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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: MGV who wrote (168363)	4/13/2014 11:25:32 AM
From: pyslent	1 Recommendation Recommended By Ryan Bartholomew Read Replies (1) \| Respond to of 213176

For one, you sound to be unaware that ITunes and services alone has more revenue with higher margins than all of Amazon. You must be thinking profits or Amazon digital sales only? Amazon as a whole has 4x the revenue of iTunes, software and services. But you are right, the ecosystem is a big component of what makes Apple devices compelling. Building and maintaining that ecosystem is the highest priority.

To: MGV who wrote (168363)	4/13/2014 12:14:30 PM
From: Ryan Bartholomew	Respond to of 213176

ITunes and services alone has more revenue with higher margins than all of Amazon. Please enlighten me. What % of Apple's profits come from not from selling their hardware? (My guess: single digits.) What % of Amazon's profits come from not from selling their hardware (Amazon-branded - Kindle, etc.)? (My guess: almost all.) I wasn't suggesting Apple doesn't have large absolute revenue from non-hardware sales. My point is they are heavily reliant upon hardware profits (i.e., eliminate or even reduce them substantially company profits decrease), whereas Amazon could sell endless hardware at breakeven and still grow their bottom line. Then you'll realize that while Amazon uses hardware to sell low margin products. Correct. The incremental sales they gain from selling breakeven hardware produce very low margin revenue, but it's still profitable.If Apple started selling breakeven hardware, it would add incremental non-hardware revenue at high margins (as you correctly pointed out), but not nearly enough to offset what they gave up. Amazon has no profitable streaming TV hardware line to cannibalize... they lose nothing by adding it to the mix. ...how much untapped pricing power does Amazon have in time? They increased Prime fees by 25% with barely a ripple in protest. They'll have to do more of that. They can also boost margins by improving their cost structure to be more efficient than anyone else but keeping prices flat. Releasing the drones or acquiring UPS might accomplish that :) Apple uses its ecosystem of products and services to sell high margin, premium branded hardware. Without the sticky, highly functional ecosystem, it would be just a hardware company and without wings, a plane would be a bus. I agree. This is precisely why I think iOS share (i.e., continuing to be one of the dominant mobile operating systems worldwide) is so critical for Apple.