asymco
Latest
App devs made more money than the box office last year
Mobile apps have become an absolutely massive business in just a few years, and sometimes it can be difficult to truly grasp how fast the industry is growing. This little tidbit, courtesy of Asymco's Horace Dediu, is a great data point to help put it in perspective: In 2014, iOS app developers as a whole made more money than the movie industry did off of box office receipts. According to Apple's latest brag rag, the company paid out a whopping $10 billion to app developers last year which puts it a good deal above Hollywood's box office earnings for the same time period. Based on Apple's 30 percent "take" of each app sale, that puts App Store billings at about $14.3 billion. It's important to note that box office intake doesn't accurately capture the entirely of the Hollywood economy, which extends to retail sales, streaming, licensing, and many other revenue-generating products and services. But as Dediu points out, Apple's payout is only a portion of the overall app economy as well, and when you add competing platforms, licensing for products, and other revenue to the top, apps are likely still bigger than the overall Hollywood picture. [Image via Asymco]
How do launch numbers for iPhones and Samsung Galaxy S phones compare?
Some rivalries will never die -- chocolate vs peanut butter, Yankees vs Red Sox, and iPhone vs Android, just to name a few. With the announcement of the iPhone 6 and iPhone 6 Plus, many Android users took to the Internet to loudly exclaim how underwhelmed they were by the devices. Its new features were things they'd already had for years, except for all the ones that weren't, of course. Rivalries are fun, but the musings of voices on the Internet aren't nearly as important as the voices of the buying public. And when you compare the launch numbers of various Samsung Galaxy S phones to the iPhone 6 and earlier iPhones, there's absolutely no competition. This morning, Horace Dediu of Asymco Tweeted out a detailed chart documenting the launch performance of various iOS and Samsung Galaxy S phones. The numbers speak for themselves. For perspective, the iPhone 6 preorder beat every noted model of the Galaxy S by millions of units, even though the Galaxy S numbers take into account the first month or more of sales while the iPhone numbers are usually after just a handful of days. Here's that chart:
If Apple's iTunes division was a standalone company
Delving deep inside Apple's quarterly earnings report, Horace Dediu of Asymco writes that revenue from Apple's iTunes/Software/Services group increased by 34 percent year over year. Indeed, as we pointed out earlier, revenue Apple derived from its iTunes, Software and Services segment was responsible for 7.6 percent of Apple's entire quarterly revenue last quarter. Dediu also approximates that gross revenue from this segment now results in upwards of US$7 billion per quarter for Apple's ever-growing bank account. Things get really interesting when we measure up Apple's iTunes, Software and Services segment to other Fortune 500 companies and Google's search business in particular. Dediu writes: To illustrate this, I plotted the history of gross iTunes revenues vs. Google's search business. On a yearly basis iTunes/Software/Services is nearly half of Google's core business and growing slightly faster. The iTunes "empire" of content and services would be ranked as number 130 in the Fortune 500 ranking of companies (slightly below Alcoa and above Eli Lilly). A commentor on Asymco also highlights how massive Apple's iTunes operation is on a standalone basis, pointing out that iTunes "generates almost 5x the profit" that Amazon does on "less than 1/3 of the revenue."
How smartphones mean 'game over' for consoles, portable game systems
If there's one Wall Street analyst who consistently makes sense when it comes to computing and mobility, it's Asymco's Horace Dediu. On a regular basis, Dediu charts the sales and shipping information released by consumer electronics companies like Apple and is able to spot trends that spell either good fortunes or a bleak future for the firms in question. Today's target was the gaming console companies, with Dediu's analysis showing how mobile devices -- specifically smartphones and tablets -- spell doom for sales of gaming consoles. Didiu's numbers take a look at data from just two of the big three -- Nintendo and Sony -- as Microsoft does not provide sales information for Xbox. That confetti-like chart at the top of this post shows the bad news for Nintendo. Not only are sales of the latest console (Wii U) tanking, but the two portable gaming units -- 3DS and 3DS XL -- are also showing a precipitous dive towards irrelevance. Add in Sony's numbers (above) and the picture is the same -- for consoles and portable gaming devices, the peak year in sales was in 2008, five years ago. What's the difference? The huge influx of smartphones and tablets, all very capable gaming devices on their own. Dediu sums it up perfectly in his final paragraph: The implications are that Nintendo, Sony and Microsoft are beyond the point of no return in this industry. Gaming, as a business, cannot be sustained as a platform independent of a general purpose computer. Like other "applications" that used to have systems built around them conforming to their needs, the dedicated-purpose solutions came to be absorbed into the general-purpose platforms. And the modern general purpose computer is the smartphone.
