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Apple commands 73%, Samsung captures 26%

It's no secret that Samsung and Apple are dominating the smartphone market. According to IDC's figures for Q1 2012, Samsung had a 29.1 percent share of the worldwide smartphone market while Apple was not far behind with 24.2 percent.
With Samsung and Apple together commanding over 50 percent of the smartphone market, you would expect for them to take home a healthy portion of profits as well. While this is true, according to Asymco, the disparity between the profits reaped by Samsung and Apple compared with the also-rans in this sector is astonishing.

[Source: Asymco]

According to Asymco, the pair accounts for 99 percent of worldwide mobile phone operating profit. Samsung is using its nearly 30 percent share of the smartphone market to obtain 26 percent of the profits.
However, the biggest winner is Apple, which is pulling in an estimated 73 percent of the profits from the mobile market. Apple's performance shouldn't come as a surprise to many considering that the company pulled in $11.6 billion in profits during the first quarter (fiscal Q2).
HTC barely made a blip with just 1 percent of operating profits. LG, Motorola, Nokia, RIM, and Sony have all posted losses with regards to their respective mobile phone divisions, so they don't even factor into this equation.

Samsung Galaxy S III
"Seen this way, the story isn’t so much that Apple 'took the profits from the incumbents'", stated Horace Dediu of Asymco. "Rather, it’s that Apple created a vast new pool of profits. And one need not look far to find out where they came from: operators. These profits were mostly carrier premiums for the iPhone 4S."

Source: Asymco

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By talikarni on 5/4/2012 12:22:22 PM , Rating: 1
Once people start actually using and the Android systems (and are not status symbol sheep who only bahh for Apple), they start to switch tablets, phones and carriers with better Android support. This is why Samsung is gaining market share fast, and starting to take away from Apple.
These newer Android systems are faster, easier, and not locked into "do what Apple says, or else" type of system that people are starting to open their eyes to.

RE: carriers
By nafhan on 5/4/2012 12:55:52 PM , Rating: 3
Coming from the point of view of someone who is very happy with Android and wouldn't dream of purchasing an Apple product... Your comment is wrong across the board.

1) I'm not seeing where Samsung is taking away from Apple. Samsung is doing well, Apple is doing fantastic, and everyone else is losing money.

2) I don't think people are starting to open their eyes to "do what Apple says, or else". My observation is that a large portion of people are very happy to do what large corporations say, once they've invested time or money into that corporations products/services. Sad, but, I think, true.

3) If the situations with Apple's mobile profits changes, it'll be the carriers doing it. Even Apple's got to know at some level that the carriers do indeed like to make money off of the stuff they sell...

RE: carriers
By Jaybus on 5/7/2012 3:16:42 PM , Rating: 2
1) Yes. The total profits has grown significantly. Apple and Samsung have taken nearly all of that growth, while the others have taken almost none. Neither has really taken anything from the other.

2) No. It is not brand loyalty. It is resistance to change, once time and money have been spent learning a particular OS / user interface. LG and Motorola sell lots of Android phones, they just have very low or negative profit margins either because they cannot make them as cheaply as Samsung does, or more likely, they don't have as a sweet a deal with the major carriers.

3) If the premium for an iPhone has to be reduced to be competitive with lower priced Android phones, then yes, the carriers certainly won't eat all of the loss and not pass any on to Apple. Make no mistake. The carriers are in nearly full control of the market.

RE: carriers
By Tony Swash on 5/4/12, Rating: -1
RE: carriers
By JasonMick on 5/4/2012 4:31:25 PM , Rating: 4
Tony, if it were not for your hostile tone I think you might not have been downrated, as you raise some valid issues, albeit (in my mind) presenting them in a somewhat unrealistic context). For example:
As soon as the iPhone becomes available on a carrier it becomes that carrier's best selling handset and outsells all the other handsets. If a carrier cannot sell the the iPhone (and if it doesn't accept Apple's financial terms then it won't) it will start to bleed customers who will defect as soon as their contracts are up to a carrier who does have the iPhone.
True, Apple's approach does have some notable advantages:

1. One new SKU per year (there is only ONE current model) --
downside: selection upside: simplicity
2. Apps --
downside: Apple's rigid control upside: the world's largest app market, largest single-phone user base, C-based native development.
3. iOS --
downside: very stale UI upside: ease of use, strong core apps
4. Hardware/Firmware --
Apple's battery life and camera are both superb and industry leading.
5. Marketing --
downside: aggressive promotion can turn off many upside: aggressive promotion can also brainwash some users into a semi-false sense of value, exaggerating the strengths and overlooking the weaknesses.

