There’s no secret that Apple’s the richest company in the world. Through its stock value (although this fluctuates somewhat, depending on the stupid rumour of the day) but foremost through its enormous cash in the bank reserve: over $100 billion.
But how did Apple get to have such a huge amount of money in its pockets? First of all, their products are great. They’re designed and engineered to be the best and people are buying them like crazy. That’s common knowledge. But there’s also something else that sets Apple apart and enabled them to reach this high level of financial health: their huge, way above industry average, profit margins.
Though margins for the Mac line, for example, are just above 20%, the biggest cash cows are now the iPhone and the iPad, with profit margins above 40% and even reaching into the low 50% at times. To give you a comparison, Samsung (who is Apple’s closest competitor so far) has a profit margin that’s only recently reached 20% for its phones division.
It has long been Apple’s philosophy to go for the profit margin rather than for the market share. And the latest reports have consistently shown Android gaining more market while Apple keeps on raking in the lion’s share of the money. Which strategy is the right one? Well, so far Apple’s thinking has brought the financial results to which a company can only dream of.
Naturally, there are two opinions at hand here: “Android is winning” and “Apple’s still winning”. The “market share” argument is always brought about by the Android fans and the Apple-hating part of the tech press (and since hating Apple always produces the most pageviews, this trend has caught on real fast in the online press world). And the counter-argument here, coming from the Apple tech writers and bloggers, is pretty obvious: since Apple is still making the most money, they’re still the king of the hill and Android will never beat it.
Since I am somewhat a part of the latter world, I tend to agree with the conclusion: Apple is still very much in the driving seat of the tech car. But what I cannot understand is the undisimulated content from the Apple suporters when their argument regarding Apple’s money supports this cause. Here’s my problem with this: I know Apple’s making all that money, that they’re a more than healthy company because of this and they’re constantly producing beautiful products; but why in hell should this make me happy?
Unless you’re an AAPL stock owner (which most of the people aren’t), I see no reason to be this excited when I’m arguing that Apple’s money making ways are something good. Why? Because Apple would be a rich company if they’d have a profit margin of, let’s say, 25% for their mobile devices. That’s approximately half of what they make right now.
You know what would make me happy? If I could buy the cheapest retina iPad for $375 instead of $500! Apple would still make $125 on the deal and I would be able to buy these more often than now. Everyone wins. Now that would be something to be happy about; as opposed to being content to pay much more and smilingly argument your article about how Apple’s winning because it makes the most profit out of all the companies in the tech world.