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Apple will be larger than IBM, says analyst

Apple will be larger than IBM, says analyst

Growth in the app market is fuelling the need for hardware, which in turn increases demand for apps.

Cupertino-based fruity gadget merchant Apple is set to become a $200 billion revenue company by the end of 2012, making it even bigger than IBM, according to George Colony, founder and CEO of Forrester Research Inc.

Speaking to Bloomberg at its HQ in New York, Colony pointed out that the relationship between Apple's hardware and the app market is symbiotic; demand for apps drives demand for hardware, which in turn drives more demand for apps.

Apple saw sales rocket by 52 per cent last year, mainly off the back of its popular iPad and iPod products, but it’s not physical hardware sales that's likely to maintain Apple in the long run, says Colony.

It’s instead the lucrative app market that will maintain Apple’s dominance in the years to come, as it will slowly come to account for more of the company's bottom line.

All of which could mean that Apple’s run of record financial results isn't likely to end any time soon. 'They’ll be bigger than IBM next year,' says Colony, adding that 'they’ll be bigger than HP the year after that.' In terms of sales, this would make Apple the largest tech company in the world.

Is Apple's winning streak likely to continue, or is it only a matter of time before it drops the bright green ball? Let us know your thoughts in the forums.

33 Comments

Discuss in the forums Reply
Mankz 25th March 2011, 08:56 Quote
Just go away and die Apple. I'm already bored of you.
Snips 25th March 2011, 09:56 Quote
Yes I'm not Apples biggest supporter here but I do fear for the direction of the company after Steve Jobs.
wuyanxu 25th March 2011, 10:00 Quote
so when will Orange rise up and do a commercial like this, to Apple:
OYecfV3ubP8


i'll get my coat.
Boogle 25th March 2011, 10:07 Quote
The app store adds a lot of revenue for Apple, but the profit it brings in is tiny. They make all their actual money from selling the hardware.
danielg 25th March 2011, 10:16 Quote
IBM? LOL!
What about Exxon Mobile?
will_123 25th March 2011, 10:36 Quote
As much as i don't like how apple operate they are a good business and know how to market their products well.
mclean007 25th March 2011, 10:48 Quote
Quote:
Originally Posted by Boogle
The app store adds a lot of revenue for Apple, but the profit it brings in is tiny. They make all their actual money from selling the hardware.
Woah! Stop right there. Apple takes 30% of every sale on the App Store, including through the new subscriptions features. As these are third party apps that have cost Apple nothing to produce (other than perhaps the relatively small cost of validating apps and adding them to the app store) and the marginal cost of delivering an app is effectively nil, that 30% is basically pure profit.

If you use an iPad as an e-reader (as many do), then Apple gets 30% of every book you buy and of the subscription price of any newspapers and magazines you receive through it. Not sure what the figure is but they also take a healthy chunk of every song you buy, every movie you buy or rent, and 30% of every app. For a company that isn't actually responsible for generating any of this content, that's a frankly amazing deal.

In case you hadn't noticed, Apple recently announced it has delivered over *10 BILLION* apps. In the space of - what? - a couple of years? And the rate of app downloads is only going to increase as the installed base of iOS devices grows and the library of apps expands. Granted many of the 10 billion apps "sold" will have been free, but Apple could sell iPhones and iPads at breakeven or even at a loss and still make a fortune out of the whole ecosystem, thanks to music, video, books and apps sold through the iTunes Store.
dyzophoria 25th March 2011, 10:49 Quote
Apple will grow in the mobile app department and at sometime will ease out/level out the mobile app department, while another (*cough *cough *Android), continues to grow aswell, that's how it always been, just add a few die hard fanatics to apple and you are set, that's the only thing diff,lol
mclean007 25th March 2011, 10:49 Quote
Quote:
Originally Posted by danielg
IBM? LOL!
What about Exxon Mobile?
Um, I dunno, I give up. What about Exxon Mobil? What's your point?
mclean007 25th March 2011, 10:51 Quote
Quote:
Originally Posted by Mankz
Just go away and die Apple. I'm already bored of you.
Wow! Nice vitriol. If you're bored of Apple, just ignore it and its products. Lots of people (me included) happen to rather like them.
danielg 25th March 2011, 10:57 Quote
Quote:
Originally Posted by mclean007
Quote:
Originally Posted by danielg
IBM? LOL!
What about Exxon Mobile?
Um, I dunno, I give up. What about Exxon Mobil? What's your point?

