Samsung posts $7.4 billion profit as handsets mask weak chip sales
reuters.com
reuters.com
Next somewhat unexpectedly 2/3rd of the profits are from mobile division - Smartphone sales mainly. Wonder if all the parts Samsung supplies to Apple make them so little profit (they sell displays, DRAM, Flash and make Apple's SoC for them) that they could just stop doing that and their bottomline would be hardly touched.
I am sure I am misreading something here - or may be margins are just razor thin in everything Samsung sells to Apple.
According to Wikipedia, Samsung's revenue in 2011 was U$247 billion. That's about the nominal GDP of Hong Kong or Israel.
Samsung builds ships, skyscrapers, it owns departments stores and provides life insurances. The conglomerate is a complex maze of interconnected companies. The ownership structure is very complicated. There is an excellent article about it in The Economist.
Approximately $5.1B of Samsung's profits came from their phones; this is despite Samsung being an extremely diversified company. I cannot find what proportion of Apple's profits come from sales of iPhone and iPads; they do, however, make up a majority of their revenue.
"I cannot find what proportion of Apple's profits come from sales of iPhone and iPads; they do [...] make up a majority of their revenue."
it's imo very safe to assume that.
They sold an astonishing 26.9 million iPhones in Q3, 58 percent growth compared 2011. Also 14.0 million iPads (Q3), 26 percent growth.
With a 4.9 million Macs sold (only 1 percent unit increase) and a 19 percent decline with Ipods, i guess it's safe to assume that most of their revenue (especially additional revenue compared to last Q3 earnings) comes from Iphones/Ipads.
All numbers from official press release:
http://www.apple.com/pr/library/2012/10/25Apple-Reports-Four...
Anyway: Good job Samsung :)
http://www.asymco.com/2012/08/21/the-interlopers/
Looks like 90% ish. Really astounding to see Apple and MS profits side by side like that. From ~10% of MS to nearly double over less than five years.
The entire conglomerate is on another level and approx. double the size of Samsung Electronics.
The company said it expected DRAM oversupply to run on into the current quarter, but sees a tight NAND flash memory market.
Intel had the same problem. They switched markets from commodity to monopoly. They're still around.
I've noticed Samsung's ability to crush it since about March of last year and have been long Korean tech dominated ETFs to hedge my Apple stock - which I recently sold and subsequently shorted. Samsung is Dell with profits. It in combination with Android will destroy the iOS ecosystem.
Here's to profits with openness. May the Microsoft strategy once again prevail.
Apple was good while it lasted and it brought a lot of great tech forward by a few years. But they're out of screens to attack - just like Microsoft is really out of operating systems to attack. Disclaimer: I'm long Samsung, and will be long Google once more if the price drops further.
You never bet against Linux in the long term. Just like you never bet against capitalism or democracy.
Linux always wins.
I'm not too worried. Apple was worth ~$700 billion and based on future growth prospects, market saturation, commodity competition and the squeeze currently being put on by the entire world's electronic manufacturing community backing Android on both the high/low ends and in terms of sheer volume (millions of activations per day) - I feel rather secure.
Apple is being Netscape'd.
No company can survive a full world supply squeeze with path dependent adoption. Even with their cash horde (which they are paying out because they literally can't use it) they can't directly confront hundreds of billions in global investment in electronics manufacturing through South East Asia chasing Apple's profits. If they do try - they'll be Solyndra'ed.
Screens are now commodity (see lagging iPad).
However, I've been thinking of closing up my short this week so who knows - I might buy. Investors who win are investors who think and always have the ability to change their minds, reverse direction and go all in if the fundamentals change.
I don't really care either way.
But seeing as Apple TV isn't trying anything ambitious, and they've decided to pay all that cash back to investors instead of disrupting new markets, and Samsung is clearly killing it as their chief rival, I also hold the OP's opinion that Apple has peaked.
Samsung is killing it, but Apple still made more money this quarter (and every recent quarter). They are a 6-700 billion dollar company that is growing > 20%. With a PE of 11, how do you short that?
To say that they've peaked is not to say that they're going to fail or flop or anything like this, but I don't see them getting to a $1Trillion market cap without a major disruption in television. To say that they've peaked and that their stock is unlikely to go up is not necessarily a critique of Apple, but an acknowledgement of gravity.
It seems to me that the way the phone business is they don't really need to do anything special at all and they will make about 50 billion profit next year. That makes them undervalued in my opinion, just based on the fundamentals.
