Cash Cows

16 10 2017

Levi’s, Burger, iPhone
One hell of a profit margin?

The simple answer is YES.

If you want to calculate the profit margin for an iPhone you have to be a professional and even then, if you aren’t working for Apple in this business area, you’re faced with a lack in lots of relevant details.

What do you need for expense budgeting?

Apple’s SEC filings
Leaked manufacturing costs
Leaked prime costs of components

Most of the two latter data have to be retrieved from Chinese companies. That’s not only difficult to read for us but also to understand what’s included and why it could be reliable information. If you ever lived in an Asian country like me you know that “Think different” applies to businesses.

So you only can calculate an estimated profit per device. These factors (and some more) have to be taken into account:

  1. Taxes
  2. Licensing fees
  3. Production costs
  4. Manufacturing costs
  5. Operating expenses
  6. Wholesale to retail markup
  7. Research & Development costs
  8. Selling, general, administrative costs

#8 is a really heavy calculation and can’t even exactly be done by Apple’s employees. It includes everything from paying the electric bill, shipping and storage, additional costs along the supply chain, Tim Cook’s salary and that of all others, and, and, and.

After doing the math …

Roughly half, or more, of every iPhone sale is profit.

The numbers which lead to this result aren’t air tight. Apple makes far more profit than any other phone manufacturer, but 50 percent isn’t unheard-of for a highly successful company which also brings a lot of jobs directly and indirectly bound to the product.

The Gross Profit Margin (= (Sales – Cost of Goods Sold)/Sales) tells us the profit a company makes on its cost of sales, or cost of goods sold. In other words, it indicates how efficiently management uses labor and supplies in the production process.

Here are the GPMs of some companies playing in the same league as Apple:

  • Nike 43 %
  • Porsche 50 % (btw the only automaker)
  • Levi’s Jeans 52 %
  • Burger King 56 %
  • McDonald’s 40 %

Tesla, the company of Elon Musk (known for his failure to file for insolvency in due time) makes 17 % and is within the a range of 10-20 % typical for US industries (Source Sageworks).

We’re overpaying for more than just iPhones these days.

So if you complain about Apple
be consequent and stop eating burgers.

Oh, I forgot. That caps it all. Wireless carriers make as much as 10,000 % profit with the rates they charge for SMS plans.

Enjoy your burger
while texting with your iPhone
via your provider’s cellular equipment.
Take care when riding your Porsche back home.

Source digitaltrends

Thanks for visiting iNotes4You.





Finito!

10 10 2017

A moderate gale is over.
Now Tim and Luca are waiting for the numbers.

People love visual content because the human being is built to absorb such kind of information.

So here is my concept map about iOS Updates for the iPhone including this year’s new hard- and software, a very special year, the 10th anniversary of Steve’s masterpiece.

The oldest model on which iOS 11 can be installed is the world’s first 64-Bit smartphone, the iPhone 5s, manufactured by Foxconn and first released on September 20, 2013. Apple wasn’t the first company using a biometric identification system but the 5s was the first smartphone with a perfectly functioning approach, the fingerprint scanner. Benchmark tests show us that it’s running smooth with iOS 11. So it still can be a powerful primary or backup device after upgrading to a newer model.

Again many people will and are already do repeat their yearly reproaches that Apple just delivered technology already implemented in the devices of its rivals.

What can we learn from history?

Well, everything has it’s preceding ideas.

Would Einstein’s Theory of Relativity be possible without Newton’s Laws?

Edison and Swan were the two most successful at combining the necessary technologies and engineering techniques to build a light bulb (electricity and the knowledge of how to economically create vacuums).

There is no need to talk about COPYING. Success comes up when intelligence combines the right things at the right time in a sexy apparel with high durability and a perfect user experience. This alone is already a technological achievement and innovation crowds of people today derive benefits from.

Regarding Apple’s success the most important thing Steve Jobs overtook from Alan Kay (one of the key scientists behind the graphical user interface and the object-oriented programming) was the belief

People who are really serious about software should make their own hardware.

Jobs made it to the core principle of Apple.

The company’s chip design regularly shows us that “less can be more”. Also with it comes less fragmentation (admittedly not relevant for people getting a new device every year) but it’s tough on developers keeping their code best performing on thousands of different configurations.

