you miss the more important issue - cash-flow - with software you need almost no cash-flow to scale to infinity, with hardware you have to commit money to wareh

you miss the more important issue - cash-flow - with software you need almost no cash-flow to scale to infinity, with hardware you have to commit money to warehoused hardware - using income from your sales to pay for manufacturing causes a feedback term to kick in to how fast you can scale your market, even if the demand is out of site you can't meet it (the alternative is paying the bank interest)