Apple is NOT a technology company, it is a MARKETING company

[c1ue]

I was reading another ra-ra article on Apple which crystallized my thoughts on them.

Apple should not be considered a technology company at all.

Rather, they should be considered as a technology equivalent of LVMH - a marketing company for 'luxury' products.

Consider Apple's annual report - a less illuminating document is hard to find.

However, just looking at their spending vs. Intel as a percentage of revenue:

Apple R & D: 4% of revenue in 2006
Intel R & D: 16.6% of revenue in 2006

Apple General expenses (including sales and marketing): 17% of revenue in 2006
Intel General expenses: 17.2%

I would argue that Intel's percentages are somewhat exaggerated due to their ongoing price war with AMD, further that general admin. expenses would be higher since they are a much larger company both in terms of capital stock and employees.

Then let's look at LVMH:

LVMH actually splits out cost of sales and marketing/selling expenses...

Cost of sales: 35.8%
Marketing and selling expenses: 35.04%
General and administrative: 8.4%

Cost of sales is cost of product - not exactly R & D. On the other hand, LVMH owns no factories.

[Tet]

I was reading another ra-ra article on Apple which crystallized my thoughts on them.

Apple should not be considered a technology company at all.

Rather, they should be considered as a technology equivalent of LVMH - a marketing company for 'luxury' products.

Consider Apple's annual report - a less illuminating document is hard to find.

However, just looking at their spending vs. Intel as a percentage of revenue:

Apple R & D: 4% of revenue in 2006
Intel R & D: 16.6% of revenue in 2006

Apple General expenses (including sales and marketing): 17% of revenue in 2006
Intel General expenses: 17.2%

I would argue that Intel's percentages are somewhat exaggerated due to their ongoing price war with AMD, further that general admin. expenses would be higher since they are a much larger company both in terms of capital stock and employees.

Then let's look at LVMH:

LVMH actually splits out cost of sales and marketing/selling expenses...

Cost of sales: 35.8%
Marketing and selling expenses: 35.04%
General and administrative: 8.4%

Cost of sales is cost of product - not exactly R & D. On the other hand, LVMH owns no factories.
I get the feeling that all this free advertising is costing a very large fortune, I wonder how much Apple pays people to bog 24/7 about how great Apple is.