That said, Apple's phones have some notable downsides:
1. Relatively high cost (e.g. my Lumia 900 was free).
2. Dull exterior, lack of visual differentiation
3. Stale/clunky UI
4. Lack of customization.
5. Having to deal with admiration of raging fanboys
6. Sluggish 3rd party security support from Apple.

The key point about Apple's profits, and the way that the operators and carriers facilitate them, is often overlooked and yet it is the foundation of Apple's financial success. If the carriers could bypass Apple or reduce their payouts to Apple they would, and if Android was a mechanism or lever to achieve that then they would have by now. The carries cannot bypass or press Apple back financially for a very simple reasons. Apple's iPhone is not just popular, it is more popular than all other handsets those carriers sell, combined. It's customer pressure that keeps the iPhone, and Apple's profits, at the top of the pile. Apple's strategy was simple but hard, make the best phone you can, design it so people really, really want it, then use that popularity to make sensational profits.
You're oversimplifying slightly.

Apple's margins are driven up every step of the way:
1. Production: Apple demands cheaper production than rivals.
2. Sales: Apple charges carriers a king's ransom (for the strong sales you mention, largely a product of the company's marketing machine), while dodging taxes in many regions.
3. Upgrades: Apple makes it difficult to replace the battery and does not allow for removable storage, helping force users into upgrades.

Combine all those factors and, yes, Apple is unprecedentedly profitable.

Samsung, however, is appearing to follow a very similar model -- and it's paying off. It made a couple of billion in smartphone profits this quarter, despite its royalty payments to Microsoft.

Obviously Samsung is the biggest threat to Apple's almost unchallenged windfall profits.

RE: carriers
By Solandri on 5/4/2012 5:33:36 PM , Rating: 5
The site keeps rejecting my post with links as spam. Here's an abbreviated version:

He's missing the obvious price subsidy the iPhone is getting over Android phones. U.S. carriers are not passing on the full price of the iPhone to their customers. If a car dealer sells two models of car with wholesale prices of $20k and $30k, but he sells them both to customers for $30k, it's pretty obvious which model will sell more.

Tony is attributing the iPhone's strong sales to it being a superior product. While partly true, the biggest reason it's selling is because of its bigger price subsidy. Basically, Android phone buyers are subsidizing iPhone sales. In EU countries where phones are sold unsubsidized and thus the customer pays the full price, the iPhone only has 5%-9% of smartphone market share. If Tony's premise that people insist on the iPhone because it's popular were correct, you'd expect it's market share in those countries to be around 25% like the global average.

The iPhone isn't subsidized because it's popular. It's popular because it's subsidized. At the end of the quarter, it's profits which matter for a company. Apple knows this, which is why it's been content with a 5% market share in PCs. The 5% they hold is very profitable, and they don't feel they can increase it significantly without negatively impacting profits. The carriers haven't figured this out yet, and are chasing the holy grail of market share at the cost of profits.

(This isn't to say the iPhone is a bad product. It's a very good product, best-in-class by many metrics. It's just pretty obvious, to me at least, that its sales figures are being inflated by carriers being afraid to charge full market price for it. This is another reason the subsidized phone business model sucks - it distorts the market based on the whims of a few marketing execs at these companies arbitrarily setting prices. The primary vehicle of market forces - price - disappears into a huge subsidy slush fund, hiding the fact that I'm helping pay for Joe iPhone user's phone.)

RE: carriers
By Tony Swash on 5/6/12, Rating: -1
RE: carriers
By TakinYourPoints on 5/4/12, Rating: -1
RE: carriers
By Tony Swash on 5/6/2012 7:42:50 PM , Rating: 3
I may reply in more detail to your points tomorrow - it's really late here and I must sleep - but I had to reply to this:

Tony, if it were not for your hostile tone I think you might not have been downrated

Let's get real, I will get downrated if I post anything that challenges the views of the vocal minority of Apple haters and iPhobes. The first sentence in my response was sarcastic but the post I was replying to was a) drivel and b) kicks off with a common iPhobe defence meme which is the use of the phrase 'sheep' to describe millions of people whose choice of consumer durables happens to be different to the writers. I don't insult people who buy Android phones, to do so would be ludicrous, insulting and immature.

