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The article states that a company with high margins, is at risk of being outcompeted by companys with lower prices. This makes sense, but in the case of Apple,
by bfwi 14y ago
The article states that a company with high margins, is at risk of being outcompeted by companys with lower prices. This makes sense, but in the case of Apple, lower priced products have been there for a while and people still choose Apple.
- rednukleus 14y agoApple have <10% share of the desktop/laptop market, about 20-25% of the smartphone market, and <50% of the tablet market. Most of their profit comes from phones and tablets, and in both of these markets their global marketshare has decreased, or at best held steady, in most quarters over the last few years.
- arrrg 14y ago… but in an overall growing market. It’s not necessarily true that competitors are converting owners of Apple devices en masse, it’s much more likely that competitors are able to convert more non-smartphone or tablet users than Apple can. I foresee Apple being just a company that doesn’t grow much in the future but still makes tons of money.
- rednukleus 14y agoThey may well be able to hold on to a niche segment in the market with high margins, but the chances of them holding on to a dominant position and high margins are slim to none. This is the reason for their seemingly low P/E.