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Apple is iPhones & iPods Now
Martin Sitter on Thu, March 25th 6 comments
Francesco Schiavon sent me a link to a PDF the other day and told me to take a look at it. Francesco is one of our star trainers at NonLinear Educating Inc., and he's also one of my long time mentors

Francesco Schiavon sent me a link to a PDF the other day and told me to take a look at it. Francesco is one of our star trainers at NonLinear Educating Inc., and he's also one of my long time mentors ... when Francesco tells me to do something, I do it. This is the Link he sent:

The PDF at this link shows Apple's Revenue and sales by unit for Q1 2010. A quick look at it shows the following:

Combined iPhone & iPod Sales: 29 Million Units & $10.1 Billion in Sales
Combined Computers & Software: 3.3 MillionUnits & $5.5 Billion in Sales

Apple makes twice as much money from iPhones & iPod sales as it does from computer & software sales. Even more interesting, software sales (at a paltry $631 million a year) makes up less than 4% of Apple's revenue. Wow.

Have you noticed lately that Apple software revs (goes to the next version) much slower than it used to? In the past software would typically rev on a 1 to 1.5 year basis. There was always a lot of hype about when the new version of the software would ship, and what features would be found in it. Rumour sites popped up everywhere to facilitate endless gossip on these topics. People were happy to be a part of it all ...

These days the period between software revs is getting longer and longer ...the window is increasing to 2 years at minimum, and sometimes more! Even hardware like laptops and towers go long periods of time with nary a processor update. From my friends on the inside I hear that software development teams are being downsized, programers are being laid off or repurposed (usually to iPhone products), and in general the focus of the company is changing ... why?

Much of this can be put down to the maturing of Apple's software and hardware product lines. Let's face it, Final Cut Pro is a full featured video editing app that pretty much does everything it needs to already. What else is there to put into it? And Moore's Law which said CPU power doubles every 18 months (a law which held true for nearly 40 years)broke down at the beginning of this century. It's been over 8 years now since CPU speed doubled in a single 18 month stretch, and for the last 5 years speeds have barely increased at all. The technology is reaching it's limitations ...

But the real story rests in the numbers. If you make double the revenue from one product line than you do from another, it pays in spades to put your development resources there. iPhones and iPods pay big time. Software development doesn't.

The writing is on the wall. As Apple goes forward they are clearly becoming a consumer electronics giant along the lines of Sony or Panasonic. The focus on software and computer applications is shifting.

It's going to be interesting to watch Apple as the next few years unfold. What's coming next? Maybe flat screen TVs that network with your other Apple devices? What else could there be? Apple Fridges and Apple Toasters? Who knows ... but one thing is sure, Apple is now a consumer electronics giant and we can expect to see more consumer devices coming in the future.

