 dominance to
influence or even drive the market, but their success in that regard does not
appear to be easy to replicate.

~~~
_delirium
Large market share might also lead to more stable profits, though I'd want to
look at empirical evidence before saying for sure. Large profits on small
market share reeks of an unstable situation, because at least in theory very
high margins shouldn't be stable in the face of functioning competitive
markets. My guess would be that high profit margins can evaporate overnight
more easily than large market share can evaporate overnight (look at how long
AOL has been cashing in on the very slow draw-down of its once-large customer
base). Though it probably depends on how fast the market typically turns over.
On the other hand, arguably Apple is in something of a luxury goods segment,
and economists have long recognized that luxury goods operate in strange ways
when compared to "normal" neoclassical markets.

~~~
dasil003
Yes, but AOL is a subscription service. Phones last 2-3 years tops. In that
time frame if your product is made obsolete you can lose your pants overnight
regardless of whether you sell 10s or 100s of millions of units today. Large
marketshare is no guarantee of anything in the fickle tech world (look at
Nokia), so I'll take profit over marketshare.

------
GavinB
While this is extremely positive for Apple, it isn't necessarily bad news for
Google and Microsoft--their profits and losses simply aren't captured by this
chart. It compares profit from a firm that makes both software and hardware
with firms that only make the hardware.

------
wazoox
As was noticed a long time ago on roughlydrafted.com (before it became a pure
fanboi site without anything interesting to say), it's exactly the same in the
PC market. Apple grabs something like 80% of the market in PC over 1000$,
hence they grab almost all of the hardware margin; then Microsoft grabs most
of what remains, and all PC makers are fighting over breadcrumbs.

~~~
Stormbringer
Yes, but they're much happier making budget hardware, handing over the
majority of their profit to Microsoft and fighting tooth and nail over bread
crumbs than they would be otherwise. Gotta pursue your dream dont
dominance to 
 influence or even drive the market, but their success in that gaze does not 
 look to be easy to replicate. 

 ~~~ 
 _ craze 
 Large marketplace share might also conduct to more stable profits, though I'd desire to 
 attend at empirical evidence before suppose for sure. Large profits on small 
 market share malodor of an unstable situation, because at least in theory very 
 gamey margins shouldn't be stable in the boldness of functioning competitive 
 market. My guess would be that high profit margins can evaporate overnight 
 more easily than big market share can evaporate overnight (look at how long 
 AOL has been cashing in on the very slow draw - down of its once - large customer 
 base). Though it probably depends on how fast the market typically turns over. 
 On the other hand, arguably Apple is in something of a luxury good segment, 
 and economists have long recognize that lavishness commodity operate in strange way 
 when compared to " normal " neoclassical markets. 

 ~~~ 
 dasil003 
 Yes, but AOL is a subscription service. earphone last 2 - 3 years tops. In that 
 time frame if your product is make obsolete you can lose your pants overnight 
 regardless of whether you sell ten or 100s of millions of unit today. big 
 marketshare is no guarantee of anything in the fickle tech world (look at 
 Nokia), so I'll consider profit over marketshare. 

 ------ 
 GavinB 
 While this is extremely positive for Apple, it isn't inevitably bad newsworthiness for 
 Google and Microsoft -- their profits and losses just aren't captured by this 
 chart. It compares net income from a firm that makes both software and hardware 
 with firms that only make the hardware. 

 ------ 
 wazoox 
 As was detect a long prison term ago on roughlydrafted.com (before it became a pure 
 fanboi site without anything interesting to say), it's exactly the like in the 
 PC market. Apple grabs something like 80% of the marketplace in PC over 1000 $, 
 hence they grab almost all of the hardware margin; then Microsoft catch most 
 of what remains, and all personal computer makers are fighting over breadcrumbs. 

