[Closed] The Apple profits

From a company that started out marketing themselves as the alternative, and the little guy up against the giants.

31,000 per hour!

I'd love to see the manufacturing plant, must have 100s of parallel lines....

shame that the people who make the goods live in poverty

I'd love to see the manufacturing plant, must have 100s of parallel lines....

They have some pretty horrific stories coming from the manufacturing plants in China etc

shame that the people who make the goods live in poverty

It does seem a mix of (overly?) low costs and massive markup, not just slave labour.

They make some great kit.
Yes it's overpriced but it just works so well.

But it doesn't seem to be any use to them. It just sums up how nuts modern business is. They can't get at it without paying tax somewhere so borrow against it to pay shareholders or some such they were saying on radio. Shareholders aren't happy, countries don't get tax so aren't happy, they aren't using it in the business or for staff or it wouldn't be there so what's the point? It may as well not exist for all the good it's doing anyone. They are just making everyone in the world £200bn poorer at the moment.

....it just works so well

Normally I would agree but having been on the phone with Apple Care for 2 hours already this morning i'm slowly losing the will to live.

Think i got a Monday Macbook

Apple's tax avoidance needs to be addressed, big pressure on them in the US as well as here in Europe

@iolo, its supply and demand - they can sell as much as they can make so they can price as they wish

so what's the point?

This is exactly what I thought when I heard on the radio this morning.

Why not just pay the tax and use it for something?

Apparently they will be hit with 30% tax if they bring it to the US but that would still leave them with $140 billion.

I don't get the borrowing against it instead of just paying the tax!

Distribution of profit for an iPhone

[img] [/img]

http://www.forbes.com/sites/timworstall/2011/12/24/china-makes-almost-nothing-out-of-apples-ipads-and-i/

This article analyzes the distribution of value from innovation in the global supply chains of the Apple iPad and iPhone. We find that Apple continues to capture the largest share of value from these innovations. While these products, including most of their components, are manufactured in China, the primary benefits go to the U.S. economy as Apple continues to keep most of its product design, software development, product management, marketing and other high-wage functions in the U.S. China’s role is much smaller than most casual observers would think. A key finding for managers is that they need to beware of relying too heavily on single customers. With its control over the supply chain, Apple has the power to make and break the fortunes of many of its suppliers. A key finding for policymakers is that there is little value in electronics assembly. Bringing high-volume electronics assembly back to the U.S. is not the path to “good jobs” or economic growth.

That pie chart shows 58 percent profit to Apple.
Is that a bad thing?
Surely the whole point of manufacturing a product is to produce profit.
What are you trying to show with this chart?

shame that the people who make the goods live in poverty

Is that really the case?

By Chinese standards they're doing very well. Most factory workers migrate from rural China to work in factories so they can send money home to help subsidise their family.

Yes, they're not on £30k a year for a 35 hour week and all driving BMWs, but relative to their families it's a pretty good deal.

Amazing how much you can make selling memory upgrades at about 10x retail prices...

What are you trying to show with this chart?

Just thought it would be of interest. I have nothing against Apple and help contribute to their profits every year. Currently own 2 iMacs, 2 MacBooks, 6 iPhones, 2 iPads, and a load more gubbins...

Amazing how much you can make selling memory upgrades at about 10x retail prices...

That is pretty cheap compared to HP and Sun. We had an HP Mini Computer at Nortel and paid £30k for a memory upgrade. The engineer came out, took the case off, removed a 2 pin connector and put the lid back on....

I once heard that if an ipad was manufactured in the US it would retail for $14000. probably isnt true but just makes you realize the difference

what I don't get, and may be naive is the rabid aversion to paying tax on profits by these big corporations?

surely getting 70% of a big number is better than having to hide it away and be unable to access 100%.

or am I missing something?

What is amazing is how a single product can completely transform a company that was a bit of a lost cause in the mid 90's.

[quote=footflaps ]Amazing how much you can make selling memory upgrades at about 10x retail prices...
That is pretty cheap compared to HP and Sun. We had an HP Mini Computer at Nortel and paid £30k for a memory upgrade. The engineer came out, took the case off, removed a 2 pin connector and put the lid back on....

you were paying for the knowledge of which 2 pin connector to remove.

What's the point indeed? They've proved they can do it, now they need to prove their CSR consciousness and spread it about. I would love to see that done - pay the tax and spread $140bn on good causes globally. If I was Apple CEO I'd be doing that.

Oh wait, shareholders... they get the next $18bn between them. Or half of it, with another $9bn to good causes.

what I don't get, and may be naive is the rabid aversion to paying tax on profits by these big corporations?

surely getting 70% of a big number is better than having to hide it away and be unable to access 100%.

or am I missing something?

Why not just pay the tax and use it for something?

Our corporate tax is 25% in the US its 35%, Apple have probably swerved something like $5 billion in taxes this quarter alone. It is a disgrace.

Why pay tax when the rules say you don't have to. That's why the rules have to change.

Still mildly amusing that so many comments re corporate fat cats screwing the system are penned on a product from one of the very fat cats that are being complained about.

Obviously, Apple are pushing their gear for way more than it costs them to produce it. Again, profit is usually vital to the continued existence of any company in the private sector. However, for me at least, there's a threshold on just how much of a profit margin I am funding when I make a purchase.
[u]Which is one reason why I don't do Apple, because if I did, I'd feel really stupid paying out so much for something that cost so little to produce[/u].
However, this does explain why Apple appear to be so popular here in this forum.
😉

@CaptainFlashheart
[img] [/img]
or should it be the Iironing

[url= http://www.bbc.co.uk/iplayer/episode/b04vs348/panorama-apples-broken-promises ]Watched this[/url] before Christmas, was quite interesting.
RM.

jam bo - Member
what I don't get, and may be naive is the rabid aversion to paying tax on profits by these big corporations?...

