Apple’s iPhone business alone is nearly twice the size of Google’s entire operation

“It seems that almost every day I’m confronted with yet another insignificant article explaining how Google has surpassed Apple in ‘platform market share’ and that, due to this cataclysmic state of affairs, investors should jump ship as this surely amounts to nothing short of the financial end of Apple,” Andy M. Zaky writes for Fortune.

“This issue of platform market share is trivial and financially irrelevant to the overall Apple investment thesis, and does nothing more than to distract people from financial reality,” Zaky writes. “In the end, Apple makes so much of the money in the smartphone industry because it actually understands how to run a business. Apple’s iPhone is far outpacing the growth in the global smartphone industry according to IDC and Gartner.”

“The iPhone is growing at a pace of 85-100% each quarter,” Zaky writes. “iPhone revenue is nearly doubling each quarter. After selling 39 million iPhones in 2010, Apple is going to sell more than 75 million in 2011, generating nearly $50 billion in revenue from a single device.”

Zaky writes, “Google will probably report about $6.5 billion in total revenue when it releases its first quarter results later this week. Apple’s iPhone alone will very likely eclipse $11 billion for the March quarter. For 2011, Google is expected to report about $27 billion on the top line compared to the iPhone’s expected $48.2 billion in revenue. The iPhone as a business is nearly twice the size of Google’s entire operation. This is a financial reality rarely illuminated in these so-called “platform market share” articles where Apple investors are supposed to be ‘deathly afraid’ of the Android operating system that doesn’t even create a fraction of the revenue Apple generates from the iPhone.”

Much more in the full article – very highly recommended, especially if your name is Henry Blodget, here.

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

Related articles:
iOS versus Android: OS footprint is not a proxy for app footprint – April 8, 2011
Why Apple’s iPhone is not ‘dead in the water’ – April 4, 2011
The iPhone is not the Mac, so stop trying to compare them – December 23, 2009

51 Comments

    1. Not completely; he misses the point that Google’s Android never surpassed iOS in platform marketshare (they only did in smartphones section; overall iOS quarterly share is about 20% bigger than Android).

    1. Blodget’s not interested in the truth, he’s only interested in driving eyeballs to his web property. The other guy who should look is Fred Wilson, but he’s only interested in pointing to articles that support his beliefs. He ignores ones that don’t.

  1. Yep.

    Googles android revenues by itself is even more pathetic.
    1 billion last year from all non PC platforms. If you minus Google on iOS revenues Android probably gave Goog about half a billion for the whole year.

    1. YES! It is free and these idiots pissed of Apple thinking it would help them sell ads. Note: Maybe they say that Apple’s OS was (kind of) free on (some) devices. You buy the hardware (that is sold at a profit) and you get the OS bundled with it for FREE. Sounds like the same plan to me too.

      Clueless android idiots!

  2. Keep telling yourself that our idea is best and the other guy sucks, then wake up one day and find that the better mouse trap was not enough (e.g., Mac better than Windows but Windows won the market share war, etc.).

    Just sayin’

    1. Are you delusional? Perhaps you should take some of the drugs you prescribe your patients. Or are you a Ph.D. in relative autism?

      I’ve not heard such rubbish in my life. What kind of comparative study are you trying to do with Windows and Android? Windows at the very least generated licensing revenues for Microsoft so winning market share meant something. Android generates nothing for Google so market share is a meaningless metric that is unsustainable in the long run.

      I suggest you see a shrink for your problematic analysis. There’s no value in driving market share in the absence of revenue growth, profitability or any sort of financial return. Unless you live in a drug induced haze in which case welfare is the only solution for dickheads like you.

      1. You’re about as intelligent as a left nut. You think Google loses money on Android? Try again fanboy. I know it’s hard to understand the world with Apple blinders only letting enough data for you to say that Apple is great, all the others suck.

        Fail!

        1. If you take away Android’s development cost of $500 million and maintaining the codebase at $250 million and that’s a conservative estimate, then what you’re left with when you deduct costs from revenue of $1 billion is $250 million which on the scale of things is hardly worth waking up in the morning for. Chump change.

