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Old 08-31-2012, 03:33 AM   #31
Wil
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Why do people buy apple computers? there bad at gaming and ceton cards dont work in macs.
They are literate?
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Old 08-31-2012, 05:43 AM   #32
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Ya those two doesn't have any connection!
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Old 08-31-2012, 10:10 AM   #33
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And what I'm saying is that the 30% they get is a tiny sliver of their total revenue. Apple's app/music/ebook/movie sales are not there to make them big bucks.

It does generate profit, but compared to their hardware sales, it's practically irrelevant.
I disagree. A single app that sells to millions of people for .99 makes Apple 300,000 for each milllion copies sold, and there are hundreds of Apps selling for that much or more with that kind of distribution. And while I don't have any confirmation, I'd bet that Apple gets 30% of music sales as well. The App and iTunes store is a runaway money making venture for Apple and hardly a value add for their devices.

Why do you think they are trying to move the App store model to the PC? It's because the model is profitable, that's why.
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Old 08-31-2012, 10:47 AM   #34
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I buy all my music amazon

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I disagree. A single app that sells to millions of people for .99 makes Apple 300,000 for each milllion copies sold, and there are hundreds of Apps selling for that much or more with that kind of distribution. And while I don't have any confirmation, I'd bet that Apple gets 30% of music sales as well. The App and iTunes store is a runaway money making venture for Apple and hardly a value add for their devices.

Why do you think they are trying to move the App store model to the PC? It's because the model is profitable, that's why.

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Old 08-31-2012, 03:31 PM   #35
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I buy all my music amazon
I buy most of my music from Amazon, simply because it's cheaper and Amazon doesn't charge me tax (yet, they will next year). If price was the same, I'd use iTunes as it's simply easier for me as I have an iPhone and iPad.

Actually Amazon recently pushed out their "cloud player" app to iOS which lets me stream or download music directly from Amazon, the same as Apple's iCloud does. So really it's a toss up. I'd pick whichever is cheaper, which is usually Amazon.
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Old 09-01-2012, 11:54 PM   #36
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I disagree. A single app that sells to millions of people for .99 makes Apple 300,000 for each milllion copies sold, and there are hundreds of Apps selling for that much or more with that kind of distribution. And while I don't have any confirmation, I'd bet that Apple gets 30% of music sales as well. The App and iTunes store is a runaway money making venture for Apple and hardly a value add for their devices.

Why do you think they are trying to move the App store model to the PC? It's because the model is profitable, that's why.


It's not an opinion, it's a fact. They are a publicly traded company and there are very detailed revenue statements that go over all of this in great detail. The last time I checked they make 6% of their revenue from iTunes store sales. 30% of that is profit and that profit has to pay for a massive amount of back end support to make it possible.

They do make money on it. It is profitable and I'm sure other companies out there can only dream of making as much as they do selling apps and songs... But to apple, it's a tiny slice of the pie.

I guess my only point is that an iPhone or an iPod isnt a "sell the razor to make money from the blades" kind of deal. They make 98% of their money selling the razors and 2% selling the blades. Those numbers aren't exact but they're pretty close.
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Old 09-02-2012, 12:22 AM   #37
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I guess my only point is that an iPhone or an iPod isnt a "sell the razor to make money from the blades" kind of deal. They make 98% of their money selling the razors and 2% selling the blades. Those numbers aren't exact but they're pretty close.
Apple makes quite a lot on their hardware sales because of the "Apple tax". For example it costs 27% less to make a low end iPad than what Apple sell it for. High end iPads sell for close to double their build cost. iPhones and Macs are similar with the iPhone having a profit margin around 55% or about $350 per phone. Apple sold about 4 million iPhone 4S's in the first few, which is over a billion dollars in profit just for that week (minus advertising costs). So yeah, Apple makes most of their money on hardware sales.
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Old 09-02-2012, 08:16 AM   #38
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And I still don't see why they are so popular. Every time I've used one of their devices from a friend I'm left scratching my head and it reaffirms my decision not to get one. And am glad I'm using other devices that seem better and are much more intuitive to use.
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Old 09-02-2012, 10:14 AM   #39
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And I still don't see why they are so popular. Every time I've used one of their devices from a friend I'm left scratching my head and it reaffirms my decision not to get one. And am glad I'm using other devices that seem better and are much more intuitive to use.
Actually Apple products are so popular because they are very intuitive to use. Everything works the same way throughout the interface and the UI is the same everywhere (though Apple is starting to get away from that). For example if I want to copy text, I know I can just tap and hold on text (anywhere and in any app) and select copy.

My one year old niece can use an iPad. I doubt she'd be able to figure out how to use an Android tablet.
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Old 09-02-2012, 12:31 PM   #40
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I disagree. A single app that sells to millions of people for .99 makes Apple 300,000 for each milllion copies sold, and there are hundreds of Apps selling for that much or more with that kind of distribution. And while I don't have any confirmation, I'd bet that Apple gets 30% of music sales as well. The App and iTunes store is a runaway money making venture for Apple and hardly a value add for their devices.

