Apple announces MASSIVE profits

[okgo]

Incredible to see what happened to the iPod and now the tablet, two have become one - the phone rules supreme and covers all bases and of course the life cycle of a phone is much shorter than that of a tablet which Apple are finding as people are buying iPads but not replacing them nearly as quickly as they are their phones...

There are now apparently roughly 900 million apple devices in the world, another mad stat is that over the last 12 months Apple have sold 65m iPads, the rest of the laptop market sold 120m.

[tangerine_sedge]

Eric Mc said:

liller said:

I'm not suggesting that they aren't paying tax, I'm merely contemplating whether or not they could do something with that amount of cash. Me? I don't want anything from them, just opening a discussion.

Apparently, the corporation is structured in such a way that the tax they are paying is minimal. The vast bulk of the profits is sitting in tax haven registered companies and is causing a massive problem regarding being able to pay dividends to the company shareholders. That is the main reason why they are sitting on a cash mountain.

At the moment, the only way shareholders are getting any sort of return on the investment they have made in Apple is for the company to BORROW money so they can buy back some of the shares from the shareholders. This keeps the profits "safe" in the tax haven company whilst the US company is amassing debt.

Watch this space to see how this all eventually pans out. You could have the US company collapse under a debt burden in its efforts to NOT pay tax.

Hmm, interesting. I knew that they were not paying shareholders, but didn't understand the reason why. I always just assumed they were building a war chest for when the Apple bubble bursts.

So, if they want to use the capital they have, they would have to move it somewhere else and pay tax on it? I just don't understand corporate/international tax, it all seems like smoke and mirrors to me

[andy-xr]

liller said:

The amount of cash they are sitting on is reported to be enough to wipe out the UK's deficit - incredible when you actually contemplate what they could do with this surplus cash. Could they not do something for the greater good with this money?

Ah, who made this connection between Apples profits and the UK's deficit. Was it you or the reporting? It's dangerous to put the two together, cos then it makes people think somehow, Apple should bail out the UK, which gets justified by them not ever paying any taxes, just like the rest of all them, corporates, with their offices and expensive things.

I'm sure it's to try and push maybe jealousy? Envy? Begrudging meh? Something like that, I cant quite put my finger on it

If I had 100 million quid,surely it'd be up to me whether I wanted to do any greater good or not? Even if I had a company. I dont have any expectancy or need for Apple to do anything, they can employ people to sit there counting it for all I care.

liller said:

Will there ever be another contender to this (smartphone) market? It seems like for any company to take on this level of consumer demand it would be an impossible task, with so many handset makers continually trying and failing it's a wonder more companies haven't given up.

I dont know what the revenue split is between phones, tablets and computers, I'd guess that they sell more phones for less money and less gross profit and sell less computers but have more out of them. I could google, but I cant really be arsed if I'm honest. What I do know is that they dont have dominance in the market, when you see Samsung, Sony, LG and HTC combined, plus all the lower tiered vendors and the nonamers

At one point I was happy to pay £600 for a phone, subsidised over 2 years, but tbh they all do the same thing now anyway, and I think the innovation, or the ability to market the noninnovative bits has dried up. Where the phone market is right now is probably where laptops were 10 years ago, no-one's really inventing anything so they're sueing each other instead

[keith333]

I thought American companies tended not to pay out dividends as income is taxed at a higher rate than capital gains. So as the share price increases, shareholders can sell some shares if they want a return.

[afrochicken]

Eric Mc said:

Apparently, the corporation is structured in such a way that the tax they are paying is minimal.

Their provision for income taxes for the 3 months is $6.392 Billion. I'm sure it's minimised in every possible way, but they're still paying massive sums with a tax rate of around 26%

My proposal (if you're reading, Tim) for what they should do with the cash pile is not to waste it funding one year's waste that is the UK deficit, but instead to carry on doing what they're doing- continue to reward the shareholders who take such risks investing in the business, and continue being run as a prudent solid business. Too many companies waste billions that they don't have on terrible assets. It's great to see such a success story being run well with the future in mind. The best part of it is that anyone can be a part of the success if they want to be.

[julian64]

Its an interesting question when Apple fanboys will stop.

The profit on apple phones is high. Very high. Its enough to make the complany look good even though sales in other areas are falling.

Its enough to put them at the top even though samsung sell far more phones than apple.

I don't think anyone can say that the Apple tech is ahead of samsung, most of the time its behind samsung.

So the only aveune left is that an apple fanboy will pay the massive premium for the badge, or because they think the operating system is far superior to android?

Any way I look at this it seems the apple fanboy likes the badge a lot.

[Otispunkmeyer]

anonymous said:

[redacted]

there was a third guy who founded apple with jobs ans wozniak. He sold out quite early, i think selling his shares of 10% for $800. Now at the time that probably seemed ok, and later apple nearly imploded until they brought Jobs back. But I bet he kicks himself every day for that.

I also get the impression that Apple could produce phones and tablets in the shape of a penis and they'd still be bought by their fans

Absolutely. iSheep.

Hooli said:

Didn't Windows get looked at as a monopoly? same thing really, one OS with a massive share of the market.

Not sure about that, wasn't the issue the bundling of Internet Explorer with Windows?

[Eric Mc]

afrochicken said:

Their provision for income taxes for the 3 months is $6.392 Billion. I'm sure it's minimised in every possible way, but they're still paying massive sums with a tax rate of around 26%

Source?

Do you mean "Corporate Taxes" rather than "Income Taxes".

And is the figure you quote the taxes they expect to pay on their profits or are they lumping transactional taxes (such as VAT etc).

