Judge Koh wants Apple to reveal the profitability of the Apple iPhone
the right to seal its financial records. Judge Koh has made it clear that if Apple is going to use its financial performance to win huge verdicts, it cannot do so and then keep those numbers a secret. The judge wants Apple to reveal the profitability of the Apple iPhone. Around now, you might ask yourself that since Apple is a public company, shouldn't these figures be available to the public? The SEC does not require that companies like Apple with a multitude of products, break out the profitability of each one. It would be like McDonalds issuing a P/L for each variation of burger it sells.
The figures will not be made public immediately as Judge Koh has decided to keep the documents sealed until she gets a ruling on her order from the US Court of Appeals for the Federal Circuit, the higher court which handles all patent cases. A similar order that the judge made on August 9th to unseal certain documents has already been sent to the Appellate Court for their review.
What the judge is saying is that while Apple can keep the profit/loss figures for the Apple iPhone a secret for competitive reasons, it cannot do so while using the same financial performance as a tool to win billion dollar verdicts.
source: ArsTechnica via BGR
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1. ajac09 posted on 21 Oct 2012, 22:07 21 3
and we ( well the judge shall see) that samsung hasn't hurt apples products at all.
4. -box- posted on 21 Oct 2012, 22:40 13 2
Maybe the damages (if not voided) will be more like $1.05.
7. nyuvo posted on 21 Oct 2012, 22:54 1 2
I'm trying to figure out if its a good or bad thing for Samsung.. We all know they are extremely over priced and that Apple makes huge profits.
So to prove that the iPhone does bring in lots of revenue due to it being so over priced, then theoretically the damages would be considered more severe as Samsung have taken away these potential profitable sales?
9. -box- posted on 21 Oct 2012, 23:02 0 0
My understanding is that, while profits may have been (arguably) lost, the rationale for asking is due to the infringement on components at core cost, rather than over inflated prices set by apple. Hence, lost income, rather than potential lost profits, as it is impossible to determine if such sales would have even occurred. Samsung's more aggressive with its prices, and those customers that could not have justified a purchase of an inferior but arguably comparable apple product at a higher cost could justify the purchase of a Samsung product at a lower price, and with more capabilities. To which point, if it could be justified that Samsung did cause any lost sales, the penalty would be for core cost of each iphone, minus (of course) the cost of Samsung's own components. That said, I am no legal scholar.
13. Droid_X_Doug posted on 21 Oct 2012, 23:48 0 0
Given that Judge Koh has requested profitability data, that would imply that Koh is considering Profits versus Margin for the damages model. Gross Margin is generally defined as Sell Price less Cost of Goods Sold, which based on iFixIt (and others) numbers is around $400/iPhone. Profitability is a different kettle of fish. Profitability takes Gross Margin and subtracts Selling, General & Administrative (and a few other items) expenses to arrive at Net Profits.
If Apple's revenue model peaks at launch and then trails off as time passes, profitability will be less, since SG&A expenses are generally constant over time.
All of which would explain why Apple is wanting to keep their profitability numbers sealed.... Kind of like a modern variant on the emperor having no clothes.
25. nyuvo posted on 22 Oct 2012, 04:09 0 0
Well said (both you and box). I am very interested to see how much Apple really profits from each device.
You have a good point that people might just buy samsung products simply for just "better value".
If i can get a phone that does what this other phone does (arguably better) for 75% of the other phones price - Then why not?
There's one thing even an android fan (me) will admit tho, and that is that samsung is guilty of copying elements from the iphones design. However, the fact that they are patentable in the first place isn't right. Its like saying Doge copied ford with their charger vs mustang. They have their similarities, now get over it. and may the best product win.
24. PhenomFaz posted on 22 Oct 2012, 03:04 0 0
lokks like this came to bite apple on its rear...Koh's got greedy and Apple's gotta pay :)
2. sarb009 posted on 21 Oct 2012, 22:16 17 2
And how much % she wants as her comission for taking the case in favour of apple ?