Less fragmentation could be useful, but …

A major opportunity to reduce the total environmental and social impacts caused during raw materials extraction and manufacturing of smartphones and tablets is to use the devices as long as possible. Nevertheless, it is observed that smartphones and tablets are often used for no longer than 3 years. In many cases, the reason for early replacement of smartphones and tablets is not attributed to a defect. A large number of these products are replaced even though they are still functional – psychological obsolescence. Short innovation cycles, aggressive advertising, tariff models of service providers, Apple’s trade-in offers, and of course thoughtless users are the sources for increasing environmental damages.

Use it up, wear it out,
make it do, or do without.

A saying which seems to be not worth thinking about in our times.

Want to know why the iPhone is special?

Just look at the 2013

iPhone 5s

Thanks for 💧ping by.





Watts Up

27 09 2017

Power to your iThing

🚽 WC is the traditional water closet

But talking about this would be off-topic.

Lets talk about *W* ireless *C* harging that means bringing Watts up to your iThing after laying it down on a little machine which functional principle was already born about 150 years ago.

Without the groundbreaking publication of “A Dynamical Theory of the Electromagnetic Field” in 1865, by Scottish J.C. Maxwell wireless charging wouldn’t be possible. So much for the copycat discussion and the simple fact that everything has its preceding ideas.

Again Apple isn’t the first offering WC but after listed as one of the 213 members of the Wireless Power Consortium they now want *to make the things better than they are*. And they will do it again. Others will follow.

How WC works …

ction chargers use an induction coil. An alternating current creates an alternating electromagnetic field around the coil. A second induction coil in the iPhone takes energy from the electromagnetic field and converts it back from alternating to direct electric current to charge the Li-Ion battery.

The source field must cover the receiving coil which results in a short range of energy transfer. So iPhone and charger must be in close contact without any metallic objects between them (they would be a shielding for the electromagnetic field) except an additional case for the iPhone (Leather or Silicone). A metal plate, sometimes used for magnetic car mounts, may already be obstructive.

Over greater distances this method is highly inefficient and wastes the vast majority of the energy put into the transmitting coil. Greater distances between sender and receiver coils can be achieved when the inductive charging system uses *resonant inductive coupling*.

Think of it like this …

A tuning fork can cause another to vibrate when both are tuned to the same pitch. Using the resonance phenomenon energy transfer can drastically be increased and wouldn’t require a close contact between charger and iPhone.

<<<<
xcited to see what’s coming next after Apple will massively engage in the WPC. AirPower is just the beginning.

Thanks for taking your time.





How Apple works

25 09 2017

In a fascinating interview with Calcalist radio, the largest economic newspaper in Israel, Horace Dediu gave us a scintillating insight into how Apple works. Horace Dediu is a well-respected analyst who knows a thing or two about Apple.

“Apple cannot possibly be perceived as normal or average, but is analyzed as such. This is a company that breaks all categories, as based on the growth front and on the value or dynamic versus static. It just works differently. ”

Dediu posits that Apple uses the same strategy as an army.

“You have to look at Apple as adopted by the pattern of military activity. The army has no obligation to produce profits, but it has a deep commitment to achieving goals. Everyone focused and training for a specific task, and then another mission.”

No obligation to produce profits?

Maybe this is valid for Elon Musk’s company TESLA. But it’s not valid for Apple. During Steve Jobs’ time as CEO it was Tim Cook who optimized the supply chain and so laid the foundation for Apple’s growth. On the other hand Tim has strong beliefs manifested in a statement he made in 2014:

“If you only want me to make things, make decisions that have a clear ROI, then you should get out of the stock.”

So both is possible, strong beliefs and success. It can be summarized as follows:

Everything needs some custom artwork. Top designed products increase desirability and desirability always goes along with profitability.

Thanks for dropping by.





Titan mutated to Gnome

4 09 2017

That logo doesn’t fit into a steering wheel.

Apple has laid off hundreds of employees who were working on project “Titan” which allegedly should bring the next big thing to the market, an  Car.

Now under the leadership of Bob Mansfield,

Apple has transitioned to building an autonomous driving system rather than a full car.

That’s what I already predicted in 2015 after Tim Cook’s unsuccessful meetings with German car manufacturers.

By creating an autonomous driving system, Apple may be able to partner with existing car makers or return to its own car development project in the future, and it will be able to produce a product able to deeply integrate with iOS devices which have a worldwide market share of about 18% according to Gartner in Feb 2017.

“We’re focusing on autonomous systems. It’s a core technology that we view as very important. We sort of see it as the mother of all AI projects. It’s probably one of the most difficult AI projects actually to work on.”

