4 ms·
One word: positioning. Apple is a luxury product. It is the best. If they started selling not-the-best, it would tarnish their (well-earned, in my opinion) rep
by eldavido 8y ago
One word: positioning.
Apple is a luxury product. It is the best. If they started selling not-the-best, it would tarnish their (well-earned, in my opinion) reputation for always making the best.
I use an Android phone and will freely admit that Apple phones are just better. They have better battery life, brighter and larger displays, better manufacturing (no seams, better materials), much better cameras, faster and better-engineered CPUs, a better app ecosystem, and a whole lot of other stuff (better buying experience, better advertising that contributes to the perception of quality, better post-sale support) that combine for a holistic experience of "better" for users.
The way they make money on used is their 30% cut of all app store revenue. You sell any sort of digital goods, whether Candy crush items, digital music, etc., Apple takes ONE THIRD of that. When you consider the size of Apple's installed base of devices, that ends up being a pretty big number.
Also, Google pays Apple a non-trivial amount of money (widely rumored to be hundreds of millions/year) to be the default search engine on iOS. This amount is so large, it's starting to drag down Google's operating margin (read about "traffic acquisition cost" for google). Yet more money from a bigger base of iPhones.
- lbacaj 8y agoI think that hits the nail in the head. A lot of people are asking why the got rid of the SE model and I think this is exactly why it doesn't actually help with their positioning.
- dwaite 8y agoA lot of people also refuse to acknowledge that SE is meant to stand for "special edition", in which the name itself implies it was an aberration on the product lineup. The SE only existed because the SE wasn't difficult to design and had a high profit margin. Now the SE is gone because integrating the newer technology like Face ID is harder. Come a smaller camera assembly and reduced part costs, we could have another SE show up.
- earenndil 8y ago> Also, Google pays Apple a non-trivial amount of money (widely rumored to be hundreds of millions/year) to be the default search engine on iOS I thought it was known to be $3B?
- cronix 8y agoI think it's actually more than that, but regardless, it's interesting (and disingenuous) for Apple to market themselves to the public as being so privacy conscious, all while making quite a hefty profit by selling their customers data via GOOGLE search, albeit not directly. It's probably the most bang for the buck and most profitable thing in history. I mean, making $3-9B profit for literally a few minutes of work (a default setting in an existing app) is pretty lucrative. No RnD necessary. They are making a LOT money by selling their users data. http://fortune.com/2018/09/29/google-apple-safari-search-engine/ http://fortune.com/2018/09/29/google-apple-safari-search-eng...