RE: carriers
By elleehswon on 5/7/2012 8:37:02 AM , Rating: 2
Apple's battery life is no longer industry leading. Sorry to be the bearer of bad news. The HTC one x owns that title. Also, the iphone 4s's battery life has been eclipsed by a quad core phone with a 4.? inch display. Good on HTC. Too bad they only have had 4 decent phones (Incredible, Rezound, One X, one S.).

Also, apple doesn't really demand cheaper production, they just put what they like to call "tried and trued" hardware in their phone. by "tried and trued", i mean 1+ year old hardware in their phones where everyone else is going cutting edge on their premier phones.

RE: carriers
By zlandar on 5/4/2012 1:45:18 PM , Rating: 2
People only have to click on your name and see that your posts are grossly slanted.

Did Steve Jobs speak meanly to you or something? Hurt your feelings?


RE: carriers
By messele on 5/4/2012 5:28:26 PM , Rating: 2
Jason Mick is an anagram of Gil Amelio


RE: carriers
By ritualm on 5/4/12, Rating: 0
RE: carriers
By Tony Swash on 5/7/12, Rating: 0
RE: carriers
By Guspaz on 5/7/2012 12:36:04 PM , Rating: 2
There seems to be this assumption that "when Apple users try Android phones, they will realize how blind they were and switch". I don't really understand this mentality. I've tried Android. I've tried iOS. As much as I like certain parts of Android, I don't like it on the whole (although it's improving a bit) and greatly prefer iOS. I like the intuitive interface, I like the restrictions that keep me safe (while others rail against them). Am I not entitled to make my own choice for my own decisions?

I have nothing against Android. I like their goals and wish the platform well, even if I don't like using it personally. But anybody who says that I use an Apple product because it's a status symbol or because I'm blinded somehow clearly doesn't have any sort of valid objective opinion. Unless you can look at each platform and see the good and the bad of each and make an informed decision based on that, rather than being an "apple fanboy" or "fandroid" or "microsoft fanboy" or "blackberry fanboy" (or whatever these terms are) and choosing a platform, you really shouldn't be criticizing other platforms.

Windows Phone 7, for example... I hate the user interface, but it DOES do some nice things with information-at-a-glance (and exposing that to developers), it's wonderfully easy to develop for (I might own nothing but Apple mobile products, but I went to Microsoft TechDays and attended several panels on WP7 development just because I was interested), and they've done great things with maintaining UI responsiveness. I'd probably never buy a Windows phone because I don't like the overall interface, but I can see that they're doing a lot of cool stuff with it.

I can point out benefits and drawbacks to all platforms in a relatively unbiased manner, and anybody who wants to advocate one platform over another should be able to do the same.

RE: carriers
By TakinYourPoints on 5/7/2012 7:09:34 PM , Rating: 2
There seems to be this assumption that "when Apple users try Android phones, they will realize how blind they were and switch".

Yup, and it is quite an arrogant and heavily biased opinion.

The harsh realities of business.
By rudy on 5/5/12, Rating: 0
RE: The harsh realities of business.
By ritualm on 5/6/2012 12:07:34 AM , Rating: 2
So much bias.

The iPhone is like that simply because Steve Jobs learned the hard way. Have you ever used a Motorola ROKR E1? I have. It's a horrible phone for the following reasons:

- carriers have full control over its firmware, thus its Bluetooth spec only allowed for pairing with headsets but not data transfers;
- as a cellphone it works, however sluggish it is; most phones at the time weren't any better. As an iPod it's slower than the real thing;
- no native 3.5mm headphone/headset port means carrying a 2.5mm-to-3.5mm adapter that is easily misplaced and lost;
- max 1000 songs restriction without a third-party hack.

Moto proudly advertised the E1 as a cellphone with iTunes-like capability. The truth is it sucked. Apple had no control over it, and it ended up going into the smartphone market itself.

Samsung might still be bedfellows with the South Korean government, but everything else is downright untrue.

By Guspaz on 5/7/2012 12:25:51 PM , Rating: 2
The ROKR E1's song limit was actually 100 songs, not 1000. You were likely to hit that limit too, since it had 512MB of storage, and most MP3s people wanted to load were under 5MB. It really was a disaster in virtually every category.

Why was LG news?
By Mitch101 on 5/4/2012 12:58:45 PM , Rating: 3
So when LG announced it was dropping Windows Phone from its lineup due to poor sales that was news for every site out there?