They could be larger apple
antiHero 25th March 2011, 11:02 Quote
Quote:
Originally Posted by mclean007
Wow! Nice vitriol. If you're bored of Apple, just ignore it and its products. Lots of people (me included) happen to rather like them.

Problem is you cant ignore them. The whole "In your Face!!!" marketing makes it very hard to not get pissed of by them. Plus all apple hipsters in my Uni keep reminding me why I dislike apple.
beckoner 25th March 2011, 11:20 Quote
Quote:
Originally Posted by antiHero

Problem is you cant ignore them. The whole "In your Face!!!" marketing makes it very hard to not get pissed of by them. Plus all apple hipsters in my Uni keep reminding me why I dislike apple.

From this, am I to take it you don't like the kind of people who use Apple products and then tell everyone around them how good they are? Would this be a subconscious reaction to products that enable tech-illiterates to operate in an increasingly complex environment, leaving the tech-warrior feeling that his edge is somehow being blunted?
AcidJiles 25th March 2011, 11:38 Quote
Well at least we have been given warning that the end is nigh.
WarrenJ 25th March 2011, 11:43 Quote
How about STFU and ignore it. The only person your annoying is yourself. I don't have any apple stuff, purely due to functionality, my notebook does so much more. But I have to admit, the iPad and iPhone are polished products and their marketing is brilliant.

For 95% of computer users, they're great products.
AcidJiles 25th March 2011, 11:46 Quote
Quote:
Originally Posted by WarrenJ
How about STFU and ignore it. The only person your annoying is yourself. I don't have any apple stuff, purely due to functionality, my notebook does so much more. But I have to admit, the iPad and iPhone are polished products and their marketing is brilliant.

For 95% of computer users, they're great products.

rofl at that response
Picarro 25th March 2011, 11:52 Quote
Quote:
Originally Posted by mclean007
Woah! Stop right there. Apple takes 30% of every sale on the App Store, including through the new subscriptions features. As these are third party apps that have cost Apple nothing to produce (other than perhaps the relatively small cost of validating apps and adding them to the app store) and the marginal cost of delivering an app is effectively nil, that 30% is basically pure profit.

If you use an iPad as an e-reader (as many do), then Apple gets 30% of every book you buy and of the subscription price of any newspapers and magazines you receive through it. Not sure what the figure is but they also take a healthy chunk of every song you buy, every movie you buy or rent, and 30% of every app. For a company that isn't actually responsible for generating any of this content, that's a frankly amazing deal.

In case you hadn't noticed, Apple recently announced it has delivered over *10 BILLION* apps. In the space of - what? - a couple of years? And the rate of app downloads is only going to increase as the installed base of iOS devices grows and the library of apps expands. Granted many of the 10 billion apps "sold" will have been free, but Apple could sell iPhones and iPads at breakeven or even at a loss and still make a fortune out of the whole ecosystem, thanks to music, video, books and apps sold through the iTunes Store.

So all the server infrastructure, and the 10th's if not 100th's of people it takes to keep the Appstore going on a day to day basis are working for free?


Wait wut?
will_123 25th March 2011, 12:42 Quote
Problem is you cant ignore them. The whole "In your Face!!!" marketing makes it very hard to not get pissed of by them. Plus all apple hipsters in my Uni keep reminding me why I dislike apple.

I would its anything but "in your face" its subtle,simplistic and clever marketing. People like apple for different reasons i love my macbook pro and think its one of the best investments i have made. I love the OS it looks good and its unix based dont know what else i would ask for?
Almightyrastus 25th March 2011, 12:57 Quote
Quote:
Originally Posted by will_123
Problem is you cant ignore them. The whole "In your Face!!!" marketing makes it very hard to not get pissed of by them. Plus all apple hipsters in my Uni keep reminding me why I dislike apple.

I would its anything but "in your face" its subtle,simplistic and clever marketing. People like apple for different reasons i love my macbook pro and think its one of the best investments i have made. I love the OS it looks good and its unix based dont know what else i would ask for?

Spot on, Apple's marketing people are very good at what they do. Look at the ipad 2 release in the UK today. That goes on sale at 5pm this evening rather than first thing in the morning. That gives all day for the queues to build up to massive proportions. To the sort of levels where the media will be reporting on how many people are 'lining up to get their hands on the new iPad 2'.

