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Android Businesses Cellphones Iphone The Almighty Buck Apple

Google Earns $2 Per Handset; Apple, $575 366

Posted by timothy
from the rough-figures-and-harsh dept.
Hugh Pickens writes "While Apple generates more than $575 in profit for every iOS device, and according to estimates in 2007 Apple earned more than $800 on every iPhone sold through ATT, Horace Dediu reports that Android generated less than $550m in revenues for Google between 2008 and the end of 2011, earning only $1.70 per year, per Android device — explaining how Apple is sucking up two thirds of the profit in the mobile phone business. Dediu's starting point is a settlement offer Google made to Oracle of $2.8 million and 0.515% of Android revenues on an ongoing basis. His assumption is that those numbers represent Google's revenue from Android to date. 'If this is the case,' writes Dediu, 'We have a significant breakthrough in understanding the economics of Android and the overall mobile platform strategy of Google.' Of course profitability is not the only reason Google is in the mobile phone business. 'P&L considerations were not the only (or even at all) factors in investment for Google. Having a hedge against hegemony of potential rivals, having a means to learn and develop new business and having a role in defining the post-PC computing paradigm are all probably bigger considerations than profitability,' writes Dediu. 'My take is that [Android] is not a bad business. But it's also not a great one.'"
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Google Earns $2 Per Handset; Apple, $575

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  • by Anonymous Coward on Sunday April 08, 2012 @07:36AM (#39611781)

    Most work which is done on a PC, still needs to be done on something resembling a PC form factor.

    Just because you can e-mail, IRC and browse the web on a mobile phone it doesn't mean you can reasonably produce a substantial document, piece of art or CAD work. Yes, you /could/ do it, just as you could tap out a representation of anything with a single Morse key, but you'd be working so inefficiently and with so much punishment to your upper limbs that no business would consider it.

  • Wrong (Score:5, Informative)

    by Anonymous Coward on Sunday April 08, 2012 @07:41AM (#39611825)
  • Re:Difference? (Score:0, Informative)

    by Anonymous Coward on Sunday April 08, 2012 @07:42AM (#39611827)

    They don't?

    http://www.google.com/nexus/ [google.com]

  • Re:Difference? (Score:4, Informative)

    by palindrome (34830) on Sunday April 08, 2012 @07:56AM (#39611881) Journal

    Let me rephrase...

    Google do not manufacture devices. The moment an iPhone is sold Apple makes a good chunk of profit, when an Android phone is sold Google gets nothing.

  • Re:Ads included? (Score:5, Informative)

    by poetmatt (793785) on Sunday April 08, 2012 @08:03AM (#39611911) Journal

    Most notably android doesn't include what anyone else makes off the phones.

    Android: "$2".
    developers: $50

    manufacturers: some amount.

    Since apple is involved with all of the above, they're naturally including all of that. Which is not exactly an apples to apples comparison.

  • Re:Difference? (Score:3, Informative)

    by BasilBrush (643681) on Sunday April 08, 2012 @08:04AM (#39611917)

    No they don't. That's a Samung phone. Google don't manufacture it, contract it for manufacturing, handle it nor sell it. The only thing they make on it is the standard licensing fees for Android that they make from any other phone that carries the Android trademark.

    Google just used it as a flagship for a particular version of Android. That's why it' singled out on the Google site.

  • by jo_ham (604554) <joham999@noSPaM.gmail.com> on Sunday April 08, 2012 @08:14AM (#39611969)

    Me too.

    I'll always use a PC and will never use a mobile phone or tablet or whatever else it is that I'm supposed to have...

    And I'm supposed to do serious work and study on a tablet? hahahahahahahahahahahahahahahahahaha

    No, obviously not, but it's clear you don't do much "study" either way.

    The phrase talks about the computing landscape as a whole, not on an individual basis. A large potion of the computing population have found that tablets and phones work very well for them for almost all of their daily computing needs. This is what's meant by that phrase "Post-PC computing".

    It does not mean that PCs are going away.

  • Re:Ads included? (Score:5, Informative)

    by SolemnLord (775377) on Sunday April 08, 2012 @08:17AM (#39611975)

    Do "Android revenues" include advertising, e.g. ads shown in apps?

    Yes. That's where the gross majority of Google's revenue from Android comes from. The Asymco link breaks it down, and points out that Google also makes between four and five times that much per iDevice, since Google is the default search engine on iOS. Google's ad-based revenue lets it worry about revenue per smartphone [asymco.com], not just per Android smartphone.

  • Re:Difference? (Score:5, Informative)

    by realityimpaired (1668397) on Sunday April 08, 2012 @08:27AM (#39612007)

    I was going to moderate, but that's the second time you've posted flat-out wrong information on this thread...

    The Google Nexus carries the Google name, because Google commissioned it, and set specific guidelines for how it's to be used/sold. It was manufactured by Samsung, and most of the profit goes to Samsung for it, but there are certain rules governing how that particular phone can be sold, and those are set by Google.

