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> the market has punished [Apple] for it You're serious? They take 73% of the profit in smartphone market, with Samsung at the second place (26%) and HTC, thir

> the market has punished [Apple] for it You're serious? They take 73% of the profit in smartphone market, with Samsung at the second place (26%) and HTC, third (1%), their stock is booming, they have more money in the bank than all of their competitors combined (they can buy Samsung, HTC and Dell and shut them down and still have a few billion dollars left). I'd call that reward, not punishment. http://www.asymco.com/2012/05/03/the-phone-market-in-2012-a-tale-of-two-disruptions/ http://www.asymco.com/2012/05/03/the-phone-market-in-2012-a-...

cageface 14y ago
Their market share is rapidly falling wrt Android. There's no way they can maintain that profit share if this continues and they know it.
- pooriaazimi 14y ago
  You're certainly entitled to your opinion, but I disagree. I find Apple's strategy more solid and sustainable than their competitors'. BTW, I just wanted to say you have a GitHub link on your HN profile that leads to a 404. I thought maybe that was a mistake and you might want to fix it :)
  - cageface 14y ago
    It seems like essentially the same strategy that lost them the desktop wars after taking an early lead with the Mac. I don't see why we should expect things to be any different this time, although their vertical approach is better suited to mobile. Thanks for heads up on github. Fixed.
    - deleted 14y ago
      [deleted]
    - jfb 14y ago
      I can't see a meaningful analogy with the old Apple; to assert one is to assume that totally divergent situations (Apple owning a market wholesale, versus being a niche player) and companies (Apple 2012 is very different from Apple 1998) somehow combine in a way that papers over the very real changes that have happened internal and externally.
    - eddieplan9 14y ago
      ...that lost them the desktop wars after taking an early lead with the Mac The fact is that they never took an early lead with the Mac [1]. They did take an lead with iPod. See how that worked out quite well for them. [1] http://arstechnica.com/business/2012/08/from-altair-to-ipad-35-years-of-personal-computer-market-share/2/ http://arstechnica.com/business/2012/08/from-altair-to-ipad-...
    - angryasian 14y ago
      >The fact is that they never took an early lead with the Mac @eddieplan You might not be old enough to remember but the macintosh and earlier apple computers were the first commercially successful computers for the home market.
    - angryasian 14y ago
      >The fact is that they never took an early lead with the Mac @eddieplan You might not be old enough to remember but the macintosh and earlier apple computers were the first commercially successful computers for the home market.
    - jsz0 14y ago
      Apple can't really win on market share or their business model would be impossible to sustain on anti-trust grounds alone. The iPod was the only exception/fluke and IIRC there were some rumblings from the EU about it. The Bush DOJ was too 'business friendly' to worry much about it. Apple could make a market-share grab anytime they wanted to but they also realize it's suicide to do so. Better to own 30% of the market and 75% of the profits than 75% of the market and 30% of the profits. I don't know if they can sustain that but they probably won't shake things up until they are forced to. Don't mess with a good thing right?
  - kamechan 14y ago
    If by "strategy" you mean patenting obvious and likely things that already existed and then litigating the crap out of people, you may be right...this trial has set a precedent that might make that sustainable for them.
recoiledsnake 14y ago
>They take 73% of the profit in smartphone market I chuckle every time I hear this. How much profit of the web server market does Microsoft take with IIS vs. the free alternatives like Apache and Nginx? Who wins in the Server OS market of Windows Server vs. Linux/BSD? Who dominates the web dev tools market of Visual Studio vs. Eclipse/etc. ? The same arguments you make can be made against the above too. The idea of profit share as the metric was hyped up by the Apple fan blog network of Gruber-Siegler-Asymco etc. First, when Android had lower market share, they made numerous claims and 'analysis' that said Android could never overtake iPhone. When that did happen, for some time, they added the iPad to the mix by making it iOS vs. Android instead of just the mobile market and declared Apple the winner. And then later came up with the profitshare argument. Looks like the only metric that matters is what makes Apple the winner. One example of a bizarre comparison(sneering and snarky as usual) http://daringfireball.net/linked/2012/07/27/amzn http://daringfireball.net/linked/2012/07/27/amzn Since when did profit become the one and true metric? I realize that they're writing what their audience wants to read, my only peeve is how much airtime their posts and arguments are given on HN. Meanwhile Paul Thurrott's Winsupersite is hellbanned on HN just for being a Microsoft watcher site. Draw your own conclusions.
- bkorte 14y ago
  You do understand that businesses exist to make money, right? Profit share is one of the few metrics that matter.
  - justincormack 14y ago
    But Android is not there to make money, it is there to stop Apple taking over mobile and so cutting out Google from that business, so Google as a whole makes money.
- tptacek 14y ago
  Since when did profit become the one and true metric? This is like wondering whether you'd be better off running a grocery store rather than a software business. Profit is the only metric. The idea that this notion started with Apple is strange.
chairsofter 14y ago
This is what I don't get: people applaud Apple for their massive profit margins when in reality it just shows how they're screwing the consumer. Does nobody care about the betterment of the general public -us!?- around here? By buying products with huge profit margins you're spending money on features that you're not getting. And THAT is why I refuse to buy Apple products.
- glenra 14y ago
  Trade is generally a positive-sum game. The fact that the producer makes a profit means there is a producer surplus but the fact that consumers buy it means there is a consumer surplus too. The general public thinks iPhones are worth more than what Apple is charging, so they buy it. By buying products with large profit margins you're sending a message that you want the company to stay in business and grow and keep doing what it's doing. > By buying products with huge profit margins you're spending money on features that you're not getting. No, part of what makes Apple so valuable is that they resist adding more "features" than the bare minimum, in favor of trying to preserve their best feature: simplicity.
  - creamyhorror 14y ago
    'Consumer surplus' is an economic term, and it's simply a calculated or derived quantity. The fact of the matter is, marketing can change opinions on what a product is worth, or whether it should be bought. Surplus, in other words, is very much manipulable by marketing and advertisement. Consumers think iPhones are worth buying because Apple managed to convince them, and their friends, of it. Not because they may inherently provide more utility/enjoyment over their lifespan than a product from a competitor. I don't mean to imply Apple products are overpriced in general. I mostly just prefer to discount/devalue marketing when making decisions on what to buy, and instead focus on the features that are important to me.
  - ZeroGravitas 14y ago
    The standard free market theory is that profit attracts competitors that enter the market and drive down those profits. They would have gotten away with it too if it wasn't for those pesky patents.