[Hub]

Strong brand, loyal customers, massive margins and rapid product obsolescence = $$$

I just don't think their products are worth the money - except I have been a fan of the ipod due to the higher capacities. Currently have a 64gb ipod touch, which they will probably cull eventually like they canned the much loved ipod classic! I also hate how products have such a short life, and everything has to be meddled with all the time - e.g. itunes version 576 etc with more unpopular changes. They aren't the only ones to do that but the pace of change is quite quick!

[liller]

Sony announced 1000 job cuts in it's smartphone business today, it's a tough market.

[Challo]

julian64 said:

Its an interesting question when Apple fanboys will stop.

The profit on apple phones is high. Very high. Its enough to make the complany look good even though sales in other areas are falling.

Its enough to put them at the top even though samsung sell far more phones than apple.

I don't think anyone can say that the Apple tech is ahead of samsung, most of the time its behind samsung.

So the only aveune left is that an apple fanboy will pay the massive premium for the badge, or because they think the operating system is far superior to android?

Any way I look at this it seems the apple fanboy likes the badge a lot.

Apple have been very clever to ensure all their products link easily and means you can switch between your phone, laptop, tablet using icloud or itunes. Its makes the most technophobe person feel comfortable and increase people to then purchase the next Apple product because they all interlink. I know most tech savvy people will notice the flaws and realise you can do similar with other OEM's but for the large proportion of the public want something easy.

Also we need to remember Apple have been around for years, the OS platform has basically said the same and people don't like change.

I think fanboys of Apple products will continue to be buying them in their droves for years.

[MitchT]

okgo said:

The worry I have is that the 'froth' that makes up most of this massive profit is all generated by the sale of 'trendy' things. The serious (Mac) part of the business has always been pretty steady. It's a worry because, as a pro user of Mac hardware in graphic design and music, the bursting of the 'trendy stuff' bubble could result in the pro user part of the business going down with the trendy gadget part, leaving people like me with nothing more than flaky Windows platforms to work with in future. If I were Apple the Mac part of the business and the rest of it would be two separate legal entities.

[JagLover]

Eric Mc said:

Apparently, the corporation is structured in such a way that the tax they are paying is minimal. The vast bulk of the profits is sitting in tax haven registered companies and is causing a massive problem regarding being able to pay dividends to the company shareholders. That is the main reason why they are sitting on a cash mountain.

At the moment, the only way shareholders are getting any sort of return on the investment they have made in Apple is for the company to BORROW money so they can buy back some of the shares from the shareholders. This keeps the profits "safe" in the tax haven company whilst the US company is amassing debt.

Watch this space to see how this all eventually pans out. You could have the US company collapse under a debt burden in its efforts to NOT pay tax.

A distortion caused by the American tax system which taxes foreign profits as it is remitted.

[aka_kerrly]

Not surprising Apple can generate a huge profit when they sell Iphone 6 for £750, Ipads/Ipad minis for >£500 and Laptops at >£1k that offer very little other than a white finish over other devices costing half as much.

Hats off to them they have successfully positioned themselves as high end fashion items so that people who know nothing about tech expect the latest most expensive Apple product to be the best on the market and few bother to check they just want Iphone eleventy billion.

[iphonedyou]

julian64 said:

Its an interesting question when Apple fanboys will stop.

The profit on apple phones is high. Very high. Its enough to make the complany look good even though sales in other areas are falling.

Its enough to put them at the top even though samsung sell far more phones than apple.

I don't think anyone can say that the Apple tech is ahead of samsung, most of the time its behind samsung.

So the only aveune left is that an apple fanboy will pay the massive premium for the badge, or because they think the operating system is far superior to android?

Any way I look at this it seems the apple fanboy likes the badge a lot.

They sell the odd computer, too.

And those are superior in just about every way I care about. The phone? Nah.

[julian64]

iphonedyou said:

julian64 said:

Its an interesting question when Apple fanboys will stop.

The profit on apple phones is high. Very high. Its enough to make the complany look good even though sales in other areas are falling.

Its enough to put them at the top even though samsung sell far more phones than apple.

I don't think anyone can say that the Apple tech is ahead of samsung, most of the time its behind samsung.

So the only aveune left is that an apple fanboy will pay the massive premium for the badge, or because they think the operating system is far superior to android?

Any way I look at this it seems the apple fanboy likes the badge a lot.

They sell the odd computer, too.

And those are superior in just about every way I care about. The phone? Nah.

Apple haven't made a computer since they gave up with motorola chips and switched to intel. An apple computer is no more than a clone running an apple operating system.

Being a fan of the operating system I can understand. But your point of view is simply the nonsensical ramblings of a fanboy.

[RumbleOfThunder]

Lot's of patronising condescension in here with the "apple fanboy" "isheep" spiel. God forbid people actually like the design, feel and software of their iphones without being some kind of shill.

[afrochicken]

Eric Mc said:

Source?

Do you mean "Corporate Taxes" rather than "Income Taxes".

And is the figure you quote the taxes they expect to pay on their profits or are they lumping transactional taxes (such as VAT etc).

Source is their accounts

I'm referring to them as income taxes simply because that's how Apple refer to them in their report. I don't know how the taxes break down. They say their tax rate for the next quarter is expected to be 26.3%, but again I haven't seen a breakdown of that

[liller]

RumbleOfThunder said:

Lot's of patronising condescension in here with the "apple fanboy" "isheep" spiel. God forbid people actually like the design, feel and software of their iphones without being some kind of shill.

This will always crop up!

[anonymous-user]

liller said:

I'm not suggesting that they aren't paying tax, I'm merely contemplating whether or not they could do something with that amount of cash. Me? I don't want anything from them, just opening a discussion.

ISTR that contrary to the "normal" American ethic of quite generous philanthropy, Apple is notorious for giving very very little money to charitable enterprises.