This is mighty impressive. To put things in perspective:
Apple's profits ($13 billion) exceeded Google's entire revenue ($10.6 billion).
Source: https://twitter.com/#!/fmanjoo/status/161932440737296386 (via gruber)
Apple's profits ($13 billion) exceeded Google's entire revenue ($10.6 billion).
Source: https://twitter.com/#!/fmanjoo/status/161932440737296386 (via gruber)
UPDATE: (@gruber has pointed out to me that it was a 14-week quarter, so only 0.935 billion a week)
Of course, it's a much smaller number of very rich humans, probably less than 1 billion, actually buying their products.
There is a limit to how long this can continue, before every person on earth, who is so inclined and can afford it, has 1+ of every Apple product that they could ever want.
Assuming $300 per user every 2 years - with 50% margin and 1B users - they can only grow income another 44% before the growth (in real terms) is totally done.
So introduce new products? Fine, but almost every possible HW function is already in the iPhone4, and they are rapidly running out of things that current technology will enable them to improve. How many people are going to drop another $600 to get 128GB instead of 64GB? Or 1920x1080 on a 3 inch screen?
Seems like it'll be time to short pretty soon.
And that's leaving aside anything out of the ordinary/expected that Apple might be cooking up in their skunkworks labs.
That seems very challenging as Chinese and Indian consumers become a larger fraction of their revenue, and as Android puts constant pressure on their smartphone business.
Most personal usage of PC laptops are mostly performing tasks that the iPad can do. And the iPad is getting more versatile faster than regular people are using PCs for more tasks. Apple hasn't maxed out their iPad business until iPads have completely displaced PCs.
Second: iPhone.
While the iPhone's market share of smart phones is about half, that market is growing. The iPhone's market share of all phones is very small. Also, keep in mind that the iPhone is Apple's strongest and most profitable business.
Third: Macs
Apple has only single digit market share here. Loads of room for growth, even at their current astounding, competition obliterating, growth rate. By no sensible metric is Apple close to capping out.
Maybe they're saving up for an actual assault on Big Brother.
[1] - http://www.gdeb.com/about/history/centennial/eb-100yrs-7.htm...
General Dynamics did a little under $32.5 billion in revenue last year, with $2.6 billion in profit. See: http://money.cnn.com/magazines/fortune/fortune500/2011/full_...
Actually, speaking of Amazon, Apple could buy them easily, and still have enough money left over for Netflix.
Thisw is, of course, idle speculation, but it does serve to highlight just how much they could throw their weight around, if they wanted to.
Anything that one really wants, the others can jack up the price to stupid levels (Nortel's patent).
I think it hurts all three companies...like spending money on nuclear missiles that you'll never use rather than something els.e
The one thing that Microsoft does differently is they pay dividends, which is a very clear way of providing value to stockholders. Google has never done this, and Apple hasn't done this since 1995.
Last quarter DID NOT include sales of the iPhone 4S in China.
http://online.wsj.com/article/SB1000142405297020462420457718...
The only problem with these companies is that they don't really know how to maximize their profits. They usually compete on price and release many models with increases costs due to complexity, so profits end up being a smaller % of the revenue.
Google is a display advertising company that occasionally puts out a better display (Chrome, Android). Apple is in the business of finding and extracting value from hardware markets no one else took seriously.
They are each other's perfect complement! Apple has plenty of experience building hardware and OS's. Their core business is to SELL physical or virtual goods (devices, songs, whatever). They don't care that much about the services. For them, services are just a mean to sell something. Something to add value to something they want to sell. e.g.: Introducing iCloud! Use it on your Mac and your iSomething.
Google on the other side, is in the business of SHOWING things. They don't care about selling you something. It's more of a problem for them to sell, than it is to just give it to you for 'free'. They are a service company. Mainly, an advertising company. That's why they don't try to sell their phones to everyone (e.g.: nexus one). They just want you to see what they have to show. So, while you are seeing it, they can show you a few ads.
They bought Android, so they could accelerate and expand their market of eyes seeing their ads.
But they should ally with Apple. Apple wants to sell, Google wants to show you things. Do you want a video for free? Go to YouTube. Do you want to buy music ? Go to Apple Store.
There's no sense in keep fighting each other.
And of course, there comes Microsoft, with its own search engine, their own store, their own mobile OS... trying to fight both of them. And they are trying hard to resurrect.
One thing bodes well for Google so far, Apple has struggled getting any kind of traction in the Online space. It's early for iCloud but it's still far from the competition.
Yes, Google historically has more robust services than Apple. Better, though? Apple's corporate DNA has them pushing for more control over their products, and outsourcing to Google doesn't serve this goal. Remember, Apple would rather release a product considered by techies to be lacking in features than to release something with a sub-par experience.
Google products tend to be reliable, and their design sense is improving. But their products tend toward functional rather than elegant; more importantly their products are designed to sell ads. This priority tends to be at odds with Apple's goal of selling products that people love to use.
At the moment I think it is more likely that Apple learns to do online services well (their missteps notwithstanding) rather than Google suddenly caring about users more than advertisers.