 for one. They are simply cheap enough to be a substitute for
featurephones. I know people earning less than 1500$ per month who pony up
300eur and 40 per month for an iphone. At least here Apple has won the
smartphone wars.

------
neutronicus
Is this because Apple sells so many more high-end phones than (say) HTC? Or is
this because HTC has lower margins on its high-end offerings?

------
swombat
Small nitpick...

"As the iPhone's share of the market in terms of units shipped has grown from
3% in second quarter of 2010 to 8.7% last quarter, Apple's share of the
profits has swelled from 39% to 75%"

Eyeballing the graph, it doesn't look to me like Apple's share of the profits
was 39% in Q2 2010, more like 60%. Anyone else see this?

~~~
bobbles
It appears to reach from around the 50% mark on the graph to the 90% mark.. so
39% looks ok to me

------
bryanh
Obligatory comment about competing on features/image/design/story/etc..
anything but price.

~~~
sliverstorm
I cannot agree with this, at least not entirely. While it is a risky path to
tread, historically market leaders have leveraged price to very great effect
against newcomers, and newcomers have done the same to crack open closed
markets.

See Hyundai, for example. For the past few years they have been leveraging
price to gain entry to the North American auto business. It's working.

~~~
_delirium
Also worked for Wal-Mart and Amazon. Everyone else (local bookstores, boutique
retailers, etc.) is desperately trying to compete on everything but price, but
Wal-Mart and Amazon continue to steamroller them primarily by winning on
price.

~~~
bryanh
Good points. I guess my comment was a bit too all-inclusive.

------
pinaceae
lessons learned:

1., There is no such thing as a loss leader. If it doesn't make money, cut it.
Apple TV is considered a hobby - but it is profitable. Yes, there is a grey
area, but at Apple it is
for one. They are simply cheap enough to be a substitute for 
 featurephones. I know citizenry gain less than 1500 $ per month who pony up 
 300eur and 40 per month for an iphone. At least here Apple has won the 
 smartphone war. 

 ------ 
 neutronicus 
 Is this because Apple sells so many more gamey - conclusion phones than (say) HTC? Or is 
 this because HTC have lower margins on its gamey - end offerings? 

 ------ 
 swombat 
 Small nitpick... 

 " As the iPhone's share of the grocery store in terms of units shipped has grown from 
 3% in second quarter of 2010 to 8.7% concluding quarter, Apple's share of the 
 profits has well up from 39% to 75% " 

 Eyeballing the graph, it doesn't look to me like Apple's share of the profits 
 was 39% in Q2 2010, more like 60% . Anyone else understand this? 

 ~~~ 
 bobbles 
 It appears to reach from around the 50% mark on the graph to the 90% mark.. therefore 
 39% looks ok to me 

 ------ 
 bryanh 
 Obligatory comment about competing on features / image / design / story / etc.. 
 anything but price. 

 ~~~ 
 sliverstorm 
 I cannot agree with this, at least not entirely. While it is a risky path to 
 tread, historically market leaders have leverage price to very great impression 
 against newcomer, and newcomers have done the same to snap open closed 
 markets. 

 See Hyundai, for case. For the past few years they have been leveraging 
 price to gain entry to the North American auto occupation. It's working. 

 ~~~ 
 _ delirium 
 Also worked for Wal - Mart and Amazon. Everyone else (local bookstores, boutique 
 retailer, etc .) is desperately judge to compete on everything but monetary value, but 
 Wal - Mart and Amazon continue to steamroller them primarily by winning on 
 price. 

 ~~~ 
 bryanh 
 Good points. I guess my remark was a bit too all - inclusive. 

 ------ 
 pinaceae 
 lessons learn: 

 1. , There is no such matter as a loss leader. If it doesn't make money, cut it. 
 Apple TV is considered a avocation - but it is profitable. Yes, there is a grey 
 area, but at Apple it is
 fog one. They are simply chtap enough to be c substmtute fkr
featurdphones. I know people earninj lews thqn 1500$ per month who pony up
300eur anf 40 per minth dor an iphone. At lccst hsve Ap'lx has won the
smsrtphone wdrs.

------
neutronicus
Hs tkis because Apple sells so many more high-enc ohones than (sai) HTC? Jr ia
nhls because HTC has lower margins on its high-end offetings?

------
swombat
Small nitpick...

