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Success of the Year: Apple


News by admin on Friday January 02, 2015.

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There are a number of candidates here. LG for example finally arrived in the smartphone elite with the G3 flagship and recorded record sales in 2014, while Xiaomi has shaken the industry with its business model that has impacted Samsung particularly hard. However, we decided to yield to convention and choose the company that above all others really does define success in the smartphone world... Apple.

Companies have two objectives, sell as many devices as possible and make as much money as possible. Apple succeeds at both to levels other companies simply cannot attain. Through Steve Jobs the company set itself up as something of a pop culture phenomenon and whatever it launches will sell by millions.

Samsung sells more devices yes, but then it makes a hell of a lot more too. From a device to device perspective iPhone sales surpass other smartphones by millions, while Apple rakes in money on a scale no other company matches, especially now that Samsung has slid. It also helps that the iPhone 6 is a very good smartphone regardless.

Here's what we said about Apple this year:

iPhone sales went through the roof, with the early launch of the iPhone 6 likely to have played a part, while the next quarter should provide a similar scenario (the company has stated revenue guidance for the holiday quarter of $63.5-66.5B, with gross margin of 37.5-38.5%). Apple will be increasingly worried about iPad sales, which continued to decline, falling 12.5% with 12.316 million units sold. Cupertino will likely wait to the next quarter for a better idea of the state of the iPad business; the new iPads were imminent in this period and likely slowed sales of outgoing models. Apple's Mac business continues to thrive, now among the fifth largest PC companies in the world, it is also one of the only ones that is growing.

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Forbes has released its annual list of the world's most valuable companies and (un)surprisingly the table is topped by Apple. The magazine/website values the iPhone maker at a whopping $124.2 billion, a number that is more than double any other company on the list and much more than Cupertino's rivals.

Forbes said Apple increased by 19% thanks to increased product sales and continued demand for the iPhone. Microsoft was the nearest of Apple's rivals in second place, but trailed far behind Cupertino at $63 billion, itself a 13% increase. Other tech companies include Google in third place ($56.6 billion), IBM in fifth ($47.9 billion), and Samsung in 8th ($35 billion).

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Apple has won over $1 billion in damages from Samsung over the years, and while the companies have settled their international disputes, the war wages on in the US. Cupertino said after the last Samsung loss that the company should either have to pay more damages, royalties from sales, or have their products removed from the market entirely.

Judge Lucy Koh has been presiding over the cases and she seems to be siding with Apple. The company appealed the last victory for more damages and Koh concludes in a new order that Samsung should be paying royalties of each sale from devices that were found to have infringed Apple's products and patents.

That may not actually be a problem for Samsung anymore. That device found to have infringed three Apple patents are old models that are not widely available anymore. The company insists that it found a workaround for the patents in all models made since 2012, so will not actually have to pay any further royalties. Samsung has however said that it would appeal Koh's latest findings. The interesting thing is that Apple appears to be out for blood and what it feels it is owed. If now royalties actually materialize because the patents broken were on older devices, Cupertino is likely to press ahead seeking more damages and that sales ban.

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It seems not though, with the BBC showing leaked hidden camera footage from inside a Pegatron factory on the iPhone 6 production line. The show discovered that "standards on workers" hours, ID cards, dormitories, work meetings and juvenile workers were being breached at the Pegatron factories."

Apple has said that production lines are working around the clock to make sure customers have an iPhone 6. That is the reality, but it seems Apple is willing to meet demands at the cost of workers well-being. The film shows people sleeping on their shifts, on the line taking a nap, something a Pegatron insider said is common practice.

One worker reportedly requested a day off, but was instead forced to work 18 days consecutively (for reference, overtime should be voluntary and not forced), while another said:

"Every time I got back to the dormitories, I wouldn't want to move.

Even if I was hungry I wouldn't want to get up to eat. I just wanted to lie down and rest. I was unable to sleep at night because of the stress."

 
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