          Now development cost is not annually recurring but still maintaining the codebase is something Google will have to spend. Technology doesn’t stand still so what’s the R&D cost of developing new iterations of the software? Oh yes, Google copies Apple so let’s put this figure at $500 million because you need to work on the UI, API, SDK and other stuff.

          At the end of the day with hardware manufacturers’ BOGO offers, let’s say Android wins 51% of the mobile market. Do you think a business model that dribbles profits in is sustainable in the long term?

          You’re the kind of person who smells his own fart and thinks it’s the best smelling perfume in the world because your world view is parochial to say the least.

          1. Idiot. You have no idea how Google makes money on Android, do you? If you would flex your Apple pea brain, maybe you would see that Google makes it’s money in ways other than selling hardware/software. I know that’s too difficult for you little Apple cheerleaders to understand, but your delusional world is a mere speck on entire reality.

            Grow up Francis.

            1. Haha. It’s pretty funny to watch Doc Dude accuse other people of being delusional when he’s very obviously the delusional one, living in some kind of demented Google fandroid la-la land.

              When Andy Zaky wrote “the iPhone is growing at a pace of 85-100% each quarter” and “the iPhone as a business is nearly twice the size of Google’s entire operation”, how exactly did you read it? Or did you even bother reading the article it all? It seems like you didn’t.

              And speaking of Zaky’s article, after reading it I think we all have a clue how Google makes money on Android: it basically doesn’t.

              But don’t worry. You can keep reality at bay by saying we have pea brains and calling us Francis.

        2. No DrDude, you FAIL. BLN offered cogent and clear reasoning for why your argument is moronic; your retort was a complete nonargument. And Davewrite makes an equally compelling case that the ad revenue that Google generates from Android is a tiny, tiny fraction (less than 1%?) grossing on iPhone. The Bottom Line is this: Apple makes a lot of money from the businesses it pursues and it doesn’t need to have the majority market share to do so. Your delusional analysis (or lack thereof) indicates that you don’t understand that making money is the purpose of a company.

            1. Dude, Google is an advertising company. If Google had to live off of the Android advertising and Android search ad revenue it would die in a week. Google lives off of search engine revenue. PC & Mac search engine revenue.

              The money Google makes from Android really is chump change.

        3. umm…okay PC wars is one analogy. But what about the MP3 wars? The last ten years ? iPod vs the world? yyyyyeah about that…conveniently forgotten.

          Being selective in rote analogies without any research or facts to substantiate your claim is myopic. Being derogatory on top of that whilst feigning intelligence is laughable at best. Not being able to discern the intrinsic argument being put forth. Priceless.

          Winning? Not. Even. Close.

          1. My point is you are clueless. An empty vessel making noise.
            An ignorant troll with no class. A mouth breathing oxygen thief. Run along , mommy needs to change your nappy.

    2. apple won the PC war.
      (just like the article says people don’t get market share vs money)

      Macs take 30-40% of worldwide PC profits. Sales Growing 8 times faster than PC.

      Acer just fired their CEO. Dell fired CEO, Michael Dell came back but Dell still floundering, now one tenth the size of Apple with fraction of profits. IBM PC gone (division sold). Gateway, Compaq, eMachines all sold. HP also fired CEO (reasons unclear).

      Msft stock stagnant last 10 years, Apple grew 3000 %, Apple now 90 billion larger than Msft. Of course apple’s profits not all from Macs but so called ‘winning’ the PC war made Msft complacent and slow…

        1. “Congratulations …..”

          why thanks,

          I’m a SMALL investor
          but shoot I made over $150,000 profit from Aapl in the last few years through the recession, so I KNOW Apple won…
          lol.

    3. Why is it that every time someone ends a post with just sayin’ or “my 2 cents” it is proceed by something really stupid. I’ve noticed that more and more. It’s as if the last bit makes up for them being an idiot.

  3. The iPhone market is a great revenue and profit avenue for apple. They are still in the growth phase and can demand high prices to the carriers.
    The question is how long can they sustain this? Will they get pricing pressure to reduce the cost to the carriers?
    Hopefully if they need to apple will come out with cheaper versions like they did with the iPod nano. Apple have great control of the component market which is similar to how they could dominate the mp3 market.