15. Jelly_Bean posted on 22 Oct 2012, 00:13 2 0
I believe if Sammy can get some good lawyers they may change the course of this case. Because I still believe "Truth always wins" :)
5. Ravail posted on 21 Oct 2012, 22:42 14 1
Lol i bet Apple is getting a bad taste in its mouth now..
10. Droid_X_Doug posted on 21 Oct 2012, 23:14 3 2
Apple is definitely getting a case of heartburn. They are wanting to have their cake while eating it at the same time.
I suspect that what will be shown is that Apple's profitability peaks at each iToys launch with profitability trailing off as time passes. That is probably a different 'lost profits' model than what was the basis for the $1.05 B judgement.
Nothing like transparency....
6. zackh121556 posted on 21 Oct 2012, 22:49 3 1
Umm, this is something that should have been done during trial... if you put that much avail on the table. The amount should be justified. I hate Apple and wanna be game changing judges!
8. TheRetroReplay posted on 21 Oct 2012, 22:57 6 1
So Apple may not even get a cent of that $1.05 billion from Samsung if the books prove that Apple was not hurt from Samsung's sales of their devices?
11. Droid_X_Doug posted on 21 Oct 2012, 23:17 0 0
I wouldn't go that far. At least not on this round. Whether the Apple patents are valid is not the same as saying that Apple didn't lose $ due to sales they lost to Sammy. This iteration is about how many sales were lost to Sammy and the profitability of those lost sales.
There is a separate matter of whether Apple's patents are invalid. If Sammy gets a new trial, then the validity issue should be re-visited.
20. pliskin1 posted on 22 Oct 2012, 01:15 0 0
Don't forget that Samsung many not even have to pay, if they get their retrial...considering the jury was supposedly biased in the first trial.
14. jroc74 posted on 21 Oct 2012, 23:59 8 0
I have been saying since all this started....if every iPhone has outsold the previous one....how has Apple been harmed financially? Or more specifically, to the tune of 1 billion?
16. -box- posted on 22 Oct 2012, 00:18 1 0
Agreed, and it isn't like samsungs are running ios. Different OS, different capabilities, and different price points. People who would have wanted an iDevice and been of means to purchase one likely did, or would have purchased a true KIRF, not an arguably similar-looking one from one of the world's tech giants. Samsung continued the F700 design language until it replaced that with the nature-themed looks they are attempting to mimic and infuse in their devices with the GS3 onwards
18. Retro-touch posted on 22 Oct 2012, 00:27 1 0
I didn't even think of that. It wouldn't make sense that your sales are harmed if you always outsell, hopefully the damages will be significantly reduced or an appeal might just get this case going in Samsung's favor
17. remtothemax posted on 22 Oct 2012, 00:26 1 0
what they should have done was just get snooki in court and handed her an unmarked galaxy s and an unmarked iphon and if she could tell which is apple and which is samsung from the shape and operating system, samsung wins
if she couldn't, apple wins
22. No_Nonsense posted on 22 Oct 2012, 02:22 1 0
What's that? Not an American.
30. loli5 posted on 22 Oct 2012, 19:42 0 0
I envy you SOOOOOOO much for not knowing what the jersey shore is.
23. tedkord posted on 22 Oct 2012, 02:56 2 0
A terminally stupid, vapid, talentless whore whose 15 minutes should be just about up.
26. Topcat488 posted on 22 Oct 2012, 04:19 0 0
Maybe Apple should pay them underaged Chinese workers 20 cents a day, instead of just 10 cents (ok plus room and board). This would lower their profits and help in this court case. Three CHEERS for the Judge...
27. someones4 posted on 22 Oct 2012, 05:26 1 0
Basically, judge Koh wants Apple to strip in front of the world to see if it is worthy of Samsung's grace
28. Aeires (unregistered) posted on 22 Oct 2012, 08:17 1 0
Wouldn't be surprised if Apple drops the lawsuit, keeping their percentages of overpricing secret is worth more to them than $1 Billion from Samsung.
29. loli5 posted on 22 Oct 2012, 19:35 0 0
Can we have just ONE apple article (I'd prefer to not have any at all, but I digress...) that doesn't mention cupertino? Pretty sure we all know where their compound is, and fairly certain we don't care.