Seriously LG hasnt made a decent phone in ages just look at 2009 onward.

LG has to realize the problem is not Windows Phone OS and by looking at the graph they could have said the same about Android - The problem is LG.

I really like your other stuff LG but you have to know you suck at phones stop blaming Microsoft.

But what about?
By Argon18 on 5/7/2012 10:34:14 AM , Rating: 2
Windows Mobile? Lol. I thought Windows Mobile 7 was supposed to be the best thing since sliced bread? I thought Microsoft was putting more marketing resources behind it than any other project? Hmmm? So who out there actually bought a Windows Phone 7? -crickets-

Oh right, this is Microsoft. Toss those Windows Phone 7's out, because Windows Phone 8 is almost ready! Are you excited yet??? -crickets-

By BSMonitor on 5/4/12, Rating: -1
RE: Mick!
By JasonMick on 5/4/2012 2:10:31 PM , Rating: 3
Where is Jason Mick touting Android market share numbers??

I give Apple credit where credit's due.

1. It's products do have a number of upsides (e.g. the iPhone's excellent camera, the unparalleled app selection, etc.). Competitors come close, but they do not match Apple in some categories, just as Apple is outdone in others.

2. Apple is recordly profitable. Granted that profitability is heavily driven by:
i. Exploitive labor contracts, which are rumored to be far worse than the industry average.
ii. One of the most abusive records when it comes to exploiting loopholes for the purposes of tax evasion.
iii. Nickel and diming customers with massive markups for things like extra RAM or a bit more NAND.

Apple is an abuser in many regards, most definitely, but I don't wholly blame it. Those who enable, stick around, and tolerate abuse play a part in it, though they are arguably less culpable than the perpetrator themselves.

Ironically the same actions that make it an abuser also make it a winner. From a shareholder perspective Apple is terrific.

It all depends on how you choose to look @ it.

RE: Mick!
By JasonMick on 5/4/2012 2:10:51 PM , Rating: 3
*Its products...

RE: Mick!
By EnzoFX on 5/4/2012 2:29:13 PM , Rating: 3
Rumors and speculation? How can the same not be said for any other company that can, and does? Of course Apple is going to be in the spotlight, they're huge, they will hit the news headlines more. Doesn't mean they're doing anything other companies wouldn't jump at the chance at, or more likely, are doing, it's just not making headlines.

Point 1 is what's driving the entire smartphone market, and not raw specs like your average DT reader would think.

Point iii is a silly one. Most people buying Apple probably aren't too concerned with upgrades. If they are, they find out how to do it themselves when possible. Is that not the point of DIY? Isn't that what all OEM's do with upgrades, huge markups?...

RE: Mick!
By JasonMick on 5/4/2012 2:49:12 PM , Rating: 3
Rumors and speculation? How can the same not be said for any other company that can, and does?

Hardly, try well-known fact:

Apple's contracts are among the most favorable (for it) in the industry and the most unfavorable for manufacturers. But the company's massive unit business is too lucrative for Foxconn et al. to pass up, so they look for creative ways to make up the cost gap, like making their employees work long hours of unpaid overtime.

This is all common knowledge, where have you been?
Point 1 is what's driving the entire smartphone market, and not raw specs like your average DT reader would think.

What is driving the consumer smartphone industry is a variety of factors, the most important of which are marketing and carrier support.

In terms of product, key drivers are (as you said) hardware, but it's also the UI and precustomization. I think Windows Phone arguably trumps both Android and iOS in that arena, but has failed to generate market share as carrier support and marketing are the most critical factors to selling smartphones today.

Point iii is a silly one. Most people buying Apple probably aren't too concerned with upgrades. If they are, they find out how to do it themselves when possible. Is that not the point of DIY? Isn't that what all OEM's do with upgrades, huge markups?...
What? How can you upgrade your NAND? Your only option is to buy a new device...

And as for the RAM, of course a DIY upgrade is cheaper, but it's ridiculous that Apple won't give you the courtesy of doing it for you at a reasonable rate.

RE: Mick!
By superstition on 5/4/2012 3:37:18 PM , Rating: 3
"Apple's contracts are among the most favorable (for it) in the industry and the most unfavorable for manufacturers. But the company's massive unit business is too lucrative for Foxconn et al. to pass up, so they look for creative ways to make up the cost gap, like making their employees work long hours of unpaid overtime."

