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View Diary: Boycott Apple, Tax Dodger? (48 comments)

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  •  When Apple repatriates the money (3+ / 0-)
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    Roger Fox, koNko, virginislandsguy

    (which it eventually will have to do, someday) it will owe more in US taxes than it would have if it had paid taxes to foreign governments. That is the way most offshore taxpayers elect to pay US taxes. In a (complicated) sense, the foreign tax payments are deductible for US corporate income tax purposes. So in the long run, this is a good thing for the American taxpayer.

    In any event, agree or disagree, a boycott of Apple? Really?

    •  Maybe not entirely (1+ / 0-)
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      I'm reasonably sure some of that $tockpile will erode over the next several years as Apple faces more price pressure and begins to sell lower margin products in developing markets to arrest the loss of market share it is currently experiencing.

      Right now, Apple and Samsung make virtually all of the profits in smartphone and a majority in tablets, and they have nowhere to go but down.

      Apple has already taken a hit on profitability by introducing the iPad mini, a lower margin product cannibalizing iPad sales. Going forward, they face more of the same as developed markets reach saturation with iPhone and iPads and sales decline to "replacement" verses "growth".  

      To get share in developing markets, they need some lower cost models, but to avoid killing the brand, they can't sell crappy phones but rather, cheaper (not cheapest) quality phones that capture enough market share to sustain their franchise. And it has to be noted that in most developing markets, phones are not subsidized so people have to pay the full price up-front and they earn less to begin with, so although they may want a nice iPhone of Galaxy Sx, they may not afford one, and while Samsung has this covered with lower priced products, Apple does not.

      This means lower margin business in the future.

      Remember when Nokia and Motorola were in Apple's position?

      Are they profitable today? Crap, Motorola is a ward of the Google State and Nokia barely back from the edge of bankruptcy and likely to fail.

      Something tells me that on the way to avoid becoming road kill, they will use a lot of that cash.

      400ppm : what about my daughter's future?

      by koNko on Mon May 20, 2013 at 06:29:25 PM PDT

      [ Parent ]

      •  Well, if that's the case, (1+ / 0-)
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        then their losses and gains will net out in the end and the point of paying taxes is moot anyhow.

        •  I agree. (1+ / 0-)
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          It's not going to be a popular position here, but people should ask themselves where Motorola, Ericsson (then Sony-Eriscsson, now Sony), Nokia et al are today, They were once very profitable global leaders in the industry and now they are hanging by a thread.

          Apple is now #1 in the USA (having taken back the crown from Samsung in the last quarter) but globally their market position has eroded and Samsung leads by a mile, and developing markets is where the growth is going to come from.

          China is Apple's #2 market today and they are something like #5 or #6 here because their products are expensive. They need lower priced models to grow and stock analysts know it. Stand-by for "iPhone Junior", I'm pretty sure we will see it soon.

          400ppm : what about my daughter's future?

          by koNko on Mon May 20, 2013 at 06:41:35 PM PDT

          [ Parent ]

    •  It doesn't have to do it and it won't. (1+ / 0-)
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      At least not most of it.

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