This is the way forward, nice work!

You're right. This 'strategy' question is a mis-understanding people still have with Bitcoin, I probably should have written about it. My TL;DR is:

Bitcoin is not a business, it doesn't require a staff to run, yet it is still viewed through the same lens as a business acquisition or strategic pivot. If executed right, a Bitcoin purchase changes absolutely nothing about the underlying business.

Bitcoin is nothing more than a tool for MicroStrategy to keep the money they've earned over the last 31 years.

I totally agree with you at the surface, and Microstrategy has been officially saying similar.

However, the company is starting to look more and more like a Bitcoin ETF. The CEO is out promoting bitcoin much more than his company's services. The stock is trading increasingly in line with the bitcoin price...

This may very well be a genius strategic move on their part, but lets call a spade a spade. At this point, in the eyes of investors, the company is increasingly tied to the success or failure of bitcoin.

Dare I call it a publicity stunt for a product which isn't great compared to what its competitors offer? Nevermind that, lets focus on them investing in bitcoin

It's actually worth $343 million now (he paid $175M earlier this year)

Here is a table of all publicly available Bitcoin holdings as of December 12th: https://www.kevinrooke.com/bitcoin

That website has two different metrics: "current value" and "fair value".

Are they saying the market price of a coin isn't "fair"?

Those appear to be the value of their holdings as USD trade at that moment in time. Check the date on the far left.

Hm I only see “current value” now.

It's mentioned in the different Holding History charts a little further down the page.

Correct, and being in orbit is not a requirement to be considered an astronaut. The threshold for being "in space" is 80km of altitude, a height that all Virgin Galactic customer flights will pass.

It is only considered astronautics among those who haven't orbited.

On Virgin you get a glimpse of curved horizon, and stars in daytime, at the expense of about the filthiest kind of rocket ever used. Really, the fuel is basically burning tires.

Also, sources are updated in the article. Thanks for mentioning the lack of links.

Yup, good point. It's not possible to extract AirPods from Apple and still have them be as successful. But it's illuminating to isolate the business against a backdrop of other top tech companies. It's kind of like Apple spawned Silicon Valley's hottest new tech company in 2016.

Correct, these are all estimates. And the sales split is unclear, but both Airpods 2 and Airpods Pro have the benefit of launching before the holidays. They got a disproportionate number of sales from those 2 months. Even if everyone went with the $150 version (which is impossible), Airpods revenue would still be $9 billion at 60 million units. The point still stands though, Apple is making a killing off Airpods. Whether the exact number is $9 billion or $15 billion isn't as important.

I am of course not debating that AirPods are successful. However,

- If one random sales estimate is $6 billion and the other is $12 billion, it is clear that there isn't enough information out there, or something else is amiss. This isn't just a margin of error difference, and would completely change the graph in the parent article.

- There is nothing useful to be taken away from comparing its sales numbers against a bunch of SaaS companies. Here's a better idea - put it on a graph along with sales of Echo, Fire TV, Philips Hue, Chromecast, Roku, Ring, Tile, Duracell AA Battery, GoPro etc.

I would find an estimate like "AirPods make more money than Spotify" interesting; its a sort-of poetic "the hardware you use to listen to the music is worth more than the music itself", at least in a limited scope (of course, the entire audio hardware industry is larger than Spotify, but is the entire audio hareware industry larger than the entire music recording industry? idk).

> the hardware you use to listen to the music is worth more than the music itself

Which still isn't a useful comparison.

One is an outright purchase, and the other a subscription service.

True. But $10 x 12 = $120 subscription per year. That's a decent buck and a fairly large market.

And on a long term, more profitable probably. We won’t see Spotify disappearing for a while.

Spotify rents music that it itself rents from 3 companies that own most of the music. Why would those 3 companies not just raise their rents if Spotify starts making a decent profit?

Spotify has been around since 2006 and just eked out a tiny profit last year. Unless they plan on owning music themselves, I don’t see why the music owners wouldn’t try to capture most of the profit.

Or. Flip that over. What happens to the music owners if one of their primary distributors goes under?

As long as Apple, Google, and Amazon are willing to forgo margins on music, not much.

I never said it would be Useful. I said it would be Interesting.

I primarily use airpods for making calls, and over the ear headphones for music.

I guess you haven't met an audiophile?

Music fans buy stereo/audio equipment to listen to their music.

Audiophiles buy music to listen to their stereo/audio equipment.

I have met audiophiles. The impression I get is that having nice headphones "on the go" is not a priority and people live with the low quality of small-and-wireless headphones.