Have you heard (via Wikileaks) about how the US pressured Haiti to make an exemption to a minimum wage increase for its corporations such as Levi Strauss and Hanes:

Apple is certainly not the only company that likes to exploit workers. Also, since Foxconn supplies parts for many other large companies, does the company only exploit the workers making products for Apple?

RE: Mick!
By JasonMick on 5/4/2012 3:58:33 PM , Rating: 2
Apple is certainly not the only company that likes to exploit workers. Also, since Foxconn supplies parts for many other large companies, does the company only exploit the workers making products for Apple?
I never said that Apple is Foxconn's only client, I've merely noted the well known fact that Apple's contracts on a per-unit basis are some of the least favorable for Foxconn and other suppliers.

This has long been lauded (Apple's low production costs), but the flip side of the coin is that the supplier is getting less money so it tries to take it out of the employeees' hide (i.e. force them to work unpaid overtime, etc.).

Again I'm not suggesting Apple is the only culpable party here, I'm merely pointing out that its demands for the cheapest product costs in the industry create an atmosphere that's more conducive to accelerating the rate of occurrence of certain types of labor abuses.

I agree this is a problem the industry as a whole will have to face, though.

And I also think it's important to remember that for all the bad, there's a lot of good to the high tech manufacturing industry in China. After all, working in rice paddies or back-breaking traditional crafting industries isn't arguably less safe than its modern high-tech labor replacement. And high-tech labor has undeniably brought more wealth into China, though some have profited more than others.

While a Chinese laborer still can't afford to buy the iPads they produce, at least they can acquire some basic modern luxuries like a working mobile phone of some sort.

I'm glad you asked the question, though, because I think my view is broader and more considered than some would give me credit for by looking to quote-mine certain pieces of my commentary.

Chinese labor is a complex beast -- particularly when it comes to Apple.

That said, some of Apple's abuses (tax evasion, markups) are much more cut and dry, though again, it's only exploiting the willing, as I say in my original remark.

RE: Mick!
By EnzoFX on 5/4/12, Rating: 0
RE: Mick!
By EnzoFX on 5/4/12, Rating: 0
RE: Mick!
By JasonMick on 5/4/2012 4:32:54 PM , Rating: 2
Quite complex, which is why I don't understand the point in arguing that Apple may be getting away with more than others. Why single them out over and over again, as opposed to actually going at the root of the problem?
I'm all about getting to the root of the problem too. Hence why I cover a variety of Chinese labor issues throughout my time here (not just Apple).

Apple is just an iconic example as the world's biggest tech company in terms of market cap and profits.

RE: Mick!
By menting on 5/4/2012 4:11:06 PM , Rating: 3
apple's not the only one, but they are the worst one.
Our company chose NOT to do business with apple, because our CEO said that we'd never make any money working with apple; they take almost all the profits. We make more profit allocating our products for other companies that use our stuff.

RE: Mick!
By superstition on 5/7/2012 12:56:52 AM , Rating: 2
The implication is that Apple is forcing Foxconn to exploit its workers to make up for the less favorable (in terms of profit) terms. I'd like to know if that's actually the case, or if the Foxconn workers that supply other large companies are being treated basically the same. Here's a list I found recently:

"Foxconn's clients include Acer,, Apple, Cisco, Dell, Hewlett-Packard, Intel, Microsoft, Motorolla, Nintendo, Nokia, Samsung, Sony, Toshiba, and Vizio."

If it's the case, which I doubt very much, that Foxconn doesn't exploit workers making products for any of the other companies in that list, then I will be very surprised.

RE: Mick!
By Tony Swash on 5/4/12, Rating: -1
RE: Mick!
By JasonMick on 5/4/2012 2:56:02 PM , Rating: 4
Love to see the evidence to back up those assertions.

I'm not sure if you are unable to use Google/Bing, are unwilling to do so over your devotion to Apple, or are merely to deep in the distortion field to bring yourself to read what you might find....

But for you education, here you go...

i. Exploitive labor contracts

ii. One of the most abusive records... tax evasion

iii. Nickel and diming customers with massive markups

Somehow I FEAR my point will be lost on you, though, my friend. :)

RE: Mick!
By BSMonitor on 5/4/2012 4:24:16 PM , Rating: 1
None of that is ANY different than what multitudes of other corporations are doing.

i. Apple does not own Foxconn. Foxconn was around long before Apple started raking in it's billions. Foxconn is responsible for it's employees well being, not Apple.

ii. Should we bring up the Google offices around the world?? Effective tax rate of 2.4%??

iii. Where have you been?? Overcharging for options has existed in the PC world since the dawn of PC time. Go to Dell, HP, etc.. And add to the base config's. The cost is MUCH more than if the same upgrade were purchased at newegg. On top of that, go buy a car, and start adding options. Options are meant to rake profit.

