Was iPhone More Profitable Than Nokia Handsets Last Quarter? — Blog vs. Blog!
Last week we covered the analyst accounts that Apple’s iPhone was more profitable than Nokia’s handsets. Since Apple makes high margin on one premium phone, while Nokia has a range of featurephones and smartphones, including low-to-no margin ones, it didn’t seem too unlikely. Joe Wilcox, however, broke out his abacus and begged to differ, saying no they weren’t, and everyone was stupid for thinking they were. John Gruber then tapped Calculator on his iPhone, looked at GAAP (Generally Accepted Accounting Principles) and non-GAAP numbers, and said the estimates were within reason. Wilcox updated his original post, decrying the use of non-GAAP numbers, and re-asserting his original conclusion.
Who’s side are we on? Why, the audiences’ of course, with popcorn, hotdogs, and spicy drink in hand. It’s not like either Apple or Nokia give us a cut of the winning profits, and though we love our iPhones a lot, we’ll take a blog v.s blogfight any time.
[via TUAW]
November 16th, 2009 at 11:00 am
Do we have apple or nokia shareholders here?
November 16th, 2009 at 11:14 am
Meh. Though I love Gruber, strictly speaking, Wilcox is correct and Gruber is wrong. According to SEC filings, Apple lags a little behind Nokia. If you you spin deferred earnings as Gruber did — not unreasonable, since Apple has that money in hand, despite their accounting practices, you can make a case Apple is more profitable. However, as Wilcox points out, if you do that for Apple, you need to do that to other companies that defer balances over quarters, or the comparisons are meaningless. Since the only level comparison playing field we have are the GAAP numbers with the IRS (and its cohorts in other countries) as the referees, I get to mix my metaphors, and Wilcox wins by TKO.
But so what? Apple made a ****load of money, and Nokia made slightly more. Both companies should be pleased, though Nokia has more to worry about, defending its position. With the momentum Apple has, and the gift cachet of many of its products coming into the holiday season, the results may differ next quarter.
November 16th, 2009 at 11:22 am
At least this show is far less insulting than ‘2012′–ugh!
Glad I didn’t pay to watch that, but it even hurt for free.
November 16th, 2009 at 11:27 am
Who really cares?
November 16th, 2009 at 11:41 am
@Dev
You really have to have the anti-Apple blinders on to think that Joe Wilcox won this argument.
Pathetic, as usual.
November 16th, 2009 at 11:56 am
From a non-accounting standpoint, lol. It only makes sense that Apple would have the higher “profit”. Apple keeps most of it’s technologies in house. SO therefore less licensing fees and such. Less money to payback after sales. More money to keep.
Nokia on the other hand has 50 gazillion different phones and licensing fees and all that other stuff. They have more to pay back.
If you look at the original post of the actual “Apple has higher net profit” article…Nokia DID in fact rake in more money…just after all the expenses, the profit was a tiny bit less than Apple’s.
It’s only to be expected. Apple makes a smart move by making the device mostly an in house device.
November 16th, 2009 at 12:10 pm
I do agree that it’s not a fair comparison using non-GAAP numbers, since you are counting money deferred from previous quarters AND counting money that is deferred to future quarters. It’s double dipping.
However, it’s a waste of time to consider. If it gives Apple fanboys a warm tingly feeling to know that Apple made eleventy billion dollars while they are skipping meals to buy a new Macbook, then I say “Hippie, get a life!”
November 16th, 2009 at 12:36 pm
The guy on the right looks like he belongs in the “Turtle Club”.
November 16th, 2009 at 1:21 pm
I see the haters are out in force (Dev, iDavey and JoeMcG) – looks like those numbers sure are important to them.
November 16th, 2009 at 1:29 pm
@Mystic
How am I hating? My post was in favor of Apple. LMAO.
All that matters is the profit. Apple indeed had the higher profit because of better business decisions.
So tell me…how am I hating?
On second thought, just sit down sir. Please…sit down. And if you’re sitting down. Just log off.
November 16th, 2009 at 1:53 pm
Yes, sit down sir. And will the real slim shadey please stand up?
November 16th, 2009 at 3:26 pm
It’s perfectly plausible that Apple earned more profit than Nokia. Apple has enough cash to buy Dell. Poor Nokia and Dell!
November 16th, 2009 at 3:56 pm
@mystic
Wow. Cogent, well-thought out argument as usual. I am sorry that, despite pro-Apple comments in every sentence of my post, I had to concede that by strict accounting rules that both companies abide by, Apple came out slightly behind Nokia in a single quarter. I even tried to cushion the blow to your worldview by saying that it did not matter, and that Apple would likely come out ahead in Q4.
Obviously, that was not enough, and now, I am truly, deeply sorry that your self-image is so tied up in only sunshine and lollipops radiating both to and from Cupertino that you cannot accept even the barest hint of slightly off-positive news. Please accept my, and reality’s, heartfelt apologies.
