Sleek iPhone is ‘most profitable item ever’

iWatering beauty: The money keeps rolling in for Apple, thanks to strong iPhone sales.

The world’s most valuable brand has smashed all corporate profits records thanks to soaring sales of its iconic iPhones. But is our seemingly insatiable demand for the product justified?

Apple. A simple word, yet one synonymous with power, money and technology. And this week the US tech giant left industry experts dumbfounded after announcing the largest quarterly net income of any public company in history.

In the three months leading to December 2014, Apple reported a staggering net profit of $18bn (£11.8bn). On top of that, it boasted a record revenue of $74.6bn (£49.2bn), leaving the company valued at $650bn. That’s a higher sum than the GDP of Israel, Greece or Denmark.

The company now sits on a cash pile of close to $142bn (£93.5bn). If a pot of money that big was distributed among the US population, every citizen would get $556. It is a bigger sum than the budget for Britain’s National Health Service. Apple is worth more than the Star Wars, Star Trek, Harry Potter, Stephen King, and Twilight franchises combined.

Behind Apple’s phenomenal success is the light but mighty iPhone, weighing in at only 172g. While sales of its iPad fall, the company sold 74.5 million iPhones in its last quarter. That equates to 34,000 handsets every hour, and nine every second.

Demand is particularly strong in China, although the US remains the biggest market. Yet Apple actually sells fewer phones than its rival, Samsung: they simply make a far higher profit on every phone. Why has the iPhone’s allure proved irresistible despite its premium price?

Apple isn’t famous for doing things first. Its biggest launches in the past decade — the iPod, iPhone and iPad — have all been updated versions of products that already exist.

Instead, experts say, its formidable strength lies in understanding the importance of aesthetics. Apple’s Tim Cook described the new iPhone 6 as ‘the most beautiful phone ever made’, and not many people seem to disagree. Stephen Fry went so far as to call the latest dreamy device ‘an utterly gorgeous object.’

Apple of my eye

Even if the iPhone is the most beautiful object on the planet, say pragmatic types, who cares? It’s still just a phone, and needs to be functional, nothing more. In the words of David Bailey, ‘It shouldn’t look good, it should work. Otherwise it’s art.’ Our willingness to pay over the odds for a ‘cool’ brand is baffling, and simply proves how superficial we are.

But others contest the idea that looks are unimportant. Beautiful design enhances the ordinary and everyday, and provokes deep emotional responses in us. The most revered designs are created by visionaries who believe that ‘form follows beauty’, like the Brazilian architect Oscar Niemeyer, whose futuristic buildings were inspired by the elegant curves found in nature. Great design always has, and always will combine beauty with functionality.

You Decide

  1. Is our obsession with Apple justified?
  2. What do you think is the greatest design of all time?

Activities

  1. Redesign an everyday object or product to make it more elegant and aesthetically pleasing.
  2. Do some research and think of alternative comparisons to illustrate the size of Apple’s profits.

Some People Say...

“Beauty is truth, truth is beauty.”

John Keats

What do you think?

Q & A

My life would be so much better if I had one of these.
Not necessarily. According to a new book by Daniel J Levitin, our addiction to smartphones is making us more stressed and even more stupid, because they overtax our brains. Some people are starting to agree, like the award-winning director Christopher Nolan. He doesn’t own a mobile phone and never uses his email. Less time spent glued to technology could make us accomplish more and allow our brains to rest.
So what next for Apple?
Good question. The release of the Apple Watch in April is hotly anticipated and is expected to add to the strong sales. But the accessory will cost upwards of $350, and only works if you already own an iPhone. It’s a cunning ploy to keep iPhone owners within the Apple family rather than shopping elsewhere.

Word Watch

Money
Apple, like many technology companies, structures itself so that it pays some of its tax in countries where rates are low. This is entirely legal, but controversial. According to Senator John McCain, Apple is ‘one of the biggest tax avoiders in the country.’
Profit
Revenue is the total money that a company receives from people paying for its products or services, and profit is what’s left at the end after the company has paid for the cost of goods sold and expenses.
GDP
The Gross Domestic Product is the monetary value of all the finished goods and services produced within a country’s borders calculated within an annual period.
David Bailey
An English fashion photographer who grew up in East London. His photos of cultural icons like The Beatles and Jean Shrimpton were defining images of the so-called ‘Swinging Sixties.’
Oscar Niemeyer
The architect of the main government buildings in the futuristic Brazilian capital, Brasilia, died in 2012, aged 104.

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