
Apple's financial dependence on the smartphone is increasing - jeo1234
http://www.bloomberg.com/news/articles/2015-09-03/the-iphone-company
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nnethercote
The article pitch: "Apple makes a staggering, gargantuan, and ever-increasing
amount of money from the iPhone. How can we make that sound like a bad thing?"

It's a nice touch that both graphs show the iPhone's share of revenue and
units sold, rather than totals, thus obscuring the incredible growth in both
numbers.

~~~
venomsnake
Being one trick pony is a worrying thing, even if the pony is shitting enough
gold to make Sir Tywin Lannister jealous.

Add the fact that the company has not had a new breaking star since Jobs died
and that they are playing catch up with the other players on innovation - the
chances of serious trouble in the future - while slim, are not nonexistent.

~~~
IBM
That one trick pony is going to be minting cash for the next 20 years at
least, just like the Mac has been for the past 40 years.

~~~
pjmlp
Except the Mac would have died if it wasn't for Jobs return.

I remember those failed attempts to rejuvenate the Mac OS and not having any
significant Macs sales on my country besides a single importer company on the
capital.

~~~
huxley
Fair but the Apple of today is also a very different company than the Apple of
1996.

Before the Jobs/Cook era, Apple used to have terrible inventory management,
that isn't a problem any longer.

Apple used to be extremely dependent on third-party distributors, they now are
one of the most profitable retailers in the world, they also have built wide
distribution networks far beyond "computer stores"

Back then, Apple had burned through most of the company profits, Jobs and Cook
built a tidy trust fund worth approximately $250 billion cash-on-hand

Apple is in a far better position now to handle a debacle or stagnation,
assuming one was to happen.

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geoff-codes
OK.

Per this 2011 article
([http://www.nytimes.com/2011/09/28/business/media/researching...](http://www.nytimes.com/2011/09/28/business/media/researching-
the-sneeze-and-how-to-handle-it.html)), Kleenex has a 47.1% share of the
facial tissue market. I assume these numbers reflect the U.S. (rather than
global) facial tissue market.

Per this recent article ([http://www.macrumors.com/2015/09/03/iphone-us-
market-share-c...](http://www.macrumors.com/2015/09/03/iphone-us-market-share-
comscore-2015)), Apple has a 44.2% share of the U.S. smartphone market.

Although the text of the article doesn't say it explicitly, the title of this
article effectively screams "Apple isn't well diversified! Its making too much
money on one thing!" I really don't see the sky falling here by any means.
Barring a seismic shift in the smartphone market, Apple will continue to
dominate the smartphone market, making obscene amounts of money; they will
probably also continue to innovate. And Kleenex will continue to dominate the
facial tissue market.

~~~
incepted
> Apple will continue to dominate the smartphone market, making obscene
> amounts of money; they will probably also continue to innovate

Apple is certainly going to continue making a lot of money from the iPhone but
they haven't innovated a single thing since the iPad. Actually, they've been
playing catch up on pretty much every single front and they are still way
behind on quite a few (e.g. wireless charging, NFC, ...).

~~~
geoff-codes
Agreed. Should have said "hopefully" rather than "probably".

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simonh
Meanwhile Samsung gets over two thirds of it's operating profits from
mobile(1), and a big chunk of the remainder comes from it's semiconductor
sales, and a big chunk of those are to Apple. So not only is Apple's main
handset competitor also highly dependent on it's own phone sales, it's also
highly dependent on Apple's phone sales as well. But... oh yes, I forgot. It's
not Apple so nobody gives a crap ;)

If you're going to paint Apple as being vulnerable, you need to say vulnerable
to what. In every major market Apple competes in they have never looked
healthier, and their competition has never looked weaker and with so few cards
left to play.

(1)
[http://www.samsung.com/us/aboutsamsung/investor_relations/fi...](http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/financial_highlights.html)

~~~
the_mitsuhiko
Samsung is much bigger than just Samsung Electronics however.

~~~
simonh
That's true, but I'm not sure how that's relevant to their competitiveness
versus Apple. I suppose it might mean they could operate at a loss for longer,
but that hardly seems like something Apple's leadership should loose sleep
over. If anything, doing so would be more damaging to other Android handset
manufacturers that are themselves close to the wire financially than it would
to Apple, so if it came to that it might even end up being a net strategic
plus for Fruit Co.

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adventured
The revenue comparison between the iPhone and the luxury car market is
certainly impressive.

More impressive perhaps is that Apple's $50 billion in profit the last four
quarters, is nearly equal to the combined profit of: GM, Ford, Daimler, BMW,
Toyota, and Volkswagen.

~~~
ojm
Hey, at least GM & Ford are making a profit now.

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hyperpallium
Title misleads with "dependence". The case is made that iPhone sales
contribute a disproportionate and increasing share of revenue, but not Apple's
dependence upon it.

~~~
nnethercote
Indeed. Apple has a $100+ billion cash pile that is growing fast.

It's a company that literally makes so much money it doesn't know what to do
with it.

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WDCDev
Why invest in Apple if so much of its value is wrapped up in one product line?
This is the challenge facing Apple.

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JustSomeNobody
So, go buy a Mac. They are very nice computers. I'm typing this on a rMBP and
there's no flex in the keyboard. You get used to that in a hurry if you type
all day.