That's what consumption taxes do - get some money for the govt out of the product.

As for prices - I can remember being ecstatic at getting a bargain 10Mb hard disk for under $1,000 quite a few years ago, or getting an additional 128Kb memory chip for about the same and having to solder it on to my board.

I once heard that if an ipad was manufactured in the US it would retail for $14000. probably isnt true but just makes you realize the difference

Depends on what they mean by manufactured. Most of the expensive parts come from (are manufactured in) Japan and Korea, where the bulk of the parts profits goes. The actual manufacture assembly is a very small % of the overall cost and if they assembled in the US, it might add $25 onto a unit, but not a huge amount. Biggest issue is the US doesn't have the infrastructure to manufacture consumer goods on that scale any more.

[i]It is a disgrace.[/i]

I agree. Corporate tax avoidance is wretched! Once the employees have been paid a good wage, share holders paid out too. Then paying 25-35% of the remaining profit should be viewed as a duty of Apple. They shouldn't even have to be chased for it. But then again, while I don't buy Apple, there appears to be no general appetite to boycott the brand.

[b]Company Making Really Good Products in also Making Large Profit Shocka!![/b]

As for prices - I can remember being ecstatic at getting a bargain 10Mb hard disk for under $1,000 quite a few years ago,

[i] binners - Member

Company Making Really [s]Good[/s] [b]low manufacturing cost[/b] Products in also Making Large, [b]untaxed[/b] Profit Shocka!! [/i]
FTFY.
😉

I've got to say, I agree with some of the comments here. What's the point in making huge amounts of profit just to have it tied up and fairly inaccessible in an offshore bank somewhere?

My biggest issue with it is haw do they manage to make so much by selling products that aren't even that good anymore?
I say this as someone who's had a few iPhones and Apple laptops and I'm currently writing this on my iPad. Their products aren't a patch on what they used to be. The latest OSX update on my one year old MacBook Pro has made it almost unusable at times, the new iOS software on my iPad has made it slower than a slow thing and the iPhone 6 is just the same as all the ones before it but slightly bigger.
I wouldn't class a single one of these things as being premium in any way except for price.
I'm astounded that they can make so much money be selling such mediocre kit.

I once heard that if an ipad was manufactured in the US it would retail for $14000.

Probably true if you took the 1.8% spend on labour, and then calculated the equivalent cost if that was paid in US equivalent wages as opposed to CN ones.

As noted above, the standard of living for a CN worker on those wages is considerably better than one who isn't. I used to work for a US chemical giant with many far eastern factories and have seen it with my eyes; the workers do alright. However, they are becoming 'greedier' (subjective / emotive term but you know what I mean) and wages are increasing substantially, up to the point where it then becomes more economic to retrain a new workforce regularly. 'Thankfully' the supply of labour isn't likely to dry up any time soon.

I had serious qualms about the employment practises, and it was one of the reasons that made me decide to leave my former employer.

Happy to say they have not 1p of mine

I'm astounded that they can make so much money be selling such mediocre kit.

And the stuff out there thats better than it is......?

Everything's relative.

Why pay tax when the rules say you don't have to. That's why the rules have to change.

100%.

For all the handwringing about Apple/Starbucks/Google/Amazon etc tax schemes, the reality is they're only going to pay what they have to within the law. Anything else is basically self-handicapping themselves in favour of their competitors. Not gonna happen.

Don't blame the player, blame the game. (Change the law).

I'm sure there's better and there's definitely much worse.
It's what I'm used to. I tried a Samsung S4, good god what an awful phone. I was so glad when I could upgrade back to an iphone.
I've had macs in various shapes and forms for may years. I understand them, I like them.
I was using my sisters desktop with Windows 8. That was a bloody dire experience.
Maybe I'm too stupid to understand other technology but with Apple, I have no problem. (written on a macbook pro with iphone 6 plus and Ipad Air charging on a docking thing just next to it)

Biggest issue is the US doesn't have the infrastructure to manufacture consumer goods on that scale any more.

Didn't Michael Moore do a documentry on this (with a huge anti-capitalist slant) to do with Nike trainers and found it was actualy possible, and make a profit, but as the price of the trainers was essentialy fixed high then it wan't a case of asking people to pay more for them (because if you took it out of the profit margin they didn't have to), it was the shareholders money, so they were only ever made by the cheapest factory in the East and still sold at the premium price.

Our politicians are quite happy the way large corporates avoid paying tax as they all hope to get a nice job on the board once they retire and do very nicely for themselves like Tony Blair (although he prefers to be paid by genocidal dictators rather than CEOs).

Until we change our politicians to some with morals, nothing will change wrt tax avoidance.

Don't blame the player, blame the game. (Change the law).

This.

If there was any will whatsoever within governments to put a stop to this type of tax avoidance, they could stop it tomorrow. How keen do you think George and chums are, despite making the occasional noises when the natives get restless at the obvious injustice of it? A lot of the tax avoidance hot spots are British territories. London is now essentially a tax haven for non-doms and their funny money, which the City is quite happy to rinse for them. This hasn't happened by chance.

The track record of the newly appointed head of the European Commission, Jean Claude Juncker, says it all. This was the man who, as Prime Minister of Luxemburg, was instrumental in establishing it as the worlds premier destination for massive corporate tax avoidance. He was the only candidate put forward for the job by the EU, and duly crowned.

So what do you reckon the chances of the EU having a crack down on corporate tax avoidance any time soon then?

Our politicians are quite happy the way large corporates avoid paying tax

Look at the bike industry.
Where are the majority of bikes and bike bits purchased in the uk actually made?
You all know that some companies pricing has gone astronomical in the last 10 years. Have manufacturing costs really increased in line with the final purchase price?