cageface 14y ago

Their market share is rapidly falling wrt Android. There's no way they can maintain that profit share if this continues and they know it.

pooriaazimi 14y ago
You're certainly entitled to your opinion, but I disagree. I find Apple's strategy more solid and sustainable than their competitors'. BTW, I just wanted to say you have a GitHub link on your HN profile that leads to a 404. I thought maybe that was a mistake and you might want to fix it :)
- cageface 14y ago
  It seems like essentially the same strategy that lost them the desktop wars after taking an early lead with the Mac. I don't see why we should expect things to be any different this time, although their vertical approach is better suited to mobile. Thanks for heads up on github. Fixed.
  - deleted 14y ago
    [deleted]
  - jfb 14y ago
    I can't see a meaningful analogy with the old Apple; to assert one is to assume that totally divergent situations (Apple owning a market wholesale, versus being a niche player) and companies (Apple 2012 is very different from Apple 1998) somehow combine in a way that papers over the very real changes that have happened internal and externally.
  - eddieplan9 14y ago
    ...that lost them the desktop wars after taking an early lead with the Mac The fact is that they never took an early lead with the Mac [1]. They did take an lead with iPod. See how that worked out quite well for them. [1] http://arstechnica.com/business/2012/08/from-altair-to-ipad-35-years-of-personal-computer-market-share/2/ http://arstechnica.com/business/2012/08/from-altair-to-ipad-...
  - angryasian 14y ago
    >The fact is that they never took an early lead with the Mac @eddieplan You might not be old enough to remember but the macintosh and earlier apple computers were the first commercially successful computers for the home market.
  - angryasian 14y ago
    >The fact is that they never took an early lead with the Mac @eddieplan You might not be old enough to remember but the macintosh and earlier apple computers were the first commercially successful computers for the home market.
  - jsz0 14y ago
    Apple can't really win on market share or their business model would be impossible to sustain on anti-trust grounds alone. The iPod was the only exception/fluke and IIRC there were some rumblings from the EU about it. The Bush DOJ was too 'business friendly' to worry much about it. Apple could make a market-share grab anytime they wanted to but they also realize it's suicide to do so. Better to own 30% of the market and 75% of the profits than 75% of the market and 30% of the profits. I don't know if they can sustain that but they probably won't shake things up until they are forced to. Don't mess with a good thing right?
- kamechan 14y ago
  If by "strategy" you mean patenting obvious and likely things that already existed and then litigating the crap out of people, you may be right...this trial has set a precedent that might make that sustainable for them.