The result, massive amounts of additional, country-wide marketing that Apple have not had to pay a penny for
chocolateraisins 25th March 2011, 14:16 Quote
Will we soon have to speak in L33tsp34k because apple has copyrighted every single word for a product?
Boogle 25th March 2011, 14:18 Quote
Quote:
Originally Posted by Picarro
So all the server infrastructure, and the 10th's if not 100th's of people it takes to keep the Appstore going on a day to day basis are working for free?


Wait wut?

^This.

The MS App Store lets devs upload 5 free apps, and unlimited paid apps for this reason. If you've already got 5 free apps in the store you have to pay $19.99 to upload another free one.

More info on Apple's profit margin with the store here: http://www.fastcompany.com/1663012/app-store-apple-profits-1-android-marketplace-smartphones-iphone
VipersGratitude 25th March 2011, 16:54 Quote
Quote:
Originally Posted by will_123
I love the OS it looks good and its unix based...

I was thinking...If I had a company who sold a proprietary Unix-like OS, and there was another massively popular Unix-like OS that was open source, I could save a lot of money on R&D by looking at the best open source implementations of software and refactoring the syntax, as the semantics would remain more-or-less the same.

Now, some might call that stealing, but that wouldn't stand up in court because my kernel is different, negating the "Standard Interface" definition of a GNU license. I bet if I did that I could get my company a reputation for innovation.

Just sayin'
imnottrolling 25th March 2011, 18:19 Quote
Awesome I can't wait to use Apple's new ruggedized blade server chassis and fibrechannel SANs! Oh wait, they don't deal with that sector? So just another case of clueless analysts comparing Apples to Oranges (no pun intended)?
HourBeforeDawn 25th March 2011, 18:39 Quote
Isnt it Ironic that Steve started Apple as a way to fight and be Anti-Big Blue (IBM) and be for the people and look at him now screwing over more people and being more monopolistic then IBM ever was... ~_~
greypilgers 26th March 2011, 21:14 Quote
It would seem that in a fairly significant proportion of people, they like the 'underdog' company but when 'the boy done good' they get all negative and 'conspiracy-theory' about them. Whether you like to use their products or not, Apple have been very successful and I don't see why you can't at least have respect for a determined company who have succeeded in their business model. I don't own any Apple products othern an an iPod nano, and have no intentions to either, but I respect their growth and market dominance. If their products really weren't much cop, no amount of marketing would be able to hide it for ever, I suppose.
HourBeforeDawn 26th March 2011, 22:52 Quote
Quote:
Originally Posted by greypilgers
It would seem that in a fairly significant proportion of people, they like the 'underdog' company but when 'the boy done good' they get all negative and 'conspiracy-theory' about them. Whether you like to use their products or not, Apple have been very successful and I don't see why you can't at least have respect for a determined company who have succeeded in their business model. I don't own any Apple products othern an an iPod nano, and have no intentions to either, but I respect their growth and market dominance. If their products really weren't much cop, no amount of marketing would be able to hide it for ever, I suppose.

watch the documentary turned movie; Pirates of Silicon Valley and then watch MacHeads "Documentary of Mac Fans" and it will pretty much show you how rotten of a company Apple is. Thus my attitude towards them among other reasons and backing and so forth. I dont hate the products, I hate the man and business practices.
greypilgers 27th March 2011, 02:42 Quote
Quote:
Originally Posted by HourBeforeDawn
watch the documentary turned movie; Pirates of Silicon Valley and then watch MacHeads "Documentary of Mac Fans" and it will pretty much show you how rotten of a company Apple is. Thus my attitude towards them among other reasons and backing and so forth. I dont hate the products, I hate the man and business practices.

Ha ha ha! Forgive me, as I must confess I haven't seen those programs, but the sensationalist titles like 'Pirates of Silicon Valley' tend to suggest that there may not be objective reporting involved... Unfortunately it is always the way that when someone or something gets very successful and powerful, those around try to knock it off its perch and bring it down. I cannot think of very many large and successful entities that don't have a significant number of detractors, yet I can think of very very many that do. Apple are not unique in many of the things they do, and if they did not operate as a leader, someone else would and this thread would be about them instead. This is the way of things.

