The real news is that their margins seems to have shrunk dramatically from 48% to 38% and profit is down 18% from the year ago quarter.
Looks like they're facing pressure and are dropping prices to maintain sales.
Looks like they're facing pressure and are dropping prices to maintain sales.
Yes, the amount of money is more than what Apple can realistically spend but they can give that money to shareholders who could invest that money in other ventures. That's an amazing result of great profits.
I'm not saying that "Apple doesn't deserve its profits". I'm saying that past a certain point, the marginal value to society of huge profits drops to zero, and that Apple is past that point.
It wasn't a discussion about value to society. It was discussion about too much money being a bad thing for Apple, which I disputed.
The theory is that investor will be more likely to make such smart investments in the future.
Its terribly difficult to judge Apple or compare them to "normal" companies but there's a prevailing sentiment in some investment quarters that if your profits are too high it means you're not investing enough back into growth. In this case apple gave back 2 billion in profits but gained 4B in revenues. In a lot of cases this is a growth tradeoff many companies would take.
Why is it "surely" so? We're talking percentage margin here, not the margin in dollar terms. The iPad Mini can theoretically have a higher margin than the iPad.
The way I think about it, the iPad Mini requires largely the same components as the regular iPad but runs at hundreds of dollars less. This is slightly mitigated by a cheaper screen and smaller battery, but I'd have thought it's still a lower margin product.
It's not so black and white between expensive products and commodities, by the way. Both Boxster and 1 Series are still relatively expensive.
Right, spot on, $50k for a 6-cylinder two-seater while American counterparts are half the price with 8-cylinder engines. And who says Porsche/BMW are in trouble because of that? And who says GM has a great business model because of that? Nobody! But in the tech it is somehow backwards.
Who cares about Porsche market share in their right mind? Porsche makes about $20k on average on every vehicle they sell in Europe. And they have maybe 0.5% of the market share. GM losses nearly $2k on every vehicle they sell in Europe. And has about 20% of the market. I don't think that "commodity model" makes sense for Apple. They should stay away from it.