Earlier quoted context omitted.
You are claiming the Google money is 'pure profit' while making phones is not. They are saying that you can't account for the Google money as pure profit, even though the costs aren't as obvious. In particular, their argument says, you have to make and sell the phones before Google will give you money to make their search engine the default. So the Google money is not pure profit, in the same way the phone sales are…
Apple’s profit is increasingly derived from non-hardware sales. That profit is dependent on them having sold hardware. If they sell no hardware they will generate no services revenue or profit. Scroll way back to the root of this conversation. Someone said that $20B is not nothing but is a small fraction of their revenue. I think this is a poor characterization because you need to consider the source of both gross an…
I agree with this wholeheartedly.
From earlier upthread (forrestthewoods-0):
> Apple makes about 60 billion a year in the profit. The 10 billion they get from Google constitutes 16% of their annual profit. That’s significant!
This is the contentious part.
Some of the $10B from Google needs to be allocated against the cost centres that enable the sale, in order to account for it correctly. To put it another way, the marginal cost of this revenue is insignificant but the capital costs are significant.
It is worthwhile to consider marginal and capital costs separately, but it's not reasonable to ignore those upfront costs when making an argument - it comes across as "playing funny buggers with figures" (wyattpeak-1).
So I generally agree with your points, but also agree with people who say you need to factor in the non-marginal costs required to generate the Google revenue.
As a meta point, your comments on goal post moving (while potentially correct - I'm not making a comment on correctness here) don't add to your argument, your argument makes sense without them (and in my opinion would come across better if you left them out).
forrestthewoods-0: https://news.ycombinator.com/item?id=25432024
wyattpeak-1: https://news.ycombinator.com/item?id=25438323