Apple made more money this weekend than BlackBerry will sell for

Apple made more money this weekend than BlackBerry will sell for

Summary: BlackBerry is worth $4.7 billion, according to early reports on a potential takeover. That's a drop in the bucket for today's mobile king.

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TOPICS: BlackBerry, Apple
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Photo illustration: Andrew Nusca

Apple announced today that it had a blockbuster opening weekend for its iPhone 5c and iPhone 5s launches, despite issues around supply, selling nine million devices worldwide in the first three days the phones went on sale.

On the very same day, rival BlackBerry revealed that it has signed a letter of intent with a group led by Canada's Fairfax Financial, a large shareholder, suggesting a possible takeover. According to the valuation by the Macquarie Group, the company's sale price has been pegged at $4.7 billion, a slight premium over the company's current market value of $4.32 billion.

To illustrate BlackBerry's fall from grace, consider this: Apple makes $581.10 in revenue per iPhone unit sold, according to figures from its most recent quarterly earnings report, issued in July of this year.

If you sell nine million devices with those revenues, you've made $5.23 billion.

Now, that per-unit revenue figure has declined recently with each passing quarter. (Back in 2010, it was $650.) And it will undoubtedly continue to do so this quarter. (Though at least one reader disagrees.) But even if you reduce per-unit revenue by the same amount that it fell between Apple's second and third quarters of this year—$26.75—you still end up with $4.99 billion.

It's a sobering comparison for BlackBerry, a troubled company that, at its peak in 2008, was worth about $83 billion. Incidentally, that was the year that Apple launched the iPhone 3G and Google introduced its first Android-based mobile phone.

Topics: BlackBerry, Apple

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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34 comments
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  • Someone missed Accounting 100

    Apple spent money to make these devices. You are comparing money a company is worth on paper to revenue a company is generating after incurring costs. Fun bit of comparison- I can make a trillion dollars in revenue and still go bankrupt if my expenses exceed my revenue. So you need to cut your calculation by more than 1/3 given that the average phone costs about $200 in materials. That's not factoring in any other costs associated with producing said phone that you should be accounting for, such as marketing, R&D, etc.

    I realize you are a journalist first and tech person second (or even further down the list). Please at least take enough interest in what you are writing to be factual. Thanks!
    ikissfutebol
    • Nobody missed Accounting 100

      Wouldn't it be "Accounting 101"? In any case...

      ...Regardless of the cost of the phone itself...the profit to Apple is $581.10 per phone sold....after all is said and done. The $200 (or whatever) cost of materials is included in that amount. Yes, Apple makes a KILLING off the App store among other services.
      lawryll@...
      • Don't confuse Revenue with Profit

        The $581.10 per phone is just dividing the total revenue by total units sold.

        The true profits are MUCH less than that. We don't know Apples margins, but they are no where near as high as most would think. Their overall profits were just under $.20 for every dollar of revenue ($6.9B profit on $35.3B in sales).

        The best case scenario is that they make about $220 per phone. That is assuming that every single penny of profit comes from the sales of iphones, and they make nothing from ipads, macs or itunes sales.

        Despite what many would think, Apple probably makes no more than $150 per phone.
        yoshipod
        • But we do

          But we do have some idea because publicly traded companies report their gross margins as part of their quarterly report. While Apple make no where close to the soul raping margins of Microsoft (> 70%), they do manage a healthy margin in the mid 30's.
          rbgaynor
    • You're assuming that I'm talking about profit. I'm not.

      I appreciate your explanation of profit -- and I'm fully aware of what it is, really! -- but that's not what I'm discussing here. I'm simply comparing the amount of money Apple took in with the amount of money BlackBerry is going for.

      It's not meant to be financial advice; it's meant to illustrate a point: that the chasm between the two companies, as far as money-making goes, is enormous.

      You could make a thousand quibbles with this. You could argue, as you have, that I should use profit as a marker, because that's the end-all-be-all. (Unless you're Amazon.) You could argue that I should use market cap as a metric by which to compare. You could argue that I should compare revenue with revenue -- and perhaps I should have. You could simply argue that it's an unfair comparison altogether.

      The bottom line is this: One phonemaker is making money hand over fist, and the other is selling for a song. One used to lead; the other now leads. They compete in the same marketplace. I think these two figures surfacing on the same day demonstrate that, even though they're an odd pair. There's nothing inaccurate above.

      So, since you prefer profit: at $381 per unit -- and we must exclude marketing, R&D and the like, since Apple does not break those figures out -- Apple pocketed $3.43 billion this weekend on iPhone sales alone, or about 73 percent of BlackBerry's sale price. I don't know about you, but I still find that startling.
      andrew.nusca
      • You are just making up numbers

        I don't know where you get that $381 per phone profit from.

