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Obviously profit share is the most important, but in consumer electronics it is very hard to keep high profit share with low market share. Electronics have a lo
by hristov 16y ago
Obviously profit share is the most important, but in consumer electronics it is very hard to keep high profit share with low market share. Electronics have a lot of efficiencies of scale so the people with higher market share will eventually start making their stuff much cheaper and thus they will be able to both lower prices and improve their margins, which will really squeeze your profits.
And eventually you will have to be content with selling the same hardware as your competitors with your brand and your own software on it. Sound familiar?
- wmf 16y agoAlthough iOS will have lower market share than Android, the iPad will probably have higher market share than any individual Android tablet, and thus the hardware economy of scale actually goes to Apple. Also, is there any additional economy of scale beyond, say, 10M units per year?
- gamble 16y agoExactly. This is why HP can have so much more of the laptop market, yet Apple's laptops are much better engineered. Apple sells so many units of each SKU that they can afford to spend more designing each one.