:D
ObeyTheCreed 27th March 2011, 10:54 Quote
I'll believe that, the apps are the only thing that even make the Ipod, Ipad, etc. even worth getting. I mean, the OS is basically the same as windows, and yes i do know that safari is a completely different browser than explorer but what is actually different between firefox, explorer, and safari besides the code? Anyway, the casing scratches reaaaaaally easily, i mean like seriously i dropped my Ipod Touch one time and it had 5 scratches in the back, my phone has been through hell and doesn't have a scratch -.- Another thing is that they just aren't really that useful, i mean you have the android which is touch screen, the original ipods with the mass amounts of memory, and don't even get me started on the battery life. If you don't turn anything on and the brightness lvl is way down then sure it will last 9-10 hours. If notifications, bluetooth (totally useless feature btw) or any other thing is turned on (or in the case of brightness, turned up), including apps. Your battery life is about to sh*t itself. So with that said yes i could believe that Apple is making a ton of money off the apps but those are really the only thing that make the ipod and ipad so popular.
kempez 27th March 2011, 17:26 Quote
Quote:
Originally Posted by HourBeforeDawn
Quote:
Originally Posted by greypilgers
It would seem that in a fairly significant proportion of people, they like the 'underdog' company but when 'the boy done good' they get all negative and 'conspiracy-theory' about them. Whether you like to use their products or not, Apple have been very successful and I don't see why you can't at least have respect for a determined company who have succeeded in their business model. I don't own any Apple products othern an an iPod nano, and have no intentions to either, but I respect their growth and market dominance. If their products really weren't much cop, no amount of marketing would be able to hide it for ever, I suppose.

watch the documentary turned movie; Pirates of Silicon Valley and then watch MacHeads "Documentary of Mac Fans" and it will pretty much show you how rotten of a company Apple is. Thus my attitude towards them among other reasons and backing and so forth. I dont hate the products, I hate the man and business practices.

Watched them both ages ago, interesting stuff.

Pirates of Silicon Valley portrays Steve as a bit mental, but makes Bill the big bad guy who stole every idea he ever had. Not seen anything in there to hate him though.

Big companies and the people who run them are all massively driven (to the point of corruption in cases), in some way. Apple are no different, but I suspect there's a story behind every big company, including Google and others.

As for Apple being larger than IBM, I do see the irony seeing as how IBM was always the sinister 'Big Brother' character. It's not a surprise now though, IBM are severely outdated and need to do something about that pretty sharpish as they're losing hold of a lot of market segments.
yakyb 28th March 2011, 10:41 Quote
Quote:
Originally Posted by Boogle

The MS App Store lets devs upload 5 free apps, and unlimited paid apps for this reason. If you've already got 5 free apps in the store you have to pay $19.99 to upload another free one.

More info on Apple's profit margin with the store here: http://www.fastcompany.com/1663012/app-store-apple-profits-1-android-marketplace-smartphones-iphone

actually limit was upped to 100 free apps
modfx 28th March 2011, 10:58 Quote
Quote:
Originally Posted by HourBeforeDawn
Isnt it Ironic that Steve started Apple as a way to fight and be Anti-Big Blue (IBM) and be for the people and look at him now screwing over more people and being more monopolistic then IBM ever was... ~_~

That was when the Woz was still there.....company went a whole new way when he left
Guinevere 28th March 2011, 11:22 Quote
Quote:
Originally Posted by mclean007
Woah! Stop right there. Apple takes 30% of every sale on the App Store, including through the new subscriptions features. As these are third party apps that have cost Apple nothing to produce (other than perhaps the relatively small cost of validating apps and adding them to the app store) and the marginal cost of delivering an app is effectively nil, that 30% is basically pure profit.

That's incorrect I'm afraid. Apple make approximately 1% of their profit via apps on the app store.

"Apple's gross margin on the App Store is about 44%, according to Munster, assuming 70% goes to the developer, $0.20 plus 2% of the ASP to the credit card company, and 1% for storage and delivery"

So on a $1.49 app, that's $1.04 to the developer and $0.23 to apple and the same to the credit card company (My guess is apple get more than the CC company)

That's still a hell of a lot of cash profit, but it's nothing compared to what they make on selling hardware! Apple are a very very profitable company ATM, and that comes from selling hardware. They sell the hardware and people buy apps. People buy apps then want better hardware.

Love em or hate em, you gotta admit Apple are big ol' bucket of win right now
HourBeforeDawn 28th March 2011, 23:00 Quote
Quote:
Originally Posted by modfx
Quote:
Originally Posted by HourBeforeDawn
Isnt it Ironic that Steve started Apple as a way to fight and be Anti-Big Blue (IBM) and be for the people and look at him now screwing over more people and being more monopolistic then IBM ever was... ~_~

That was when the Woz was still there.....company went a whole new way when he left

ya if it wasnt for him there would be no Apple and when he saw what Steve became he took off.
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