Ethan Kaplan on Apple's Trojan Horse
A post from blackrimglasses in its entirety:
[Apple passes Amazon to become the #3 US music retailer]Apple passes Amazon to become the #3 US music retailer - Engadget: this is the only real review of the iPhone (or AppleTV for that matter) that matters. The devices are secondary (although from what I understand and know, they are amazing). What is more important is the Apple trojan horse and the shifting of consumer behavior. Lest people forget, the Ipod was released a year (I think) before the music store. Apple just surpassed Amazon as a music retailer… hmmm…..
I agree. Apple's hardware is the camel's nose under the tent flap. In the cell phone market, apple's gizmo will lead to astonishing shifting in the market dynamics.
That's not true at all. Apple makes a killing in devices, where it controls immense margins, and barely breaks even on tunes, where it pays 70c of every 99c to the copyright holders - the record companies.
The real money is in devices, you just have to read their financial statements to see it: net sales of $1.6Bn for iPod devices last quarter vs. $0.68Bn for all iTunes, iPod service and iPod accessories combined. From the latter they have to extract 70% direct cost of goods, plus overheads before they make a margin. On iPod, the margin is huge, as all of the components are commodities and Apple owns all the IPR for the software.
Posted by: Web2.0 Skeptic | June 27, 2007 at 07:53 AM