Daily Update for June 14, 2013
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Half a million iTunes accounts are created each day
Asymco's Horace Dediu points out that, on average, over half a million iTunes accounts are being created each day. At WWDC this week, Tim Cook announced iTunes has 575 million accounts. Horace Dediu took that figure and calculated it with previous iTunes membership milestones to find the average number of new iTunes accounts created daily. If Dediu's trend continues, iTunes will add another 100 million account holders this year. If it holds for three years, iTunes will have more account holders than Facebook by 2017. That is, of course, only if Facebook doesn't continue to add accounts, which it probably will. These numbers still demonstrate just how large iTunes is. If iTunes were an actual social network, it would be second only to Facebook and larger and Twitter and LinkedIn.
Daily Update for May 20, 2013
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Asymco's Horace Dediu touts record Apple Store revenues in Q1 2013
Asymco mobile industry analyst Horace Dediu is up to his number-crunching again, this time with numbers showing that Apple Stores continue to have the top retail revenues per visitor of any retailer in the US. The first quarter of 2013 (Apple's second fiscal quarter) saw visitor growth of 7 percent and a new record revenue of US$57.60 per visitor. Average revenue per store was $13 million, a record-setting level for a non-holiday quarter. Dediu noticed that the average visitors per store has steadied out at about 250,000 per store per quarter, and posits that number might be stagnant because fire regulations keep the stores from packing in even more visitors. Apple's employment in stores has increased as well to about 110 employees per store, climbing from less than half that level in 2007. Apple's new retail strategy appears to be expanding US stores in size and opening new stores outside of the US. According to Dediu, that allows for growth in the number of visitors to the US Apple Stores and in "maintaining the brand's relationship with customers."
A historical explanation of Apple's recent margin erosion
Apple's share prices have been dipping in recent months as analysts have predicted the company's pace of remarkable growth is starting to slow. At their all time high Apple margins were at 50%, but in the most recent quarter they had shrunk to 37.5%. So why exactly is Apple's margin shrinking? Asymco analyst Horace Dediu has posted an interesting examination of Apple's margins since 2005 to find the reason for their recent reduction. When his prediction that the company's margins would improve in quarter four of 2012 proved false, Dediu looked at the data to see what went wrong. His analysis takes into account the three major factors effecting margin changes for Apple: price changes, cost of components, and a mix of high and low margin products. Dediu discovered it largely comes down to the iPhone, Apple's top selling product. While sales and the asking retail price of the iPhone have remained consistent over the years, the cost of components increased by 29% in 2012 over the previous year. This had the effect of cutting the iPhone's gross margin from 58% to 48%. The iPhone 5 is more expensive to make, and therefore currently has a lower margin. iPad margins also decreased, though it Dediu notes that the asking retail price of the product also decreased in the time period. Ultimately he reasons that the increased cost of components is the main cause for the margin reductions. As the mobile markets expand in developing nations like India and China Apple will face more pressure to keep their products affordable. The popularity of recent trade in programs in India for the iPhone 4 shows there is market desire for the products. Perhaps the reduction in margin due to the cost of making the iPhone 5 will help make the much speculated about "budget iPhone" a reality. Head over to Asymco for Dediu's complete analysis, including comparisons with Apple's competition at Microsoft and Google.