recoiledsnake 14y ago

>They take 73% of the profit in smartphone market I chuckle every time I hear this. How much profit of the web server market does Microsoft take with IIS vs. the free alternatives like Apache and Nginx? Who wins in the Server OS market of Windows Server vs. Linux/BSD? Who dominates the web dev tools market of Visual Studio vs. Eclipse/etc. ? The same arguments you make can be made against the above too. The idea of profit share as the metric was hyped up by the Apple fan blog network of Gruber-Siegler-Asymco etc. First, when Android had lower market share, they made numerous claims and 'analysis' that said Android could never overtake iPhone. When that did happen, for some time, they added the iPad to the mix by making it iOS vs. Android instead of just the mobile market and declared Apple the winner. And then later came up with the profitshare argument. Looks like the only metric that matters is what makes Apple the winner. One example of a bizarre comparison(sneering and snarky as usual) http://daringfireball.net/linked/2012/07/27/amzn http://daringfireball.net/linked/2012/07/27/amzn Since when did profit become the one and true metric? I realize that they're writing what their audience wants to read, my only peeve is how much airtime their posts and arguments are given on HN. Meanwhile Paul Thurrott's Winsupersite is hellbanned on HN just for being a Microsoft watcher site. Draw your own conclusions.

bkorte 14y ago
You do understand that businesses exist to make money, right? Profit share is one of the few metrics that matter.
- justincormack 14y ago
  But Android is not there to make money, it is there to stop Apple taking over mobile and so cutting out Google from that business, so Google as a whole makes money.
tptacek 14y ago
Since when did profit become the one and true metric? This is like wondering whether you'd be better off running a grocery store rather than a software business. Profit is the only metric. The idea that this notion started with Apple is strange.

chairsofter 14y ago

This is what I don't get: people applaud Apple for their massive profit margins when in reality it just shows how they're screwing the consumer. Does nobody care about the betterment of the general public -us!?- around here? By buying products with huge profit margins you're spending money on features that you're not getting. And THAT is why I refuse to buy Apple products.

glenra 14y ago
Trade is generally a positive-sum game. The fact that the producer makes a profit means there is a producer surplus but the fact that consumers buy it means there is a consumer surplus too. The general public thinks iPhones are worth more than what Apple is charging, so they buy it. By buying products with large profit margins you're sending a message that you want the company to stay in business and grow and keep doing what it's doing. > By buying products with huge profit margins you're spending money on features that you're not getting. No, part of what makes Apple so valuable is that they resist adding more "features" than the bare minimum, in favor of trying to preserve their best feature: simplicity.
- creamyhorror 14y ago
  'Consumer surplus' is an economic term, and it's simply a calculated or derived quantity. The fact of the matter is, marketing can change opinions on what a product is worth, or whether it should be bought. Surplus, in other words, is very much manipulable by marketing and advertisement. Consumers think iPhones are worth buying because Apple managed to convince them, and their friends, of it. Not because they may inherently provide more utility/enjoyment over their lifespan than a product from a competitor. I don't mean to imply Apple products are overpriced in general. I mostly just prefer to discount/devalue marketing when making decisions on what to buy, and instead focus on the features that are important to me.
- ZeroGravitas 14y ago
  The standard free market theory is that profit attracts competitors that enter the market and drive down those profits. They would have gotten away with it too if it wasn't for those pesky patents.