Why do you think they are trying to move the App store model to the PC? It's because the model is profitable, that's why.
It's a complete no brainier. They wouldn't have made any money off of sales for most of these applications before and in the app store they get a steady revenue stream for minimal effort.
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Old 09-03-2012, 02:16 AM   #41
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It's not an opinion, it's a fact. They are a publicly traded company and there are very detailed revenue statements that go over all of this in great detail. The last time I checked they make 6% of their revenue from iTunes store sales. 30% of that is profit and that profit has to pay for a massive amount of back end support to make it possible.

They do make money on it. It is profitable and I'm sure other companies out there can only dream of making as much as they do selling apps and songs... But to apple, it's a tiny slice of the pie.

I guess my only point is that an iPhone or an iPod isnt a "sell the razor to make money from the blades" kind of deal. They make 98% of their money selling the razors and 2% selling the blades. Those numbers aren't exact but they're pretty close.
Actually, they make about $1.2B on online sales, i.e., iTunes. That's the 30% cut they made (so it's roughly $4B sales per quarter).

Of course, it's a VERY tiny slice of the pie - you're talking about $1.2B revenue, when Macs sell an order of magnitude more, and IOS devices even more (another order of magnitude above that, I believe). Plus, it's revenues, not profit, so all that's re-plowed into iCloud and other services. And it's sales from apps, as well as much (30% cut too) and movies and TV shows (probably 30% cut there too - see a pattern?). And that revenue has to pay for hosting the free stuff as well.

And don't forget that it's credit card fees and such - 20-30 cents per transaction plus 1-5% of total transaction value. Buy one 99 cent app a week and that 30% is consumed in charging your credit card.

iTunes gift cards are probably break even as well - considering you can get them 20% off pretty regularly, which means Apple probably offers them to the store at 25% off cover price (i.e., a $100 iTunes card probably charges the store $75, so the sore gets $25 profit) since you can bet the store still makes a profit, and Apple's 5% goes into printing and distribution.

In the end for Apple apps, movies, music, books, and TV are considered break-even-ish - value-adds for the consumer to buy Apple hardware. If you want to contrast this, take Amazon which sells content at a profit and hardware at break-even (Apple sells hardware, tosses content in as a value-add. Amazon sells content, tosses hardware in as a value-add.)

Oh, and Apple's 30% cut isn't that high - comparatively. Books normally go for 50% off cover price wholesale. Console DLC can go between 25-40% off their sale price goes to the seller.
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Old 09-03-2012, 07:49 AM   #42
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I find this discussion about hardware versus content amusing.

The demand is for content always has been always will be. Hardware without content (and yes software programs are content) doesn't do anything and is basically worthless.

In the end the desire for content always drives sales of hardware. If consumers stopped wanting content they would have no use for the hardware.

So regardless of where/how Apple shows profits it is because of the demand for and sale of content.
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Old 09-03-2012, 09:24 AM   #43
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I find this discussion about hardware versus content amusing.

The demand is for content always has been always will be. Hardware without content (and yes software programs are content) doesn't do anything and is basically worthless.

In the end the desire for content always drives sales of hardware. If consumers stopped wanting content they would have no use for the hardware.

So regardless of where/how Apple shows profits it is because of the demand for and sale of content.
And this gets to one of my points in a post a log time ago... Tivo needs content. Somehow they need to be able to deliver content like Apple does. I wish Tivo could somehow work out some deals to deliver the content... that would be nice.
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Old 09-03-2012, 11:18 AM   #44
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And this gets to one of my points in a post a log time ago... Tivo needs content. Somehow they need to be able to deliver content like Apple does. I wish Tivo could somehow work out some deals to deliver the content... that would be nice.
I agree. Unlike with a phone, TiVo can't expect people to buy a new TiVo every two years (or however long they currently monetize a lifetime subscription).
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Old 09-03-2012, 01:14 PM   #45
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And this gets to one of my points in a post a log time ago... Tivo needs content. Somehow they need to be able to deliver content like Apple does. I wish Tivo could somehow work out some deals to deliver the content... that would be nice.
I agree that TiVo should be providing access to as many content producers and re-sellers as possible. Their really is no reason any other streaming device should have access to anything that isn't available through a TiVo. However I am not sure there is a case for TiVo to actually becoming a content reseller like Apple. I think there was a case a few years back but TiVo decided to go with Amazon instead and now I don't think there is any real opportunity for TiVo to move into the content reseller market.

While Apple was a visionary with their iPod/iTunes combination they were also in the right place at the right time. The consumer desperately wanted a way to easily consume digital music and because content produces had refused to deliver it, a large black market had been created that was threatening the whole industry. Apple was able to deliver a solution that paid the content providers while protecting their content from theft, provided the consumer what they wanted, and at the time gave Apple a near lock on controlling digital music distribution and the hardware used to consume it.

The situation is not the same in the video world. The video content producers are not in the same situation that the music content producers where in. So they have been much less willing to allow a major change like the music industry did. TiVo has to work in that reality but it is clear they are still trying to find ways to provide content to the consumer in a way that allows the consumer to consume it way they want to - the up coming "Stream" is an example of that.
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Old 09-03-2012, 02:54 PM   #46
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And this gets to one of my points in a post a log time ago... Tivo needs content. Somehow they need to be able to deliver content like Apple does. I wish Tivo could somehow work out some deals to deliver the content... that would be nice.
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