Monthly Archive:: November 2018

Apple raises prices, and profits keep booming

Apple 30 Comments

Since Apple introduced the iPhone 11 years ago, smartphones have become ubiquitous, and the market for them is saturated. To maintain growth, Apple has employed a shrewd strategy: Charge more for the devices.

Journalists and analysts have explained how Apple is doing that by dividing the number of iPhones sold in a given quarter into the revenue Apple earns from them to calculate the average selling price.

That's not going to be so easy anymore.

But after those figures were reported, Luca Maestri, Apple's chief financial officer, said in a conference call that the company would no longer disclose how many iPhones, iPads or Mac computers it sold. As a result, journalists and analysts will no longer be able to track how Apple's swelling prices are improving its profits.

Here's the problem for Apple: iPhone sales have flatlined, and Mac and iPad sales have consistently been going down for a while now. Since Tim Cook's Apple has been unable to find the next big thing (after the iPod and iPhone), the only way to maintain growth is to increase the average selling price. Sell less units, but charge more for each unit sold.

This strategy is working - for now. This gravy train ain't infinite, though, and there's only so many price hikes you can pull off before you reach a ceiling.

Read More

Father of web says tech giants may have to be split up

In the News 10 Comments

Silicon Valley technology giants such as Facebook and Google have grown so dominant they may need to be broken up, unless challengers or changes in taste reduce their clout, the inventor of the World Wide Web told Reuters.

The digital revolution has spawned a handful of U.S.-based technology companies since the 1990s that now have a combined financial and cultural power greater than most sovereign states.

Tim Berners-Lee, a London-born computer scientist who invented the Web in 1989, said he was disappointed with the current state of the internet, following scandals over the abuse of personal data and the use of social media to spread hate.

I couldn't agree with him more - but I'd like to expand this beyond just the online or technology sector. In all kinds of sectors there are companies that are far too large and rich, and thus powerful, to continue to exist unabated. We've broken up powerful companies before, but the odds of it ever happening again seem slim - companies have been very successful at fostering an anti-government atmosphere in which corporations are seen as idols to be worshipped rather than potentially harmful entities that need to be kept in check.

Read More