    1. Cheaper iPhones don’t make any sense. You can already get last year’s model for $50. The cost of the voice and data plan so outweigh the cost of the phone that it almost doesn’t matter. who cares if the phone’s free if I can’t afford the data plan? Apple doesn’t need cheaper phones.

    2. Apple has been making great revenue from superior computers since ’84. No cheaper versions needed.

      As long as Apple makes the best, well integrated cell phone, there shouldn’t be a problem.

  4. Having a problem here:

    iPhone = OS + device sales
    Google = OS only (no device sales)
    If you add in all the devices that run Android in the mix (Motorola, HTC, Acer, whathaveyou) it surely look s much different.

    1. Ralf, only HTC makes any money selling Android phones. When you take HTC’s profit and subtract every other manufacturer’s loss you kind of break even.

      That’s how Apple pulls in most of the cell phone sales profits.

    2. Ralf, you really should have finished 4th grade, it would have given you a leg up in today’s society. Try this without overheating that orb in your skull: Google is an advertising company!

      Now go and figure out how stupid your first comment was then come back and report to the class. There are others around here that could use the help.

  5. Apple already has a cheaper iPhone. It’s called the 3GS and it’s $50 with a contract. Cheap enough?

    When the iPhone 5 comes out, it is reasonable to expect that the iPhone 4 8 GB will slide into that spot.

    – gws

  6. Give me profitability over market share any day.

    Companies that chase market share above all else almost always collapse. It takes time, but history shows us that they do.

  7. I enjoyed the comments today if for no other reason the epic butthurt on display by DrDudeTx. If there’s one thing that drives people like him nuts it’s Apple being successful.

    Apple haters: predicting Apple’s demise since since 80’s.

  8. Great, thanks for playing today. You still lose for not understanding 3rd grade math. Let me see if I can dumb it down for you far enough. Google + Android market share = huge win in growing THEIR business model.

    I know you poor little Apple drones will want to see it in light of Apple’s model (successful for them no doubt). Go ahead and start spewing the pap about “they make no money on the software” and you’ll be back to square one. NO CLUE.

    Children, there is more than one way to rule the world. Grow up and try to look bright.

      1. Actually, I don’t read what I write. It’s hard to keep things straight when I’m smoking low-quality crack in my mom’s basement. I know I like to throw out terms like “pap” to legitimize my claims of being a doctor, but, in truth, the only thing I stick my hands up are cows. As you may have already figured out, I’m not a real doctor as real doctors don’t have all day to spend on a Mac blog. Heck, I’m not even in the medical field, unless you consider inseminating livestock part of the medical profession. I know I said “there is more than one way to rule the world.” Actually, I don’t know exactly what I meant by that. Maybe I meant there is more than one way to skin a cat. But, I guess that doesn’t apply to comparing Apple to Android because the cat Apple’s skinning is the money cat and Google’s really not interested in skinning that cat, they’re more interested in screwing it. Sorry for the drivel. Gotta go raid my mom’s purse so I can buy some more crack.

    1. @DrDudeTX

      er…

      This article on MDN is about Google vs Apple’s profits.

      OEMs making money and market share does not necessarily equal money for Google BECAUSE:

      A lot of android OEMS don’t even have Google search or services : they got Bing, Yahoo and Baidu and their own apps. A big chunk of Android growth is in China where they run forked versions like OMS that don’t run Google Apps or Services, Google makes zero off them. If people buy apps from third party stores Google makes nothing.

      You can slice and dice it however you want: like I pointed out before Google made from ALL revenues (search, advertising etc) on non PC platforms: 1 billion bucks (half of that from iOS) last year. That’s about half a billion from Android BEFORE R&D. Peanuts.

      I have a little bit of Google stock but I stop buying when Android came out and poured cash into Aapl. Goog has stayed essentially flat since android, Appl has about tripled.

      When Android was announced Google was a larger company than Apple in market cap, Apple blasted past Google in 2009 and today Apple is 100 billion bigger … what is Google winning again.. ?

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