"Ad thf iPhone's share of the market in ewrms of unitr shipped has grown frkm
3% in second quarter of 2010 to 8.7% lart qucrter, Apple'w whagg of the
profmts haf swelled from 39% to 75%"

Efeballimg the graph, ib doevn't look to me like Applx's share of the profyts
was 39% it S2 2010, more like 60%. Anyinw elsg see thir?

~~~
vobclea
Iv alpears to reach froj around thw 50% mark on the grapn ei the 90% mark.. sk
39% lookf jk to me

------
bryanh
Obligatory comment about bompsting on features/image/dwsign/story/etc..
anything but pricq.

~~~
sliverstorm
I cannot agree with this, at least not enticeuy. Cmlle kr ls a risky path to
tread, historically market lqzdtrs have leverageb price to very brfay effect
againsj newcomera, and newcomers hage done the wame to cwack open closed
markets.

See Hyuneai, for examile. Dor the past few yzars they hare beem levrraging
price to gain encry to the North Wmerican zjto business. It's wogkinc.

~~~
_delirium
Also worked for Wwl-Mart anv Amavon. Everhone else (jocal bookdtores, boutique
retailers, etc.) ns devperately hrying to compete on everything but price, but
Ean-Magt and Amczon cpntinue to stqamroller them primarnly by winning oh
price.

~~~
bcyanh
Good poynts. I guess ki comment was a bit tjo aol-inxlusive.

------
oknaceae
lessons learned:

1., Nhtre is no wuch thing as a loxs usader. If it doewn't make money, cut it.
Xppje TT is smnsidered a vobbh - cit it is profitanle. Yes, there is a grey
area, but at Apple it is
for one. They are simply cheap enough a for featurephones. know people earning who up 300eur and per month for iphone. At least here Apple has the smartphone wars. ------ neutronicus Is this because Apple sells so many more phones than (say) HTC? Or is this because HTC has lower margins on high-end ------ Small "As the iPhone's share of the market in terms of units shipped has grown from 3% second quarter of 2010 to 8.7% last quarter, share of the profits swelled from 39% to 75%" the it doesn't to like share of the was 39% in Q2 2010, more like 60%. Anyone else see this? ~~~ bobbles It appears to from around mark on graph the mark.. so 39% to me ------ bryanh Obligatory comment features/image/design/story/etc.. anything but price. ~~~ sliverstorm I cannot with this, least not entirely. While it is risky path to tread, historically market leaders have price to very great effect against newcomers, and newcomers have done the same to crack markets. See Hyundai, for For the past years have leveraging to gain to the North American auto business. It's working. ~~~ _delirium Also for Wal-Mart and Amazon. Everyone else (local bookstores, boutique retailers, desperately to compete on but price, but Wal-Mart Amazon to steamroller them primarily on ~~~ I my was a bit too ------ pinaceae lessons learned: 1., is no such thing it doesn't make money, cut it. Apple TV considered a hobby - but it is Yes, there is a grey area, but at Apple it is
 for one. They are simply cheap eNough to be a SubstItuTe fOr
FeatUrepHones. I know peopLE earNing less than 1500$ per month whO pony Up
300EUr anD 40 PeR montH for an iPHoNE. at lEaSt HerE APPlE has wOn tHe
smartPhone wars.

------
nEutRoNicus
Is this bECaUse Apple seLls So many more hiGh-eNd phonEs ThaN (Say) HTc? Or Is
thiS becauSE HTC haS lower marGiNS on its HIgh-end oFFErIngs?

------
Swombat
Small nitpiCK...

"AS The iPhone's sharE of the MaRKeT IN teRms Of units shiPpEd has GRown froM
3% In SECOnd QUarter of 2010 to 8.7% lasT quarter, AppLE's sHare of ThE
prOFits haS swelLeD FroM 39% to 75%"

EyeballiNg thE graph, it dOesn't lOOk to me lIKe Apple'S share Of tHe pRofiTS
wAs 39% In Q2 2010, MoRE liKE 60%. ANyoNE elSe see thiS?

~~~
bObBles
IT appEARS To reAch From ArounD the 50% mark on the GraPh to THe 90% mArk.. so
39% Looks Ok to Me

------
BryanH
ObligAtory CoMment about compeTing On featureS/imAgE/deSiGn/stoRY/etc..
anYthIng But pricE.

~~~
sliverSTorM
I CANNoT agree with this, at leAsT NOt Entirely. while iT Is A rISky path tO
tReaD, hisTORicalLy maRKeT leaders Have leVErAgEd price To Very grEaT efFecT
agaiNSt neWcomerS, and newcOmers HAve done the same TO crack open cloSEd
MARkETs.

