[dungdongdang]

Valuation is fine, but as mentioned, that is short-term success. Enron was good at that. Myspace was good at that. RIM/blackberry and the nokia phones had that. And almost overnight, it's gone.

Apple is a fad that got propped up by phones. They're behind all other major computer vendors. They have a very small marketshare for phones. They have the biggest profit margin out of anyone, and it's because of literally a couple of products.

People who go for things with a huge profit margin (overpriced things) do so based on emotional response (a fad) as opposed to logical reasoning. This is why they buy a phone wrapped in glass - it's shiny. That makes them liking your product volatile. A company enjoying 15 minutes of fame on limited SKUs is not a successful company. It's a rich company, that won the lottery from people who like shiny things.

Yes, they do make things that "just work" better than the competition. They limit choice, put you behind a wall, give you no control - and there is that group of people who want that. The problem is, that group will overnight change to some new fad phone vendor that comes out, and apple will become uncool overnight. Same thing will happen to facebook, instagram, twitter, etc.

If you do take microsoft or google for example - they have a thousand eggs in a hundred baskets. This is stability. Heck, even amazon - cloud services and selling goods, book store, mechanical turk - they're in everything. Apple is selling a phone and a computer.

[culturestate]

> Apple is selling a phone and a computer.

Even if this were true I don't think it would matter because Apple sells a lot of phones, but anyway this is a gross oversimplification of what Apple is in 2020. The services business alone - App Store, iTunes, etc. - is almost $50 billion a year. Apple nets as much money selling digital goods as Samsung does from its entire line of business.

They also make the only smartwatch consumers care about, headphones that have become status symbols, the canonical tablet (everything is an iPad even if it isn't), one of the most popular STBs in the world, and a metric ton of accessories and peripherals.

The money doesn't come from accounting fraud or tricking people; it comes from making really good stuff that lots of people want to buy.

[dungdongdang]

you are exactly proving my point. they sell a lot of phones. which means a huge chunk of their revenue is 1 product. app store is not a separate product. phone goes away, store goes away. itunes? I'm sorry, but it's an archaic piece of software that people install because it's the only way to get music onto apple playback devices. you know - the iphones. phone goes away, itunes goes away. there are a million other places to get all the same music.

the apple watch? the one that only iphone users have, because they have an iphone?

headphones? who buys apple headphones for their android phone again?

ipad? the thing that runs the os and the store from the iphone, which no one who isn't interested in phones would buy? people who don't like iphones won't buy an ipad. it is literally the same target market. whoever makes the new 'cool phone to have' is going to also make a new pad. phones and pads are tied.

and the accessories for all that - again, dependent on the phone 100%.

lots of people want to buy it (if by lots you mean a tiny fraction of the people). margin is high - it's not tricking people, it's selling the product as 'premium.' that tiny percentage of people agree. it's not actually premium for everyone else, since you don't own the device, and features are limited. when's the last time you chromecast hn to your big tv screen from your iphone again? how about plugging into a friend's computer and grabbing a music folder? he doesn't have itunes, and it's not a mac. how about storing your presentation meetings and some vm images for a product demo you want to do for work - or do you need a usb flash stick for that.

it's not 'really good stuff.' it's 'fad' - who in their right mind would wrap a phone in glass - those things fall a lot. would you buy a car made of glass?

everything you gave as an example is a fad that goes away in a minute when it's not cool anymore. it's no mark of a successful company. it's like calling a guy with a #1 hit a success. do you remember 'who let the dogs out?' so does everyone else. now, the iphone is no dog. it's pretty and shiny. a better example is rico suave. he makes shampoo now i hear.

[harpratap]

> Apple nets as much money selling digital goods as Samsung does from its entire line of business.

Can I see source for this claim? Both Samsung Electronics and Apple do $200B+ revenue every year.

[culturestate]

It's not a perfect comparison but with the most recent easily google-able quarters:

Samsung Q419 net operating profit: KRW 7.16 trillion (US$5.92 billion) [1]

Apple Q220 services revenue (net cost of sales): US$8.6 billion [2]

1. https://news.samsung.com/global/samsung-electronics-announce...

2. https://www.apple.com/newsroom/pdfs/FY20_Q2_Consolidated_Fin...

[harpratap]

Why are you comparing revenues to profits?

[culturestate]

Because I'm trying to quickly compare net income across two businesses that operate under different accounting rules in varied industries but if we want to be pedantic about it and proportionally attribute OpEx to services, too:

Apple services net sales: $13.3B

Apple services cost of sales: ($4.6B)

Apple OpEx, 14%[1]: ($1.3B)

That's ~$7.4 billion in net income from services, which is as close to a 1:1 expression of services' contribution to "operating profit" as you can reasonably get in the five-minute financial analysis I'm willing to perform for an HN comment. For reference, Apple booked $11.25B profit for this quarter overall.

1. Services account for 14% of the total cost of sales, so I attribute the same amount in OpEx.