Apple sells 5% of PCs world-wide, makes 45% of the profit
Talk to people who are PC fans and they'll point out that while Apple controls the smartphone market in many respects, the company still only has a small fraction of the global PC market. But as Horace Dediu at Asymco points out, any other PC maker in the world (like Dell, HP or ASUS) would kill to have Apple's share of the PC market if it meant also getting Apple's share of the profits. You see, while Apple only owns 5 percent of the world-wide PC market, they make 45 percent of the profit. As you can see from the chart above, the next largest single-player profit share of the market is Dell, which gets a measly 13 percent. As Dediu explains, "The real problem for the PC vendors is not that they have such low margins -- they've had low margins for decades. It's that the volumes which 'made up for' low margins are disappearing." Those disappearing volumes are largely due to increased sales from smartphones and tablets like the iPad. Speaking of the smartphone market, Dediu says that Apple owns a whopping 72 percent of profits across all mobile phone sales. [via Apple 2.0]
A look at Apple's international retail strategy
Asymco analyst Horace Dediu does a very good job of dissecting the Apple financial data released publicly to discover trends and tidbits of information. Today Dediu looked into Apple's international retail strategy and pulled out some tasty nuggets about Apple Stores. Apple's rate of store openings is surprisingly slow, but Dediu goes on to point out that sales outside of Apple's retail channel are a much higher portion of the total than they were in 2007. The percentage of sales from Apple Stores has actually dropped from 17 percent in 2007 to 12 percent in 2012. Dediu points out that while, currently, most Apple Stores are in the Americas, the company's strategy is to open more stores in other markets. Whereas almost 80 percent of store openings in 2007 were in the US, that number shrunk to about 15 percent in 2012. Dediu notes that, "It would seem reasonable therefore to expect that the priority for most, if not all, future openings should be outside the US to address the current sales/retail presence imbalance and to accomodate the bulk of future growth."
Daily Update for January 10, 2013
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Asymco breaks down the App Store numbers, finds iTunes economy is a $12 billion annual business
While corporations -- including Apple -- keep financial information locked away except for those items that require public disclosure, the job of Wall Street analysts like Horace Dediu of Asymco is to take bits of information scattered hither and yon and meld them into a more realistic model of how a company is performing. Dediu took App Store numbers released on January 7 by Apple, mixed it with existing info, and came to some fascinating conclusions: The iTunes economy defined as gross revenues transacted through it is now about US$12 billion/yr. Over the last five years content owners (media and app) received a total of $24 billion while Apple spent about $10 billion to create those sales Seen as a retail business, iTunes costs about $3.5 billion/yr to operate. This includes merchandising, payment processing and "shipping & handling." Total revenues have risen steadily in a range of 32 to 38 percent compounded over the last four years. Apps are now a third of all iTunes revenues, (about $4 billion/yr) having taken that share in only 4.5 years. Non-app media still make up two-thirds of iTunes in terms of sales value but their growth is now 28 percent vs. about 50 percent for apps. Those results, taken directly from Dediu's post, show that sales of traditional media -- movies, TV, books and music -- are growing at about half the rate of apps. They also highlight that the sale of media and apps is a vibrant part of Apple's financial picture.
Visualized: Apple and Samsung occupy the 99 percent... of phone profits
Financial maven and maker of beautiful graphs Horace Dediu has found that between the top eight mobile phone vendors, Apple and Samsung share 99 percent of the total spoils. Of RIM, LG, Sony (Ericsson), Motorola, Nokia and HTC, only the latter made a profit -- claiming that left over one percent. The remaining six all recorded losses for the quarter, Mr. Deidu adding that several of those companies are carrying feature phone businesses that they should shed before they become an albatross around their neck.
