Orders of magnitude

Here’s a little something to think about.

John Gruber posted something today noting that iTunes brought Apple $1.4 billion in revenue last quarter, noting how “it’s insignificant in the grand scheme of Apple’s income”. Indeed, Apple brought in $13.3 billion in revenue on the iPhone alone last quarter.

Which brings us to Google. Estimates are that Google could make up to $2 billion in revenue on Androidfor all of next year.

Google’s development costs are probably lower because they only have to develop the operating system and not the hardware and their marketing costs are probably lower but, still, they’re just not pulling in anything near what Apple is.

Your takeaway from this should be, of course, that Google is winning and Apple is losing.

  • AdamChew:

    You forgot the 40% return rate for androids, yeah they are winning.

  • I’ve always said Android was the worst decision Google ever made.

    All that marketshare is not bringing in the billions they thought it would. Why not? well probably because people who are searching on mobiles just aren’t doing it on the desktop now. It’s the same person/customer.

    How many billions of $$ did Google miss out on by not doing the hardware?

    It appears that they now know this hence the motorola acquisition.

  • Q:

    I know this is not a fair comparison, but it would be interesting to see how much do google’s android partners made in total from hardware sales plus what google is making on android themselves. May still come up shorter as android phones tend to have lower margin?

  • kurkosdr:

    Google is not “winning“ or gaining anything from Android. The reason they develop Android is to maintain their existing business model (search + cloud). If Android didnt exist, the only real candidate for the “market share leader“ crown would be Windows Phone 7 (sorry apple believers, but a single vendor OS with only one available device which costs 600 euros doesnt stand a chance against Android or WP7 and their myriad offerings). But WP7 directs users to Microsoft‘s search and cloud services, not Google‘s. Even if you can change that, it wont be as easy as on the desktop, so most people wont bother and use Microsoft‘s cloud and search instead. Google doesnt want that, and that‘s why they are pouring insane R&D into Android.

  • Jim:

    kurkosdr: You’re probably right. The single iPhone hardware option likely doesn’t stand a chance against the zillion Android or Windows Phone 7 hardware options, and probably will continue to not stand a chance for years and years to come while the suite of A/W models continue to churn, being born and retired rapidly in their wild success.

    We should all fail so boldly (and profitably).

  • Nick:

    kurkosdr: Yeah! I mean it’s not like the iPod ever gained any significant market share, what with Apple’s crazy strategy of starting out with one expensive, high-margin model and then expanding the product line to fill every available niche a few years later. And those $50 iPhone 3GS handsets are just sitting in warehouses, not flying off shelves at all.

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