(Apple CEO Tim Cook)

If it was true that the company worked on a car it was a really wicked wrong decision.

Why?

Well, did they think that the world’s most successful car manufacturers with decades of experience, an advanced sensor technology, and innovative software for autonomous driving don’t have their visions?

California might be the epicenter of e-technology but southern Germany is definitely the heart of c-technology with Daimler Benz, Porsche, Audi, and BMW as the most prominent companies with

excellent engineers, a worldwide infrastructure, an excellent reputation, decades of experience, and a significant position in the fastest growing market, China.

And more …

In my opinion they also won’t be successful with their newly defined targets. You can’t buy people and then think you can be successful in a highly complex area of technology.

Cobbler, stick to your trade.

Apple, where’s your experience?

I’m sure that everybody who would come along with the idea that Mercedes should develop a smartphone would get a long-lasting salvo of laughter from all responsible leaders in Stuttgart.

As a summary let’s say it with F. Porsche:

“If one does not fail at times, then one has not challenged himself.”

A quick look back

Karl Friedrich Benz (German, Nov 25, 1844 – Apr 4,1929) was a German engine designer and car engineer, generally regarded as the inventor of the first automobile powered by an internal combustion engine, and together with Bertha Benz, pioneering founder of the automobile manufacturer Mercedes-Benz. Other German contemporaries, Gottlieb Daimler and Wilhelm Maybach working as partners, also worked on similar types of inventions, without knowledge of the work of the other, but Benz received a patent for his work first, and, subsequently patented all the processes that made the internal combustion engine feasible for use in an automobile. In 1879, his first engine patent was granted to him, and in 1886, Benz was granted a patent for his first automobile.

Thanks for reading.





Apple’s Kernel

31 08 2017

Beside some iOS, macOS, watchOS, and tvOS updates Apple also released a couple of human updates and it’s widely expected that there is also an update of the product line-up later this year.

The Software

The main responsibilities are still in the hands of well-known -oldtimers- professionals. Not in my map is the staff of the Industrial Design Group consisting of 22 brains well-conducted by British Sir Jonathan I’ve. It’s definitely the world’s best design team for electronic devices.

The Brand Makers

Advertising is at the front of delivering the proper message to customers and prospective customers. The purpose is to convince customers that a company’s products and services are the best, enhance the image of the company, point out and create a need, demonstrate new uses for established products, and announce new products.

Among technology companies, Apple is often perceived to have something that rivals like Microsoft, Google, Samsung, and others don’t have …

That indefinable element of coolness.

Responsible for most of Apple’s advertisements is TBWA/Media Arts Lab, the most successful ad agency in the world. But in this area we also see changes in that Apple produced more and more of its big global ad campaigns in-house.

The Hardware

An open question is which new devices will join Apple’s kernel this year. A warm welcome in advance from all ecosystem dwellers. Commissioners for Migration, Refugees and Integration, aka software developers, will take care of you and cure all childhood illnesses.

The Numbers

Luca Maestri is the man who has to collect the data for the long numbers with so many digits in Apple’s accounting. He has over 25 years of experience building and leading finance teams in global companies with significant operating scale and complexity. Prior to joining Apple, Luca was CFO at Xerox and previously at Nokia Siemens Networks. He began his career with General Motors and spent 20 years in finance and operating roles in the Americas, Asia Pacific and Europe. While at GM, Luca was part of the team that established GM’s regional Asia Pacific operations, including manufacturing investments in China and Thailand. He later became CFO for all of GM’s operations in Europe, which spanned over 45 countries with annual net revenue of approximately $40 billion.

Albert Einstein once said

“The hardest thing in the world to understand is the income tax.”

I think you don’t agree Luca, right?

It’s your job to be fit in tax avoidance.

Note

You like to be creative on your iThing?

Here is an app review of INSPIRATION, a universal app for creating mind maps and concept maps.

Review of Inspiration

Thanks for reading.





The 10th Anniversary

27 08 2017

It would be a huge disappointment if the Keynote in celebration of the 10th anniversary of Steve Jobs’ masterpiece wouldn’t take place in the “Steve Jobs Theater”. This event should be organized in compliment to Steve on a campus he initiated.

With the words

We need a new Campus.

Apple Inc. CEO Steve Jobs presented his proposal for a new Apple Campus to the Cupertino City Council. Unsurprisingly it looked like the ultimate mobile device, a spaceship.

His presentation was recorded Tuesday, June 7, 2011 at the Cupertino Community Hall.

Thanks for visiting iNotes4You.








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