November 16th, 2009 at 5:11 pm
@Joe McG
The Non-GAAP will be the GAAP sometime next year.
And absolutely not, Apple’s non-GAAP financial statement is NOT double dipping. Non-GAAP only account the whole sales of the current accounting period. Any differing from previous sales is excluded.
Also Nokia don’t use GAAP, ergo naturally its number is always Non-GAAP so to speak.
November 16th, 2009 at 5:25 pm
@dev
Joe Wilcox didn’t argue the difference between accounting rules at first. He simply scoffs the well reported 1.6B operating profit by stating Apple’s GAAP net profit was 1.67B therefor it is impossible.
And he went on and claim all but himself “lack of fact checking” only hours later got totally owned by John Gruber and Turley Muller.
I don’t know why am I so riled up about it. I’ve long abandoned Betanews.
Guess I just hate certain tech pundits like Joe Wilcox, and Robert Scoble, and Michael Arrington, and of course Rob Enderle.
November 16th, 2009 at 7:16 pm
@Dev
Wilcox was wrong, and your attempts to justify his “reasoning” are just as lame.
@iDavey
I was wrong about your post, but not about you. Apologies for the former, not for the latter.
November 16th, 2009 at 9:47 pm
@arsenekarl
GAAP or not, Nokia does not report deferred income, therefore the most fair apples to apples comparison is (snicker) to use Apple’s numbers that follow those same rules. As fir accounting rules changes next year, ok, great for Apple, and we can discuss those rules next year. For Pete’s sake, I even predicted Apple would “win” even if the rules remain unchanged as early as next quarter. It boggles the mind people are getting so worked up over a completely meaningless comparison.
@mystic
if you want to have a reasonable discussion, actually, I dunno, discuss the points in question, like arsenkarl. Or just lead with irrelevant ad hominem attacks without any underlying thought or consideration, as you typically do. Just don’t be surprised when the grown ups return in kind and tell you to return to your playpen.
November 16th, 2009 at 9:54 pm
@ArseneKarl
It is amazing that even a single person still listens to Enderle after his “Ferarri branded laptop” piece
November 16th, 2009 at 10:04 pm
@Dev
It boggles MY mind that you have nothing better to do than hang out on this forum and peddle anti-Apple, anti-iPhone propaganda day in and day out – ad nauseum.
Get a life.
November 17th, 2009 at 12:06 am
@ArseneKarl — sorry for mispelling your handle in #17 — was posting from my iPhone and did not scroll up to double check before hitting submit No offense intended.
@mystic
4 posts, 4 ad hominem attacks on 3 posters, and nothing at all to say about either of the articles Rene linked, or any content from commenters.
Thanks again for proving my point. Next time, you might find it rewarding to make just one of your own.
November 17th, 2009 at 12:18 am
@Dev
I’ve made the point I wanted to make, thanks. It was about you and all the other tiresome iPhone bashers like you.
Oh, and you might want to check on the PRECISE meaning of “ad hominem”. You seem to be very fond of it, so it could come in handy in future.
November 17th, 2009 at 12:35 am
@mystic
When you take shots, at least do 30 seconds of legwork. Definition #2 on http://tinyurl.com/m3cu3e
“attacking an opponent’s character rather than answering his argument.”
Fits you to a tee. Handy in the future, handy now.
Now, a simple way to avoid an ad hominem accusation is to discuss why you think Wilcox’s arguments are bunk, or what exactly about post #2, ending in
“With the momentum Apple has, and the gift cachet of many of its products coming into the holiday season, the results may differ next quarter”
was so patently anti-Apple. That would be engaging in a polite disagreement/discussion, like I have with @ArseneKarl here or @Matthew on earlier threads, and others. Care to start over on any of those points? I’ll gladly discus any of the substance of Rene’s linked articles, or post #2 where I started.
Otherwise, sorry, but when every single one of your posts fails to address a single point of content, but shouts down people as “haters” who need to “get a life”, yes, all you have are ad hominem bleatings.
November 17th, 2009 at 12:44 am
Do I care if the Fish’n'Chip shop I buy from had a larger net or gross profit than the other one down the road?
Not really.
November 17th, 2009 at 2:55 pm
You still don’t get it, do you Dev?
November 17th, 2009 at 8:50 pm
I get it perfectly. I stated a position, as did other. You started out called names, and never stopped. If you want to argue any specific points in my post #2, or in the linked articles, we can start over and have a pleasant discussion. You may learn something. Heck, I may learn something. I don’t mind being proven wrong, as long as there is some fun back-and-forth leading up to it. I even directly restated the relevant points in post #22 for you. If you are up for it, so am I.
If, however, you prefer to just call names, make comments, and yes, make ad hominem attacks (you could look it up too, you know) just to shout down people with different views, well, that is not as much fun for anybody, but I suppose I have enough time to waste responding to you, if it will curb this sort of childishness in other threads.