Apple and Samsung earn 99 percent of mobile phone vendor profits
While the two big smartphone vendors, Apple and Samsung, are battling it out in the courtrooms, they're still in total control of operating profits. Horace Dediu of Asymco has just published his analysis of operating profits for the top eight mobile phone vendors and found that Apple and Samsung together pulled in 99 percent of the profits in the first quarter of 2012. Apple had the largest share of that total, with a full 73 percent of the profits made by the top mobile phone vendors. Only Apple, Samsung, and HTC made a profit in the first quarter of 2012, and HTC's share was a tiny 1 percent. The other companies on the list -- Motorola, Nokia, RIM, LG, and Sony Ericsson -- all had losses for their handset businesses. Apple and Samsung are reaping the benefits of being the top vendors in the lucrative and growing smartphone business. Profits from the eight top vendors detailed in Dediu's report have gone from US$5.3 billion to $14.4 billion, primarily from carrier subsidies on pricey smartphones. [via MacRumors]
Daily Update for April 3, 2012
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Google reportedly makes more per iOS device than Android device
According to Horace Dediu of Asymco, Google's smartphone revenue per year is on the rise. On the surface, this appears to be good news for Android, but a closer look at the source of the revenue shows that most of this increase is from iOS. In fact, Deidu suggests revenue per device from Android is slightly declining. If you are wondering, Google is making money because of its prime placement as the default search engine on the iPhone and iPad. Dediu also notes that though the Android platform is sustainable from an economic point of view, Google is only getting US$1.70 annually per device, while Apple is making over $576 per iPhone sold. You can read his post on Asymco's website and comment on his analysis.
Can the iPad sustain its incredible yearly growth?
Horace Dediu of Asymco examined the history of Apple's iPad sales since 2010 and calculated that its grown at an astonishing rate of 150 percent each year. Based on Apple's stellar iPad launch weekend, Dediu believes this phenomenal growth is sustainable. As Philip Elmer-DeWitt points out, Dediu goes above Wall Street's current consensus and predicts Apple will sell 12.2 million tablets by the end of this quarter. [Via Fortune's Apple 2.0]
63% of last quarter's iPhone activations were outside the U.S.
Horace Dediu, analyst and financial blogger at Asymco, provided several fascinating charts at the end of last week that not only show how dramatically iPhone activations have increased over time, but also how the U.S. market makes up a shrinking portion of that overall market. As Apple 2.0 editor Philip Elmer-Dewitt noted in an analysis of Dediu's numbers, "The U.S. is becoming a progressively less important market for sales of Apple's most valuable product line." While the chart above shows that the percent of iPhone sales outside of the U.S. actually fell during the last quarter, this trend should reverse in the near future. It's expected that Apple will report another sharp increase in international sales after this quarter is complete, since there has been unprecedented demand for the iPhone 4S since it went on sale in China last month. The emphasis on the international sales numbers doesn't mean that the U.S. market is by any means saturated with iPhones. In fact, the chart below shows just how much iPhone activations rose during the last quarter of 2011 in the U.S. alone. The increase in the worldwide activation numbers is just as staggering.
Apple rollin' in the dough: 75% of cell phone profits
The news just keeps getting better for Apple in the mobile phone business. Just yesterday, IDC reported that the company is in third place in terms of worldwide mobile phone sales. Today, Asymco analyst Horace Dediu announced that with a relatively small piece of the pie (IDC said 6 percent of market, Dediu says 8.7 percent), Apple is pulling in a whopping 75 percent of profits in the industry. Philip Elmer-DeWitt at Apple 2.0 notes in an analysis of Dediu's numbers that out of the top eight manufacturers, only five are showing meaningful profits. Samsung has about a 16 percent profit share, while "Nokia, Research in Motion, and HTC are just scraping by. Motorola, LG and Sony, which bought out Ericsson last month, are still in the red." As Elmer-DeWitt points out, this is for all mobile phones, not just smartphones. And these numbers are for the worldwide market, not just the United States. He concludes that "This doesn't bode well for the manufacturers who have hitched their wagon to Google's Android or Microsoft's Windows Mobile 7."