Finally, if someone is willing to pay, charge them for it. It's America, they do not charge $5 a ticket to go to the Super Bowl. Why?? Because demand drives the price to the $1000s.

All your evidence can be said about your favorites, Google, AMD, etc..

You simply are biased against Apple, and to a lesser extent Intel. Every one of your blogs related to either is evidence of that.

Hence my original point. Just waiting for you to take your usual shots at Apple. It's quite predictable.

RE: Mick!
By JasonMick on 5/4/2012 4:40:59 PM , Rating: 2
Apple does not own Foxconn. Foxconn was around long before Apple started raking in it's billions. Foxconn is responsible for it's employees well being, not Apple.
True. As I said, suppliers are culpable for accepting Apple's unfavorable terms in exchange for driving up revenue and then turning around and taking it out of their workers hides.

But you cannot deny Apple is part of this problem, and more so than some tech firms.
ii. Should we bring up the Google offices around the world?? Effective tax rate of 2.4%??

And I don't know about this?

From my past pieces:
Google Inc. (GOOG) -- makers of the world's most used smartphone operating system and the world's most used search engine -- based itself in Ireland and has subsidiaries in the Caribbean and Luxembourg for more tax dodging gains.

Google told The Daily Mail that this scheme -- which many would call "tax dodging" -- is necessary in today's corporate atmosphere, as responsibility to shareholders. States a Google spokesperson, "We have an obligation to our shareholders to set up a tax-efficient structure, and our present structure is compliant with the tax rules in all the countries where we operate."

The President's support of Google also raises some eyebrows given Google's clever use of the "Double Irish" and "Dutch Sandwich" (legal) tax evasion strategies, funneling money through Ireland, the Netherlands and Bermuda, courtesy of federal loopholes, to avoid paying federal income taxes on its profits. These strategies reportedly saved Google $1B USD in 2011 and cut the company's effective tax rate to 18.8 percent, far less than the standard 35-40 most small businesses pay on earnings.

Google officially raised almost a million dollars for the President's election bid.

Ah this old chestnut again:
All your evidence can be said about your favorites, Google, AMD, etc..

You simply are biased against Apple, and to a lesser extent Intel. Every one of your blogs related to either is evidence of that.

Methinks you have not read my non-Apple pieces very carefully. I've oft criticized Google:

I've even been criticized for selling AMD short:

But whatever, don't let me remove you from your fantasy world. I'm sure you like it there.

RE: Mick!
By Tony Swash on 5/4/12, Rating: -1
RE: Mick!
By themaster08 on 5/6/2012 4:35:57 AM , Rating: 1
None of what you said there really disputes Mick's claims, it's just the same regurgitated endorsement that you copy and paste all the time.

RE: Mick!
By elleehswon on 5/7/2012 12:42:58 PM , Rating: 1
Dude - do you really believe the silly stuff that you type? That there is some dark nefarious reasons that Apple takes everyone else to the cleaners? When the real reason is just so simple: Apple are just better at what they do than anyone else.
You are correct. Apple is better than anyone else at doing what they do best....take people to the cleaners.

RE: Mick!
By ltcommanderdata on 5/4/2012 7:11:57 PM , Rating: 2
2. Apple is recordly profitable. Granted that profitability is heavily driven by:
i. Exploitive labor contracts, which are rumored to be far worse than the industry average.

Ironcially, Apple appears to be less concerned about factory conditions than its competitors, because of the company’s unwillingness to talk with advocacy groups like China Labor Watch and Students and Scholars Against Corporate Misbehavior. Li said Dell and HP responded to his group’s reports about working conditions in their factories, but Apple ignored them. SACOM’s Debby Chan told us she had had helpful conversations with both Dell and HP, but Apple had refused to meet with her.

“Dell and Hewlett Packard are not doing as good as Apple is doing right now,” Li Said. “But when we talk about publicity and public relations, it’s another story.”

Chinese labour activists have already said that Apple's outsourced factory working conditions are not worse than the competition. For computers, Dell and HP are specifically pointed out as being worse.