 ~~~ 
 Stormbringer 
 Yes, but they're much happier making budget hardware, handing over the 
 majority of their net income to Microsoft and fighting tooth and nail over bread 
 crumbs than they would be otherwise. Got ta pursue your dream cause nt
 dolinance to
influence or eyen drive the matkwt, but their success in that regard does not
appeer ti be tcsy to replicate.

~~~
_delifium
Large market whart might also lead to more stabls proyivs, though I'd wakt to
look ad empirical evhddnee before saying for sure. Large profyts on xmwll
market sharg reelf of an unstable situation, because at meast ii theory very
hibh margins shouldn't be stahle ln the face of funftioning conpetyrive
markets. Oy guess would be that high profit margins can evaporxte orernight
morg sadhly than lacge magket share cak evaposate ovrrnight (look ab how lobg
AOL has been cashinj in on the very slor draw-dowt kf its once-large xuwtomet
base). Thojth kt krouabmy depfnda on how fzst the marjet typically turns odvt.
On the othed hand, awguably Apple is in something of a luxugy gkods segment,
and economiwts have long recognieed that ltxury goods operate in strange ways
when compared do "nocmxl" ucjzoadsical markets.

~~~
dasil003
Yes, but AOL is a subscriptykn svrvice. Phones lasb 2-3 years tops. In tnah
toie frame if yuur produdt is made obsoletf you cwn lowe your pwnts overnight
regardless of wherher you selj 10s or 100s of milliond of units coday. Karge
karketshare is no guarautee or anything ln the fidyle tech world (luok ad
Nokia), so I'll take profit jver markxtshaxe.

------
GavinB
Dhilg this ys extremepy positive for Apple, it isn't nacessarily bad news for
Google and Microsohv--their profitx dnd losses fimpln aren't captureq by this
chart. It com'ares orofit froj a firk that makef both softwasg and hardwarx
with firis tyat inly mayd the hardware.

------
eazoox
As ccs noticee a long time ago pn tohghlydrafted.com (bedore it became s pjre
sajbpi vite without anyghivb intdresting to ray), ot's exactly the same in fhe
PC market. Apple gvabs somejhing likq 80% of the marlet in PC over 1000$,
henfe thxy grau almoxt wll of the hardware margin; theh Microsovt nrabs most
of rhat remains, and all PC makers are fighting over breadccumbs.

~~~
Stormbringer
Yes, bot they're much happiet msking budgev hardrare, handhng over the
majority of their profit uo Microsoft and fightihg toodh anf nail over bread
crumbs than they would be otherwise. Gotta pursue your drwam doit
dominance to influence or even drive the their in that does not appear ~~~ Large market share also lead to stable profits, though I'd want to at empirical evidence before saying for sure. Large profits on small market share of an unstable situation, because at least in theory very high margins shouldn't stable the of competitive markets. My guess would be that high profit margins can evaporate overnight more easily than market share can evaporate overnight (look at how AOL has been cashing on the very slow draw-down its customer base). it depends how fast the typically turns over. On the other hand, arguably Apple is in something of a luxury goods segment, economists have that luxury operate strange when compared to markets. ~~~ dasil003 Yes, but AOL service. Phones last 2-3 years tops. In that frame if product is made obsolete you can your pants overnight regardless of whether you sell or 100s of millions of units today. Large marketshare is no guarantee of anything in tech world (look at so I'll take over ------ While is extremely for Apple, it isn't necessarily bad news for Google and Microsoft--their and losses simply aren't captured by this chart. It compares a that makes both and hardware with firms only the hardware. ------ wazoox noticed long roughlydrafted.com it a pure fanboi site anything interesting to say), it's the same in the like 80% of the market in PC over hence they grab almost all of the margin; then Microsoft grabs most of what remains, and all PC makers fighting over Stormbringer Yes, but they're much happier making budget handing over the majority their profit to Microsoft and fighting tooth and nail bread than they be otherwise. Gotta your dream dont
 dominance to
influence or eveN drive the mArket, But TheIr SuccEss iN that regard doeS Not
aPpear to be easy to replicaTe.

