad are major sources of revenue for Apple; they are also "products" with a heavy focus to make them "great". iCloud is one of many features that makes Apple products great, but IMHO is not itself a focus for Apple as a revenue generator.

[1] http://www.google.com/hostednews/afp/article/ALeqM5hOAZb_nCI...

"It's like AWS - but for everybody."

what? icloud has exactly zero things in common with AWS.

>exactly zero things?

So it's not a 'data storage service in a remote data center'?

Sure, AWS is made for servers - but the core business is the same. Charge people (AWS charges developers) to store your data in our cloud. Apple charges consumers.

Different demographic, exact service. Btw, iCloud is like AWS because AWS has many services (S3, EC2, etc.). Just like iCloud has 'store all your images and files', and 'match your music via iTunes'. Two services, via the same underlying core product.

It's identical to AWS - except for the target market.

While I appreciate the analogy, it is somewhat flawed.

The only common thing they have is that they both are cloud services, i.e both Amazon and Apple use their remote servers to provide services to their customers.

It's everything else that's different, and it's an important difference. (Keep in mind that any two things are similar for some level of abstraction. E.g apple's and oranges = both fruits. A brown leather sofa and a black hole = both exist in this universe. That does not say much).

For example, iCloud (all it offers) could have been implemented on top of AWS.

AWS could not have been implemented on iCloud.

AWS is like an operating system, iCloud is like a few specific applications.

I will use part of my answer to the comment right above yours:

I prolly shouldn't have used the name 'iCloud' to describe what I meant. What I meant was, Apple has a clear business interest in selling access to a 'cloud digital infrastructure'. At first it was iTunes (they sold that access to the record labels, but consumers subsidized that effort), now they are selling it directly to consumers. They also did it with the App Store, then the Mac App Store (they sold access to third-party developers).

That's three major forays they have done into the 'cloud services' business, but they have not unified the branding - like Amazon has done. Doesn't mean they are not a heavyweight player.

Also, just because they are not competing head to head doesn't mean they aren't competing.

GM made trucks, Yamaha made bikes. They don't compete for the same customer, but they do compete for some customers in some market segments. So that makes them indirect competitors.

Right now, as it stands, there are some customers (technically oriented) that might have rolled their own iCloud solution on AWS - but now they might not because they can use Apple's. Sure, that's a very small % of the market right now...but my point is that at some point - within the next decade I think - Apple will be more direct. It's only inevitable - assuming they want to keep growing as long as they can.

> For example, iCloud (all it offers) could have been implemented on top of AWS.

Not just "could have". It actually IS implemented on AWS. iCloud uses AWS and Windows Azure as its backend.

Source: http://venturebeat.com/2011/09/03/icloud-azure-amazon/

Interesting point. iCloud so far doesn't offer elastic computing, but that difference saide it's essentially the same thing except the developer builds a product and the customer pays for it, with apple essentially covering the developer's back end costs with the fixed cost (30%). The analogy fail when the developer still needs to support an app with separate cloud based services. If apple does extend iCloud to do this stuff then we get the "dream" (simple, fairly thin devices in user pockets, backed by arbitrarily powerful services in the cloud — presumably wrapped in a very simple price model for both users and developers).

    > It's identical to AWS - except for the target market.

It is similar to S3. AWS is way more than just dumb storage.

If anything, iCloud is more like Dropbox for "normal" users. It's more limited than Dropbox in what it stores, but it stores the majority case rather well, including system settings.

In any case, iCloud is most definitely not Apple's AWS.

Well, sure...Apple hasn't rolled out a unifying 'cloud product/strategy' yet...but the pieces are there. iTunes Store is just an application on top of the cloud infrastructure. Then iCloud is another application - that while it doesn't compete directly with AWS it does so indirectly...because of the implicit threat that it's just a matter of time before Apple moves in that direction (if they want to).

I prolly shouldn't have used the name 'iCloud' to describe what I meant. What I meant was, Apple has a clear business interest in selling access to a 'cloud digital infrastructure'. At first it was iTunes (they sold that access to the record labels, but consumers subsidized that effort), now they are selling it directly to consumers. So they have made two major forays into the 'cloud infrastructure monetization' business....which is the same business Amazon is in with AWS. They also did it with the App Store, then the Mac App Store (they sold access to third-party developers). Sure, not in the identical way as Amazon did, but it's not that far off.

It's not that far fetched to see that they will eventually be competing head-to-head with AWS.

> If anything, iCloud is more like Dropbox for "normal" users. It's more limited than Dropbox in what it stores, but it stores the majority case rather well, including system settings.

Well, each is more limited than the other. iCloud provides more stuff (synchronized key value store which can be used from more than one device at a time, etc.) but access to what it stores is more restricted.

iCloud is a service you could build on AWS - not the other way around.

>So it's not a 'data storage service in a remote data center'?

okay, looked at from a naive enough perspective, they have similarities. they both can be described using the buzzword 'cloud', but it doesn't go much beyond that. they do not perform the same task. they do not serve the same market. they do not have a similar interface. one service cannot replace the other. drawing any sort of comparison between the two is completely meaningless to the discussion at hand.

Not right now...the point is that if Apple wants to, they CAN create an API on top of iCloud to compete directly with AWS. That's the only major difference. Right now, Apple is one layer above Amazon. AWS is infrastructure, and iCloud is an application. But my point is, just like Amazon first built their data center capabilities to support their retail operation and eventually started selling their excess capacity - so too could Apple eventually do the same thing and have iCloud compete directly with AWS.

Regardless, the point is moot. My main point I was making is that iCloud is still a very small business for Apple - when what Amazon has shown us (even though they haven't broken out the financials) is that monetizing your excess capacity can be a viable business. If Apple knows how to do anything, it is to build viable products.

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