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  • I think you're right about Apple's software line not coming out with major new releases as frequently. However, Logic Studio 2 (specifically Logic 9 and Mainstage 2) already have had many more incremental updates then their predecessors, and in a much smaller time span. The Logic development team seems to be more vibrant then ever right now (from the outside at least). This seems even more true when you consider the labor involved in converting a large application from 32 bit to 64 bit. What do you think all these revenue figures mean for the future of Logic Studio? 5-10 yrs down the road do you think Apple will still have enough investment in it to keep it competitive with other DAWS, or do you think Apple will eventually sell it off to another company?
    • 10 years ago
    • By:
  • Martin
    Incremental updates are good for fixing things ... but of note the rev from Logic 8 to logic 9 was so minimal we barely even had to update our tutorials ... flex editing was the only major feature. To me it seems not a lot of time is being put into developing Logic. Where's the cool new instruments we all want to sink our teeth into? Where's some higher quality DSP effects? I want more new better stuff to play with :) To me it seems Pro Software Development is taking a back seat to other "priorities" at Apple ... I think they'll continue to develop Logic, final cut, iLife, and etc. slowly, but that's about all. I don't see anyone buying these assets as no company I can think of would be able to afford it. And without Apple's distribution network the asset is worth a lot less anyway.
    • 10 years ago
    • By: Martin
  • I would have to agree with you that Logic hasn't really "developed" too many new features in the last couple of years. It seems like they have been more concerned with making Logic more and more stable with the features it already has, rather then give us any new toys per se. This is especially true when you compare it to Pro Tools 8. There are endless amounts of new instruments and features in that thing compared to Pro Tools 7. Cubase 5 also introduced some new instruments and pitch correction tools also.
    • 10 years ago
    • By:
  • Rounik Admin
    Surely I'm not the only one who has already used my Macs Superdrive as a toaster? ;-) But seriously, I agree with a lot that has been said... Flex Time is a large feature uodate... and so it Amp Designer. I view Logic 9 as the transition to 64-bit and hopefully the next iteration will contain the big features. A lot of pros since the Logic 7 days have been complaining that they would prefer bug fixes over new features, so perhaps this is the stage of development we are experiencing now? Also, in terms of Logic, there's a lot to be said about the smaller features. These features in Logic 9 have made my life easier: - Bounce in Place - Selective track import - Convert to new sampler track - Project and track notes - 64-bit mode The other element of Apple's strategy is how Logic & the Pro apps are a fraction of the retail price since Apple purchased them. I find it interesting that Software "units" are not listed in the PDF, but only revenue. Considering how cheap Snow Leopard, iLife, iWork, Logic, etc are, I feel these products are subsidized in order to sell the hardware. IMHO, the more iPhones, iPads, iPods are sold the more people become interested in purchasing a Mac. Sure a lot of these users will be consumers. But perhaps there is a blurring of the boundaries between "Creative Pro" and "Creative Consumer"? But, I agree this doesn't necessarily mean more man hours are going into development of the Pro Apps... yet look at Mainstage. It's now 3 years old and got a bright future I think. As much as I'd love to play with more synths and effects in Logic, the area that needed improving (audio, comping and time stretching audio) has been achieved very well IMHO. Hope this frees up some time for the developers to put some love into the Environment... mmm close integration with Quartz Composer...
    • 10 years ago
    • By: Rounik Admin
  • @Rounik- First off, I'm plowing through your advanced Snow Leopard tut right now and it has been marvelous so far. Very informing, relevant and smooth. I absolutely agree with you about Mainstage, it's capacity and future. When considering buying Logic Pro I think people really don't put Mainstage into the equation enough. After all, If I'm creating electronic music with software instruments exclusively within Cubase or PT how would I every hope to perform the instruments/sounds live? There are ways to do it but nothing as straightforward as Mainstage imho. I'm not referring to Ableton since it is slightly different in this regard. People usually see Mainstage as a separate app from Logic, which it obviously is. But I view it more as a strong feature of Logic. Afterall, you don't buy Logic without Mainstage.
    • 10 years ago
    • By:
  • Rounik Admin
    Hey Eric, Wow. Thanks for the kind words. Really glad you're finding the SL tut useful! Mainstage is potentially amazing... and I'm hopeful that it keeps improving. I do miss working with live MIDI objects in Mainstage. No arpeggiator, delay line, etc is hard for me to live with :( But I love the way Play back and Loop Back plugins read markers from audio files bounced from Logic. Very cool! And also... I think if you buy all the Apple Jam packs separately it comes to a shade more than price of Logic Studio. Another reason which might explain low revenue for software like Logic, are the number of pirated copies floating about. When I first got into Logic, eMagic had a very tight grip on this issue. No USB copy protected dongle = No Logic! That's changed, and I'm often surprised at how many user openly admit to using pirated versions on the web! But, for every pirated copy of Logic a new Mac is, or existing Mac is being used to run it! Also, for now a Mac/PC is still required to run a iPad, iPod or iPhone. It will be interesting to see the situation if these devices become more independent.
    • 10 years ago
    • By: Rounik Admin
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