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I see the pitfals of a non-scalable business model. Apple has a few parts of their business that do not scale well: retail stores and app vetting process. In e

by DenisM 17y ago

I see the pitfals of a non-scalable business model. Apple has a few parts of their business that do not scale well: retail stores and app vetting process. In either case the per-employee marginal revenue is small in these sectors and so the cost has to be managed. Same is not true for scalable businesses such Mac OS X development where per-employee marginal revenue is very high and you can actualy afford to hire the brightestand and train them well.

froo 17y ago
I see the pitfals of a non-scalable business model. And yet only recently Techcrunch did a piece on just how profitable Apple's mobile phone business actually is. http://www.techcrunch.com/2009/06/01/the-spoils-go-to-the-smartest-apple-and-rim-take-majority-of-cell-phone-industry-profits/ http://www.techcrunch.com/2009/06/01/the-spoils-go-to-the-sm... They have a large chunk of the mindshare when it comes to mobile phones, they're making a bucketload in sales, not only in phone but with apps... just how is that not a scalable business model? Do you have any data to backup your claim?
- DenisM 17y ago
  Firstly, Wal-Mart is hugely successful and their business does not scale at all. If you find yourself in such business you have to be very good at controlling costs, but you can still be very profitable. In the case of Apple I perhaps should be more accurate - their business has parts that do not scale well and parts that do scale well. The stores and the app review parts do not scale, therefore Apple must be super-diligent in controlling costs there. Result of cost-control is of course less trained and less well paid personnel. Hence the gaffes with review process are to be expected. Apple's fault is in not designing a proper escalation process (other than the "Techcrunch PR egg-on-face channel") . By the way, the jury is still out on how much the app sales are bringing to Apple and what are the costs of the review process. I've seen analysis (can't find it now) that has shown Apple is barely breaking even on the apps themselves and make all their money on hardware. Which is nothing new - they used to make next to nothing from iTunes music store and make a lot of money with iPods. So the more reasons to control costs.

by DenisM 17y ago

froo 17y ago

I see the pitfals of a non-scalable business model. And yet only recently Techcrunch did a piece on just how profitable Apple's mobile phone business actually is. http://www.techcrunch.com/2009/06/01/the-spoils-go-to-the-smartest-apple-and-rim-take-majority-of-cell-phone-industry-profits/ http://www.techcrunch.com/2009/06/01/the-spoils-go-to-the-sm... They have a large chunk of the mindshare when it comes to mobile phones, they're making a bucketload in sales, not only in phone but with apps... just how is that not a scalable business model? Do you have any data to backup your claim?

DenisM 17y ago
Firstly, Wal-Mart is hugely successful and their business does not scale at all. If you find yourself in such business you have to be very good at controlling costs, but you can still be very profitable. In the case of Apple I perhaps should be more accurate - their business has parts that do not scale well and parts that do scale well. The stores and the app review parts do not scale, therefore Apple must be super-diligent in controlling costs there. Result of cost-control is of course less trained and less well paid personnel. Hence the gaffes with review process are to be expected. Apple's fault is in not designing a proper escalation process (other than the "Techcrunch PR egg-on-face channel") . By the way, the jury is still out on how much the app sales are bringing to Apple and what are the costs of the review process. I've seen analysis (can't find it now) that has shown Apple is barely breaking even on the apps themselves and make all their money on hardware. Which is nothing new - they used to make next to nothing from iTunes music store and make a lot of money with iPods. So the more reasons to control costs.