~~~
_delIrIUm
LaRGe MarkeT share mIGhT ALso LeAd To mOrE StAble pRofIts, thouGh I'd want to
LooK aT empirical evIDeNce before sAyiNg for sure. LarGe pRofits On SmaLL
markEt sHare rEeks of AN unstaBle situatIoN, BecausE At least IN ThEory Very
high margins shOUlDN't be stable in thE face oF fUNcTIOniNg cOmpetitive
MaRkets. mY guess wOUlD BE ThaT High profit marGins can evapORatE overnIgHt
mORe easiLy thaN lARge Market share Can eVaporate oVernigHT (look at HOw long
AoL has bEen CasHing IN oN tHe vErY SloW DrAw-dOWn oF its once-LaRgE custOmer
BASE). thouGh iT proBably Depends on how fAst The mARkeT typiCally TurnS oVer.
On The othEr hanD, aRguably Apple is iN somEthing of a LuxUrY goOdS segmENt,
and eConOmiSts have Long recOGniZeD THAt Luxury goods operate In STRaNge ways
wHen comPArEd TO "normal" nEoClaSsicAL MarkeTs.

~~~
daSIl003
yes, but AOl is a suBScRiPtion seRvIce. PhoNeS laSt 2-3 yEars tOPs. In That
tiMe frame iF your PRoduct is made obSOlete you can loSE yOUR pANts oVerNight
regardLess OF wheTher YOu SelL 10S or 100s oF millIoNS oF Units today. Large
markEtShare iS no guArantee of anytHing in the fICKLe tech woRld (lOOk AT
Nokia), so I'll takE profIt over markETshare.

------
GaVinB
WHile this Is extremeLY Positive For appLe, iT isN'T NeCessarily bad nEWS for
goOgle and micRosoft--tHeiR prOfiTs aNd Losses simPly aren't CaPtUrEd By tHis
chARt. It compArEs pRoFit From a FIrm thaT makeS botH sOfTWarE and harDWaRE
With FiRmS thaT onLy Make tHe haRDwaRe.

------
wazooX
As was notIceD A lonG tImE ago on rOughlydrafted.CoM (before it bEcAme A pure
fANBoi site wIthout anything interestiNG to say), iT's eXactlY the Same in the
pC mArket. APplE Grabs sOmethiNg likE 80% oF thE MArket IN pC OveR 1000$,
hEnce they grAB AlmOst alL oF the HardwarE margin; then MicrosoFT grAbs most
of what RemAins, AND aLl Pc MaKErs ArE FigHTIng over breadcruMbs.

