I simply found it humorous that as I was pondering what Google is spending a billion dollars a month on in SG&A that the following article from Business Insider's Steven Tweedie flashed across my RSS reader.

The Best Google Campuses Around the World

Perfect timing. I'm not insinuating that Google SG&A spending is out of control. I just have trouble adding up in my head what they are doing with all that money. 

But seriously, I'd hope that the Google board of directors knows full well where that 12 billion dollars went last fiscal year.

In my earlier analysis comparing the income statements of Apple and Samsung Electronics one big thing really jumped out. Selling, General, and Administrative (SG&A) costs are much lower at Apple than they are at Samsung.  How does Apple do it? And it seems like nobody but the pencil pushers really notices.

Ok, maybe it was cool to be seen in public in 2010 with your face glowing from the light of your digital best friend shining upon you, but things are officially out of hand now. Put your portable computers (phones) down people! I work for a large manufacturing company, and I've seen the weirdest thing take place in the last five years. It used to be when I walked into the break room to buy a drink, the place would be full of people having conversations. There was always talk about sports, grandkids, or the latest local crime story. Now? It's silence. And it's an eery silence because there are still just as many people in the room but they are all reading Yahoo or Facebook on their phones. A silent but empty room is normal, calming even. A silent room full of people is unnatural. It's like something out of the Twilight Zone where everyone is frozen in time. 

If international business was the NFL then Tom Brady’s New England Patriots lining up against Peyton Manning’s Denver Broncos would be the equivalent of Apple versus Samsung Electronics. These two giants have had a string of hits recently and have risen head and shoulders above the field. You often hear talk about how much larger Samsung is than Apple, but that depends on how you define Samsung . If you define Samsung as the division that is actually playing on the same field as Apple, that would be Samsung Electronics. This is the crown jewel of the Samsung empire and by far the largest and most prestigious of the groups.

Let’s take a look at their two most recent quarterly income statements. 

Donald Kirk from Forbes magazine writes this about the Samsung merger...

Breakdown Of Samsung Heavy, Samsung Engineering Merger Clouds Lee Father-Son Succession

Ah, the joys of being a larger conglomerate.

I’ve mentioned before that I follow Apple because as a financial analyst, it pays to learn from those who've achieved great success. This also extends to Samsung Electronics because they’ve had a great three year run. They are almost the anti-Apple in the way that they aggressively carpet bomb whatever market they are coveting. There are few companies in the world that can do what they do. 

But I’ve spent a lot of time working for large multi-national conglomerates and I find it quite humorous when internet commenters speak about Samsung as if it is one large company where the ship builders from Samsung Heavy are working along side the chip makers from Samsung SemiConductor. It doesn’t work that way. 

I have yet to see a review do the iPad Air 2 justice in describing how good the new display is so I'm now forced to write about it. This new screen is so much better than last year's that it's worth selling your old Air and going through the hassle of an upgrade, even if this was the only change made! And this is coming from a guy who didn't think that upgrading from the iPad 4th generation to the much lighter iPad Air was worth it and skipped the iPhone 5s because TouchID was boring.

This Forbes article by Ewan Spence makes it official. Samsung came crawling back to Apple.

http://www.forbes.com/sites/ewanspence/2014/12/13/apple-a9-chip-for-iphone-7-made-in-america/

It's ironic that Apple is in the position of saving Samsung Semiconductor since Samsung Mobile has repeatedly attacked Apple's golden goose, the iPhone. But it has been Steve Job's and Apple's philosophy that business is not a zero sum game (but even with that philosophy Steve wasn't willing to allow an insider on the board to use his advance knowledge to create a competing product to go unpunished). I enjoyed watching Steve Jobs and Bill Gates talking about the fine balance between cooperation and competition the other day in Walt Mossberg's classic interview.

I have to admit that before I ran the numbers, I started with the idea that streaming music doesn’t make financial sense. Am I the only one who's turned off by the whole idea of a monthly music bill? Is that not worse than making payments on your dining room table or television? At least by making your monthly couch payments to the local rent-to-own, you have a couch at the end. What happens if you stop making your monthly music payments to Spotify et al? You end up like the proverbial cowboy in the country music song with a whole lot of nothing. 

Adding to my idea that streaming music is the equivalent of setting ten dollar bills on fire is the fact that it's the younger generation who is most attracted to this format.  Isn't this the generation that not only doesn't save money but is actually accumulating debt? I thought the whole iTunes vs Spotify debate was just the latest chipping away at the delayed gratification ethos that makes society work. 

But how much money are we really talking about? Could the instant access to millions of songs justify the amount of money you are losing? Do you really "own" a digital song anyway?

So one week after I estimated that Apple needed to sell at least 21.5 million smartwatches to be relevant, there is new survey information from UBS stating that perhaps Apple will sell 24 million watches.  

Interesting...

http://www.macrumors.com/2014/12/01/apple-watch-ubs-survey/