“Although I know that the iPhone 4 is made at sweat shop factories in China, I still think that this is the only choice, because Apple is actually one of the best. Actually before I made a decision, I compared Apple with other cell phone companies, such as Nokia,” he said through a translator. “And the conditions in those factories are worse than the ones of Apple.”

For cell phones, Chinese labour activists specifically point out that if a consumer cares about labour practices they would not buy Nokia. With their drop in market share and quarterly losses I doubt conditions are going to get any better for Nokia contractors in the near term.

Though he believes that Apple has done a better job of inspecting its factories than others, Li maintains that the public is right to put more pressure on Tim Cook’s company than its competitors who have the same problems. Because Apple makes the most profit, he reasons, it also bears the most responsibility for fixing a broken system. He maintains that it wouldn’t take more than 2-percent of Apple’s profits to dramatically improve workers’ lives in China while companies such as Dell and HP would have to spend more.

“Although we think Apple is among the best in terms of auditing, we still think that Apple can do more because it is the most profitable company in the world,” he said. “As soon as Apple is willing to give a small percentage of its profits, the workers can benefit a lot. But Apple is not willing to do that.”

Even though Apple is among the better high-tech companies with regard to supplier labour conditions, it is legitimate to criticize them for not doing more. They are a market leader and the most profitable so they should be constantly improving things to set and example for the rest of the industry. Thinking about it, Apple could in fact use improved labour practices to put pressure on competitors not only with good PR, but also financially. With Apple's profit margins, Apple could say double Chinese labour wages without too much trouble establishing a new industry norm among Chinese contractors and a new wage expectation for Chinese workers, which Apple's competitors would be heavily pressured to match to avoid contract disputes or labour unrest. With competitors having much narrower profit margins or even selling at cost or as a loss leader in the case of Amazon Fire, Apple's competitors will have trouble keeping up with increasing Chinese labour wages. So improved Chinese labour conditions and increased wages would not only benefit Chinese workers, but benefit Apple as well.

RE: Mick!
By TakinYourPoints on 5/4/2012 10:29:43 PM , Rating: 2
Efficiency and volume purchasing are two things that many people here are missing.

Apple produces one new model of phone a year. One, as opposed to the dozens of models that Samsung makes. Apple also buys parts for the same phones in greater bulk than any hardware manufacturer on the planet. All of these things drive down their wholesales costs and drive up profit margins substantially. At the same time it reduces unsold inventory. Nearly everything they sell does so at full price, while the other company with numerous models will inevitably have unsold stock due to one model being much more popular than the other.

As you pointed out, Apple's production facilities at Foxconn are no worse than any others, and are actually better in some cases. There are numerous accounts from workers of much worse treatment and lower wages at the plants of other companies.

Efficiency is the main takeaway here. Blaming things like labor, especially when labor costs make up such a tiny amount of the total cost of everyone's hardware, is completely missing out on the big picture. In this context it is a point only in aid of being inflammatory.

RE: Mick!
By Tony Swash on 5/5/2012 7:05:42 AM , Rating: 2
This worth a read. Brain hall is always good value.

RE: Mick!
By themaster08 on 5/6/2012 4:41:08 AM , Rating: 1
He's also an asshole.

RE: Mick!
By Tony Swash on 5/6/2012 11:06:35 AM , Rating: 2
He's also an asshole.

You must have squeezed and squeezed but a coherent thought just wouldn't pop out. Better luck next time :)

RE: Mick!
By themaster08 on 5/6/2012 11:51:29 AM , Rating: 2
Some things simply aren't worth the effort, such as the constant ramblings of yourself and Brian Hall, both so deeply entrenched within the Apple ecosystem.

You're a pair of closed books. Apple are the best, no amount of debate, truth or criticism will change your views, or even encourage you to open your minds to even consider trying something new.

So you tell me, what's the point? You criticise those for slating products they have no intention of purchasing, so with that logic how can you possibly criticise anything? I doubt you've ever even used an Android, or even a Windows Phone. Try spending £2000 on a Windows machine and compare that to a Mac of the same price, and see which gives you more for your money.

When someone comes up with valid criticism, with evidence, such as Jason pointing out some of Apple's flaws within this article, you simply go off on a tangent, circumventing the point at hand with your endorsement of Apple, and disparaging the competition, of who's products you neither own or use.

Believe it or not, some of us here have used and owned iPhones, as well as Androids, Windows Phones and BlackBerrys. There are some that geniuenely prefer the products of the competition. To some of us, those products provide more value. You obviously are unable to see that, which says everything that needs to be said about you, and your views here.