    For one, the Nexus can't be sold with a network lock. It's sold as a "reference" device, and is unlocked to any network.
    For two, it is not allowed to have any manufacturer-specific branding, and is sold with a stock unmodified Android.

    There's other differences, but those are the big ones.

  • Re:Ads included? (Score:5, Informative)

    by Karlt1 (231423) on Sunday April 08, 2012 @08:37AM (#39612041)

    Google claimed in front of a congressional hearing that 66% of all mobile searches come iOS devices. Google reported pays Apple $100 million a year for being the default engine on Apple devices.

  • by Swampash (1131503) on Sunday April 08, 2012 @08:55AM (#39612121)

    there have been previous estimates that Google does indeed make more money per handset from iPhones than Android.

    Not estimates, it's in Eric Schmidt's testimony before Congress. Fully two thirds of Google's revenue from mobile comes from Apple devices.

  • Re:Ads included? (Score:5, Informative)

    by Mistlefoot (636417) on Sunday April 08, 2012 @09:30AM (#39612247)
    "Android manufacturers aren't exactly getting rich either..."

    Samsung just posted $5 billion profit for their last quarter.

    http://www.theglobeandmail.com/report-on-business/samsung-posts-record-quarterly-profit/article2394031/

    Apples quarterly profit from their last quarter was just over $6 billion.

    http://www.apple.com/pr/library/2011/10/18Apple-Reports-Fourth-Quarter-Results.html
  • Re:Ads included? (Score:3, Informative)

    by Karlt1 (231423) on Sunday April 08, 2012 @09:39AM (#39612293)

    Samsung just posted $5 billion profit for their last quarter.

    You do realize that Samsung makes more than just smartphones, don't you?

    http://www.techspot.com/news/48038-apple-samsung-account-for-95-of-all-handset-profits.html [techspot.com]

    With Apple making 80% of the profit and Samsung making the other 15%.

    How are HTC, Motorola, LG, Sony-Ericson, etc. doing?

  • by blind biker (1066130) on Sunday April 08, 2012 @09:54AM (#39612369) Journal

    Android is finding it tough to even spread to tablets.

    What? Did you just write that in all seriousness? Samsung is selling a shit-ton of Android tablets of various form-factors, and there are a large number sold by B&N, Asus and Amazon. Sure, Apple sells more tablets than any other single manufacturer, but Android tablet sales outpaced iPads by 3 to 2 in 2011! Source: Associated Press [yahoo.com]

  • Re:Difference? (Score:5, Informative)

    by edumacator (910819) on Sunday April 08, 2012 @09:55AM (#39612373)

    You are splitting hairs. They make money on Nexus sales, but Nexus sales makes up a fraction of the overall Android market. Compare this with Apple, that makes 100% of iPhones, and you see that one is an ad company while the other is a hardware company.

    It stands to reason that Apple would make more from the manufacturing of the phone.

  • Re:Ads included? (Score:4, Informative)

    by Karlt1 (231423) on Sunday April 08, 2012 @11:04AM (#39612721)

    You do realize that Apple makes more than just smartphones, don't you?

    The article only took smartphones into account.

    And from the article I linked to discussing the Samsung $5 billion: "“(While) 60-70 per cent of (Samsung’s) profit came from handset sales this quarter, ... with memory chip prices rising, chips will play a big part in second quarter profits,” said Kim Sung-in, a chip industry analyst at Kiwoom Securities."

    That's *handset sales* not all of which are smartphones -- Samsung sells a whole lot of dumbphones and not even all of them are Android phones. Samsung also sales Windows Phones and their own bada phones,

    "Chip sales" also have nothing to do with Android -- especially with Apple being their largest external customer.

    Apple don't say. But they do say "The Company sold 17.07 million iPhones in the quarter. Apple sold 11.12 million iPads during the quarter. The Company sold 4.89 million Macs during the quarter. Apple sold 6.62 million iPods."
    So less then 50% of the devices sold by Apple were handsets.

    That's nice and all, but 70% of Apple's revenue comes from the iPhone and you're off by quarter....Apple sold 37 million iPhones during the quarter ending in December.

    And Apple's net income was $13 Billion not $6 Billion....
    http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii [google.com]

  • by goombah99 (560566) on Sunday April 08, 2012 @11:36AM (#39612899)

    When they say apple "makes" 575/ handset they mean revnue not profit. If you assume all handsets cost the vendor (phone company usually) about the same then the revenue per handset is the same for android or iphone. How much of that is profit? Well it depends on the margins of Apple and samsung. Presumably samsungs margins are higher than apples (since apple contracts to samsung for parts.).

  • by gl4ss (559668) on Sunday April 08, 2012 @12:10PM (#39613091) Homepage Journal

    no.. the 575 is supposedly the profit portion. you see, 800 is the revenue number.

    but it's just one part of this clusterfuck of a "story".

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