        Apples total revenue last quarter was $35.3B, the cost of goods sold was $22.3B.

        If we use your numbers, which assume an iphone costs $200 to make, that means the rest of Apples sales cost just over $16B, but only sold for $17.2B. That means before any other costs like you mention above, Apples gross margin is just under 7%, or the gross profit from every single, mac, iPod, ipad and itunes sale is $1.1B.

        Or are you claiming that apple sells everything but iphones at a cost or a loss, given those tiny margins, and almost $4B in operating expenses.

        Your numbers's can not be right, or even close.
        yoshipod
        • Apple Margin...

          ... on iPhones is, I believe, approximately 35%. My understanding is that Samsung's margin is about 20%. This is one reason why, even though Samsung currently has greater market share of the phone market than Apple, Apple takes home about 57% of the total profit. This goes a long way to explaining why Apple likely does not care about Samsung's constant touting of their market share.
          gflood
        • Just follow the thread, yoshipod.

          lawryll said: "The $200 (or whatever) cost of materials is included in that amount."

          So I took his hypothetical number -- which according to teardown estimates, is in the ballpark -- and ran it through the same series of basic calculations.

          Your suggested alternative is impossible to figure out, by the way. Apple's total revenue spans devices, services, entire business units. If you start at the enterprise level and work down, you'll never get there, because Apple doesn't break out everything.
          andrew.nusca
      • It doesn't matter what numbers you choose

        Some wannabe accountant will take issue with them. The only issue worth considerig is how fast high tech comapnies can fall if they get behind the ball innovation-wise. 5 years, from top of the smartphone pile to "for sale" at 5% of its peak value. My "still feels new" pickup truck is older than that.
        oncall
      • No...Apple didn't pocket $3.43 billion

        A lot, if not most of that money is paying for the devices that got sold. Really tough to understand...

        My initial complaint was that this is just a completely misinformed article written to generate excitement. I get it. I'm just saying to do so with ACTUAL facts and not skewed data meant to sensationalize a company. Bill Gates could buy BlackBerry...Les Wexner could, too (founder of Limited brands). I'm not sure why this is newsworthy though. This is life where one day you can be the big dog and the next you are at best a back page story.
        ikissfutebol
        • If it makes you feel any better, I agree with your thinking

          and I also agree that the article was written as click-bait with the sensational headline.

          Also, have you taken into account in your calculations the amount of taxes that Apple has to pay for its earnings? Admittedly, Apple pays less in taxes because it has a lot of its assets and operations overseas, but the tax man still gets his cut.
          adornoe
        • (Bad day for fruit?) Pride comes before a fall.

          Apple has already fallen from grace three times only to be rescued by the late Steve Jobs. Blackberry was once also the darling of the industry, just as Apple seems to be at the moment, however the warning signs are already there.
          Android sales are eclipsing Apple's, and IOS-7/5S has only received a fraction of the hype of previous releases. I work with died-in the-wool fanbois, and even they are a little disappointed with the lack of innovation in the latest releases.
          This time Steve won't be there to save them.
          andrew.cowan@...
        • Re: Bill Gates could buy BlackBerry...

          If he has the cash, that is. Or someone agrees to loan him some.

          I doubt anyone at Blackberry will agree to be paid in Microsoft shares.
          danbi
        • Missing the point...

          Blackberry is selling EVERYTHING and the price they get is less than Apple gets for selling iPhones for 3 days. If the article was about profit, or whether Apple could afford to buy Blackberry with the proceeds, these criticisms might make a little sense; but all this article aims to point out is the staggering fact that can sell part of their on hand inventory and in three days can raise more money than Blackberry can raise selling their entire inventory, their R&D, every one of their patents, in fact everything they own. On day four, Apple is sitting on a large chuck of cash and still has a viable business to continue making more cash; Blackberry shareholders will receive a large chuck of cash-that is probably less than they invested-and nothing else left.
          Mythlandia
      • Not only that

        Not only that, they pocketed about 50% of the sale price of Nokia's cell phone group (the cell phone formerly known as Nokia). Amazing.
        rbgaynor
    • All you really need to know

      is that apples are green and berries are red.
      LarsDennert
      • FTW!

        Best post award!
        SevenEd
      • not!

        Apples can be red and berries can be many colors.

        Yes, that means you usually need to know more.
        danbi
  • This number isnt right

    The price that the article is showing, is nto even the price of all iPhones, nevermind the fact that its the full retail price that they sell the phones at. This doesn't account for any cost at all. And making money is profit, which means cost.
    Jimster480
    • Fair enough. how about this comparison instead

      Apple could buy Blackberry outright using 3% of its cash reserves.
      baggins_z