RE: Mick!
By Tony Swash on 5/6/2012 4:02:15 PM , Rating: 2
That's much better. You are making rational coherent points, unlike your posts that consist of merely foul mouthed insults. We disagree which is OK and and some gently ribbing is OK but all the foul mouthed insults are just unpleasant and unnecessary.

As it happens I am typing this sitting at my work bench beneath which is a MacPro (which includes copy of Windows XP, Vista, Windows 7 and Ubuntu) and a quite powerful PC running Windows 7 both connected via a KVM to the same 30 inch display.

Its true I don't own an Android phone or a Windows Phone but my two brothers owns one each of those phones and I have spent some time playing with each. WP7 is intriguing, innovative and, refreshingly, is not a clone of iOS but it's not my cup of tea and I fairly sure that it will not succeed in the market place.

My other brothers Android phone (Samsung) is obviously a copy of the iPhone and superficially a good one but when I use it the OS is quickly revealed as an inferior copy. It just doesn't feel as well put together as iOS, it's not as smooth an experience.

Interestingly when I ask each of my brothers about their phone use neither actually use their phones as a platform, they make calls, take photos and sometimes listen to music but they are not drawn into their phones as a platform. That's just an anecdote of course but it gels with a mass of evidence that seems to show that Android users are just not great users of the platform.

I remain convinced that Android was a terrible blunder by Google that stumbled into an ill thought out adventure that has taken them places they should not go and which has cost them billions. I am convinced that it would have been a more successful strategy for Google to retain it's alliance with Apple.

RE: Mick!
By themaster08 on 5/7/2012 3:20:33 AM , Rating: 2
Better from you, too. You do realise that it's not necessarily your views that get you downrated, but the way they are expressed? Now you've actually added an ounce of credibility to your post by voicing your opinions of the other platforms, having used them.

I can't say that I completely agree, although I see your point. For many iPhone users, I find that they simply use their phones for making calls, sending messages, a very few applications, and for social networking. That's purely anecdotal, of course. My point is that there are also iPhone users that are not drawn into its ecosystem.

Out of the three, I personally prefer Windows Phone. The UI feels much more intuitive, faster, consistent, and much less clunky to use, for example the use of a physical back button I feel is much more approriate than an on-screen one that is sometimes at the bottom of the screen, sometimes at the top depending on your application. It brings an inconsistency to a platform and adds to its clunkiness, especially for those devices with larger screens.

Only time will tell, of course, but I believe Windows 8 will leverage sales of Windows Phone if Microsoft play their cards right. They need to focus on integration, not just UI synergy.

There are also many aspects in which Microsoft could improve upon, such as Xbox Live. Having achievements on your phone is cool, but what would be really great if there were some true online multiplayer games. A Halo FPS on Windows Phone would be truly amazing. Even a port for the first Halo games would be enough. Instead Microsoft waste their time developing Xbox Live for iOS, which I think was a completely stupid thing to do. One of the features that differentiated Windows Phone was its Xbox Live integration. They might as well have developed it for the PlayStation 3.

Speaking of similar cases, Skype is another. The Windows Phone variant absolutely blows. Microsoft own Skype, yet every other platform has a far superior Skype application. The WP version can't even run in the background. It's a mess. I know Microsoft are going to be bringing further integration with Apollo, however this is now, and this is not helping sales now.

Microsoft need to focus much more on integration with their other platforms and services, and bring them all together in such a way that is appealing to the consumer, not a broken down, half-baked mess because their efforts are focussed more on developing applications for their competitors. Once they get that right, it will add far more value to the platform as a whole, then they need to market the hell out of it, showing the strengths of the platform. They might just then be able to gain some ground on their established competitors.

RE: Mick!
By JKflipflop98 on 5/13/2012 12:53:49 PM , Rating: 1
Which is it going to be? Brain or asshole?

RE: Mick!
By Reclaimer77 on 5/5/2012 9:59:14 AM , Rating: 1
"Tax evasion" is a term applied to someone illegally not paying owed taxes or illegally lowering their liability through fraudulent income reporting. I don't think it's fair to apply that in the case of Apple. There's nothing wrong with a company doing everything they legally can to reduce their taxable liability. Apple is clearly not guilty of tax evasion until I hear that the IRS has claimed so.

I understand you have an anti-business narrative to support though, and I love Apple-bashing as much as the next guy, but let's be fair here.

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