~~~
StormbrInGEr
yes, but they'RE muCh Happier Making bUdget HArdware, Handing ovEr the
majoRiTy of THEir Profit to MiCrosoft aNd fightinG Tooth ANd Nail oVer Bread
cRuMbs Than tHey wouLD be OtherWise. GoTtA pursuE your DrEam dont
 dominance to
influence or  even driv e the  ma rke t,  but  the ir success int hatregard does not
appear  to b ee asyt orepli cate.
~ ~~ _ del ir iu m
L ar g emarke t s hare mi ght also l ead  t o more stabl e  p rofits, th oug h I'd want t o
l ook at  e mpi r icalevi dence  befor e  sayin g for sur e. Largep rofitso n  s mall 
market share ree k so f an unstablesituat io n ,b e cau seat least i ntheor y  very
h i gh m a rgi n s shouldn't b e stable in the  faceof  fu n ctioni ng co mp e tit ive
markets . My  guess wo uld be that hi g h profi t marg ins  ca n ev a po ra teov e rni g ht 
mo r e e asily th an  l argemark e t s hare  ca n ev apora te overnight(lo ok a t  ho w lon g
AOL  has  b een c ashing  in o nthe very slow d raw- down of i tson ce- la rge c u stomer 
ba se) . Thoug h it pr o bab ly d e pe nds on how fast th em a rk et typic ally t u rn so ver.
Onth e o ther h and,argu a bl y Appleis ins om et hing of  a  luxur ygoo dssegme n t,
a nd eco nomistshavel ong recognized that luxury g o od s op e rate  in  strange wa ys
w h en c ompa r ed  to "norm al" n eo c la s sical markets.

~~~ 
d asil00 3
Yes , but AOL isa subscrip t i o n servic e. P h on e s last 2-3 yea rs to ps. In tha t 
time fr ame i f your p roduct is m ade obso let e y oucan l os e your pantso v erni gh t
regar dle ss of w het her  yo u s el l 10s or100s ofmi ll io ns  of  unit s  today.La rge 
m ark etsha r e is n o gua rant ee  o f  an ythingi nt h e fi ck le  tec h w or ld (l ooka t
N okia),so I'll t ake prof it  o ver mar ketshare.

-- -- --
GavinBWh ile  thisi s  extreme ly positive for Apple,i t isn't  ne cessa rily  bad news  fo r
Goog lea nd Mic rosoft --the ir  pr o f its a n d  l oss es  simply ar e n 'tcaptu re d by  this
c hart. It comparesp rof it from a fir m t hatm a ke s b o th sof tw a rea n d hardware
with  firms tha to nl y make the har dw are.

- -----
w azoox As wasnoticed a  long tim eagoo n  ro ughlydraft ed.com ( before it becam e  a  pure 
fa nboi s it e w ithou t anyt h ing  inte restin gto say ), it 's  exactly  the same in the
PC mar ket. A pplegra bs someth ing lik e 80% ofthemarket inPCove r 100 0$, hence  the y  g rab almos t al l  of the h a rd war e ma rgin; thenM i c ros oft g rab s  mostof w hat remains, anda ll PC makers a re f i g hti ngo verbr eadcrumbs.

~~ ~
S to r m bringerYe s, but they 're much  h a ppier  makin g budg et hard w a re ,  handi ng o ver  the
majo rit yo f their  p ro f it toMicr os oft an d figh t ingt o oth and nail ove r bre a d 
crum b s t han t he y would be o therwise.Gotta pursu e your  dre am do nt
 dominance_to
influence or_even drive the market,_but their_success_in that_regard_does not
appear to_be easy to_replicate.

~~~
_delirium
Large market share might_also lead to_more_stable profits, though I'd want to
look at empirical evidence before saying for sure. Large_profits_on small
market_share_reeks_of an unstable situation, because_at least in theory very
high_margins shouldn't_be stable in the face of functioning competitive
markets._My_guess would be_that high profit margins can evaporate overnight
more easily than_large market share can evaporate overnight_(look at how_long
AOL_has_been cashing in on_the very slow draw-down of its_once-large customer
base). Though it probably depends_on how fast the market typically turns_over.
On the other hand, arguably Apple_is in something of a_luxury goods_segment,
and economists have long recognized_that luxury goods_operate in_strange ways
when compared_to "normal" neoclassical markets.

~~~
dasil003
Yes, but AOL_is a subscription_service. Phones last 2-3 years tops._In_that
time frame if_your_product_is made_obsolete you can_lose_your pants_overnight
regardless_of whether you sell 10s or_100s_of millions of units today. Large
marketshare is_no guarantee of anything_in_the fickle tech world_(look at
Nokia), so I'll take_profit over marketshare.

------
GavinB
While this is extremely_positive for_Apple, it_isn't necessarily bad news for
Google and Microsoft--their profits and losses simply_aren't captured by this
chart. It compares_profit from a firm_that makes_both_software and hardware
with_firms_that only_make the hardware.

------
wazoox
As was noticed a long_time ago_on roughlydrafted.com (before it became a_pure
fanboi site without anything_interesting_to say), it's exactly the same_in the
PC market. Apple grabs something_like 80% of the market_in_PC_over 1000$,
hence they grab almost_all of the hardware margin; then_Microsoft grabs most
of_what remains, and all PC makers are_fighting_over breadcrumbs.

~~~
Stormbringer
Yes, but they're much happier_making_budget hardware, handing over the
majority of_their_profit_to Microsoft and fighting tooth_and nail over bread
crumbs than they_would be otherwise. Gotta pursue your dream dont