Very few audiophiles are sitting at their desk using Airpods, though. In that market, wired headphones rule supreme. (Many people are using wireless noise-cancelling headphones, however, not for audio quality but because "work" is too loud for people to work. At my last job, they even had Sonos speakers around playing music all day. It was crazy!)

1) I don't know the estimates but I see it on the streets. Everyone and their dog has AirPods. I already have seen people with Pro version as well. I do not see people walking with their GoPros. If I go skiing I don't see people with their GoPro (people mostly just go skiing and then do some pictures with their phones from what I noticed), Chromecast I have seen some but not as many. There is no comparison.

2) There is one interesting thing. Everyone would say "make software" because it is easily scalable and you want scalable business. You don't want to make physical things, because making business on physical things is not scalable. Now Apple is showing that making physical things makes loads of money if you are Apple. So still making physical things can make more money than making SaaS.

"If you are Apple" is the key part of it. A software company can be successful with a bunch of programmers and their laptops, and can go head-to-head with Google, Facebook or anyone else. That describes all the startups on the list. To emulate AirPods' success you need:

- a chip design/fabrication team

- a battery design team

- procurement specialists and high-volume vendor contracts in Asia, with assembly lines ready to go at moment's notice

- a logistics, operations and distribution pipeline in every market in the world

- the most successful product in the world (iPhone) which you can attach your sales to

- billions in marketing and advertising budgets

- premium retail locations across the world

AirPods are NOT a startup, and should not be compared to other startups. "Make software" is definitely still good advice for the vast majority of entrepreneurs out there.

+ some of the best product and interaction designers in the world who lead the definition of the product specs from a user perspective

I have an ex-coworker who did a consulting contract for Apple Air Pods Pro design.

You will not believe how low key was that project. It could've easily been a design from an average if not a lower tier OEM.

Perhaps it was (relatively) easy. What made it easy was precisely that it was Apple: full & willing integration with the iOS ecosystem. A couple UI clicks/taps, if not outright automatic, and your AirPods are happily talking to the device you want to hear from.

All competitors have to cope with interface limitations and API inadequacies. Even one extra obligatory UI step can practically ruin the experience (as compared to AirPods).

Getting to the point where deep integration is easy ... is hard.

Including the W1 and H1 silicon?

Given that the man is an analog extraordinaire, there shouldn't be any reason for them to hire him for anything but that I believe.

Are you saying the H1 and W1 could have been designed by a lower tier OEM?

Yes, that's a walk in the park ASIC

Odd that nobody did it before Apple.

Or, build hardware for business verticals. Where market sizes are just double digit billions and Apple will not play.

This is the big takeaway. The article saying “AirPods are X single digit percentage of apples revenue” (even if slightly wrong) means that there are probably other single-digit-billion-dollar verticales not worth it to Apple to exploit.

It’s already a meme on college campuses that you aren’t cool if you still have the ‘long stems’. I’d say pros are doing well.

Interesting.

Am college student, have not heard of this yet.

Of course you can make money making physical things.The only problem is you either make them premium or you have to sell zillions of units to make profit. We have "Apple" in every industry ( fashion, automotive, catering,etc.), however that's still only a handful.Making software is probably more likely to earn you tons of meney.

Which companies in the fashion industry are Apple-like?

Its a conglomerate and many brands, but LVMH is probably the closest comparison of an Apple to fashion.

It’s a luxury brand group, but has price points that go from attainable to stratospheric.

If I had to pick one label, I would choose Burberry (fitting, since Apple went on a Burberry hiring spree a number of years ago, and not just for retail but in design) or Marc Jacobs (which is part of LVMH).

LVMH.I believe it was Bernard Arnault who said that only luxury products can command luxury margins.

You should make software because you're not Apple, and don't want to compete with Apple.

And none of those have high profit margins. So while the revenue may be good, the profit isn’t.

We know that Roku doesn’t make much of anything from hardware sells - the CEO said they aren’t trying to make a profit from the hardware, but ad sales and subscription revenue.

> If one random sales estimate is $6 billion and the other is $12 billion, ...

... then it still sounds like they are making billions of dollars on mere headphones. Fascinating.

We also have no idea what the margins are on AirPods. It's not at all accurate to apply overall Apple gross margins (which include high-margin offerings like their services and iPhones) to AirPods, which are likely one of their lowest margin products.

We have a decades of prior history knowing that Apple doesn’t sell much of anything without a large profit margin.

Besides there are plenty of almost as good knock offs st half the price.