A Message To Eric Schmidt And Android: Put Up Proof Of Profits Or Shut Up

on October 11, 2012
Reading Time: 3 minutes

There will be one billion Android devices—smartphones and tablets—in use within a year, Google chairman Eric Schmidt said.

Schmidt made the prediction during an interview with AllThingsD’s Kara Swisher and Walt Mossberg at the 92nd Street Y in New York Wednesday night.

Google is activating 1.3 million Android devices a day.

“Do the math,” Schmidt said. ~ via Business Insider

Doing The Math

All right, Mr. Schmidt. I’ll do the math. Activations are only part of the equation. The numbers that you keep conveniently not telling us are margins, revenues and profits. Activations without those numbers are meaningless. Market share without those numbers are meaningless. You want us to do the math, Mr. Schmidt? Your numbers – without context – are mathematically meaningless.

Now I have no doubt that Android has margins, has revenues, has profits. I have no doubt that Android is making money. What I SERIOUSLY doubt is just how much money Android is making. You want us to take you seriously, Mr. Schmidt? Tell us those numbers.

Market Share Myopia

We are OBSESSED with market share numbers when we should be obsessed with profit.

— Market share is a COMPONENT of profits. It means nothing in and of itself.
— Market share is the factor. Profit is the solution.
— Market share is just one of many top lines. Profit is the one and only bottom line.
— Market share is the means. Profit is the ends.
— Market share is not the goal. Profits are the goal.

Where Are The Numbers?

A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large. ~ Henry Ford

So where are Google’s numbers for Android? They have them. They’re just not sharing them. Why do you suppose that is?

When a company has favorable numbers, they shout them from the mountain tops. When a company has numbers that are unfavorable, they remain stoically silent. This is the industry norm.

— Apple seldom talks about Apple TV
— Samsung stopped reporting their tablet sales numbers
— Amazon never reveals sales or profit numbers for the Kindle Fire
— Microsoft actually does reveal the exorbitant amounts they lose on Bing. Go figure.

When a company says nothing about a product’s profits, they are telling us something. And that something is not good. Their silence speaks volumes.

No Profit, No Glory

“Business is all about solving people’s problems – at a profit.” ~ Paul Marsden

It is somewhat ironic that I keep reading stock market “bears” claiming that Apple is a “bubble” when Apple is one of the few companies that actually reveals their numbers and is built upon a solid foundation of revenues and profits. If a company wants recognition, if a company wants to be taken seriously, if a company wants us to respect what they do, then they need to reveal their profits.

There should be a new rule when reporting on companies. Unless a company is making a profit, words like “successful”, “winning”, “dominating”, and such should be banished. If a company wants the glory, they should have the guts to reveal their profits.

Market Share and Margins and Profits, Oh My!

Everyone obsesses over market share but anyone can achieve market share if they don’t care about profits. All they have to do is lower their prices or sell their goods or services at a loss.

— Market share is easy.

— Profit is hard.

— Market share plus profit share is genius.

Stop Talking About…

The worst crime against working people is a company which fails to operate at a profit. ~ Samuel Gompers

Now here come the excuses, the rationalizations, the justifications. “But, but, but…profit isn’t everything! There are more important things like…”

Please stop. There’s nothing more important to a business than profits. Stop talking about:

— market share without context.
— how much profit you’re going to make in some distant, undefined future.
— how much you’re making from some undisclosed and undiscoverable content, advertising, data gathering or other nebulous activity.
— how your business model is different and it shouldn’t be compared to other companies. You’re wrong. Every company’s profits can and should be compared. Profits are the great equalizer.

The proof is in the profits. If you don’t the have profits, you don’t have the proof. And if you don’t have the proof, then please, just stop talking.