Now, do I think they are going to a trillion market cap in 3 months, not at all. But I think at this level they are a much better buy than sell. If only for the dividend that is likely to be growing by large amounts. all this being said i agree that samsung is also a buy. They are selling huge amounts of phones, and they are also selling the components for lots of others (though i think i just read they stopped selling screens to apple maybe?)
Desktop linux adoption is still in the low single percentages. I think your linking linux with democracy/capitalism is very random.
However - Linux dominates mobile and it dominates commodity consumer tech. It already dominates back end server tech. My Android phone/tablet is indistinguishable from the iPhone/iPad. The forcing function for this was due to manufacturers needing an OS to run their mobile systems - since Apple ain't licensing - they are forced to adopt Android to scale out their high volume production.
Linux dominates server tech because licensing fees kill business models and the vast majority of backend processing is mostly stable and needs to be horizontally scalable.
The world is going to run on linux. And it'll be through the browser.
It was so damn successful on that goal that at some point (early 2000's) we thought we could reach world domination without any heavy investment.
I have a very functional, good looking, modern 'free' desktop.
Disclaimer: Im a KDE contributor.
Ubuntu has so far lead the charge with the Linux desktop and even back in 2005 the user experience was atrocious (no fault of their own).
The open source community should've just given up and transferred resources to FireFox, servers and the Linux kernel - because so far net investment in desktop Linux has had negative ROI.
Just look at the example of Plan9 to see why.
Its goal was not reaching mass market (hence, its not a company selling a product). Its goal was creating a usable free desktop. We have more than one usable desktop. We have been successful by definition.
But the fact that you say "we should've just given up" or "Desktop linux was always completely stupid idea" tells me that you do not share the concern of people who are working (mostly as volunteers) on desktop linux.
These groups work together when their interests are aligned. Many people, for instance, have an interest in ensuring the Linux kernel works well. But the goal, and hence our success, depends on the individual.
Linux has been my free as in speech OS for many years. I love it! I don't give a shit about the "Desktop". Sorry, KDE contributor, KDE is a very impressive product, I just don't need it. The command line is how I use Linux, because it is a far better way to deal with a computer. If you are a power user.
Linux, from, by, and for, power users has always worked spectacularly well using the command line.
The desktop? That's always been something our pride and ambition wanted, but we never needed it.
Are you telling me that you use none of them and perform all your tasks without even running X?
Email does not need window managers, same with music players, chat service, emacs is my "office suite", etc. All of these are generic things for a wide public. For everyone. But OSX and Windows are already doing a great service for everyone.
Why should the free and open OS also be easy to use for the general audience? What's so wrong about it being specialized to power users?
My point is that Linux as an OS for and by hackers has been spectacularly successful. As an OS for everyone else? Meh.
Specific distro's might have mainstreaming the Linux desktop as a goal. Some might have failed. Some are still trying.
But there's no single goal here. Nor even a single vision of what a "Linux desktop" should look like.
It released me from dependency hell, forced me to learn VIM, and vastly improved the quality of my Google searches when I had a development question.
As a result, I'm a much better developer today than if I had been able to afford a Mac.
Edit for spelling
What do you have to believe for an Android dominated future? (from end of 2010):
http://www.asymco.com/2010/11/03/what-do-you-have-to-believe...
quote:
"So what’s the bottom line?
For an Android dominant future, several conditions must be met; one will need to believe all of these to be true:
* The addressable market for modular solutions will have to grow much faster than that of inter-dependent vendors. [The chart shows in-line growth--again due to the overall growth of the market. The green guys above won't just roll over.]
* The split of licenses between Android and Windows Phone within the addressable market must favor Android. [Again, this is unlikely as "politics" will interfere. (I won't even touch IP issues.)]
* The current modular vendors will not become inter-dependent or the current inter-dependent vendors will become modular. [Now why would they tear themselves apart if they are growing?]
* The profitability of Android vendors must be high enough to make modularity sustainable [more about this later.]"
So to believe in an Android dominated future, you'd need to believe 4 things, that he's sure won't happen, that all turned out to happen, and to an extreme degree (e.g. Android vs Winphone market share which he predicts at roughly 10/20 percentage points is more like 70/5, Samsung is clearly making Android profitable, Nokia shopped itself to both Android and Winphone and no-one would be surprised if RIM did likewise, etc. etc.). Does this mean he believes in an Android dominated future now? Somehow I doubt it.