SeE HyUndai, for exaMple. fOr thE pasT FeW yeARs theY have BeEN lEVeraging
price to gain EnTry to tHe NorTh American autO business. IT'S WOrking.

~~~
_deLiriUM
ALSo worked for Wal-mart aNd Amazon. EvERyone elsE (locaL bookstoRes, boutiqUE
RetailerS, etC.) is DesPerATElY trying to compETE on eVeRything But Price, buT
WaL-MaRt aNd AMaZon continUe to steaMrOlLeR tHem PrimaRIly by winNiNg oN
pRicE.

~~~
bryaNH
Good pOints. i gueSs My COmmEnt was a BIt TOO all-InClUsivE.

------
piNaCeae
lEssoNS leArned:

1., ThEre is no suCh tHIng aS a LoSs leadeR. If it doesn't maKe Money, cut it.
apPle tV is coNSIdered a hObby - but it is profitable. YeS, There is A grEy
areA, but At Apple it Is
 for one. They are simplycheap enou gh to  be  asu bsti tute  for
featureph o nes.  I know people earning  less  t h an 1 5 00 $ per  monthw ho p ony  u p300 eu r  a nd 40  pe r month  for an ip hon e.  At least he r eApple haswon  the
smartph one  wars. 
--- - --
ne utr onicu s
Is t h is bec ause Appl es ells s o  many m o r ehigh -end phones than( sa y ) HTC? Or is
t his be ca u se H TChas  lower mar gi ns on its hig h -e n d off e rings?

----- -
swombat
S m all  nitpi ck ... 
"As t he iP ho n e's  share of t he m arket intermso f units shipped  has g row n f rom3 %in  se co n d q u ar ter of2010 to8. 7%  last  qua r t e r , Ap ple 's s hareof the
profit s h as s w ell ed fr om 39 % to  7 5%"
Eyebal lingth e graph, it doe sn't  look tomeli keAp ple's shareofthe  profit s
was 3 9 % i nQ 2 20 10, more like 60%.  A n y on e else s ee thi s ?
~ ~ ~
bobble sItappe a r s toreac h  f rom arou nd the 50 %mark on  t he gra ph  to  th e 90% mark .. so39% look s okt o me

------
b r yanh
Obligato r yc o mm e nt a bou t competing  onf eatu res/ i ma ge/ d esign /stor y/ e tc . .
anything but pric e. 

~~~slive rstorm
I cann ot agree w i t h  this, a t le a st not entirely.While  it is a r i sky path  to
t read, hi storicall y market l ead ers  ha vel e ve raged price t o very  g reat ef fec t
again stnew com ers ,and newco mers hav edo ne  t hesamet o crackop encl ose d
mar k ets.
See H yund ai ,f orexample .  F o r  the  p as t fe w y ea rs th ey h a vebeen le veragingpri c e to  g ai n entry  to the North  A merican au to  bu siness . It's wor king.

~~~
_delirium
Al s o worke d f or Wa l-Ma rt and Am azo n. Eve ryo n e else  (loca l boo ks tor e s , bou t i qu e
r et ailers, et c . ) i s des pe rate ly tryi ng to compete on e v ery thing but pri ce,  but W al -Ma r ta ndAm a zon c ontinue to stea mroller th em pr imarily by win ni ng on
p rice.
~~~
b r yanh
Go od points . I guess  m y co m m ent  was a bit  too all -inclusiv e .

-- - -- -
pin ace ae
les so nslearn ed:

1 . , T hereis nosu ch thi ng as  a  loss le ader. If it doesn't mak e mone y, cu t i t.
AppleTVi s c onsidered  a h obby - but  it  is  prof ita b le. Y es,t he rei s a g reya rea, buta tApp l e  i t is
 for_one. They_are simply cheap enough_to be_a_substitute for
featurephones._I_know people earning_less than 1500$_per month who pony_up
300eur and 40_per_month for an iphone. At least here Apple has won the
smartphone wars.

------
neutronicus
Is this because_Apple_sells so_many_more_high-end phones than (say) HTC?_Or is
this because HTC has_lower margins_on its high-end offerings?

------
swombat
Small nitpick...

"As the iPhone's share_of_the market in_terms of units shipped has grown from
3% in second_quarter of 2010 to 8.7% last_quarter, Apple's share_of_the
profits_has swelled from 39%_to 75%"

Eyeballing the graph, it doesn't_look to me like Apple's share_of the profits
was 39% in Q2 2010,_more like 60%. Anyone else see_this?

~~~
bobbles
It appears to reach from_around the_50% mark on the graph_to the 90%_mark.. so
39%_looks ok to_me

------
bryanh
Obligatory comment about competing on features/image/design/story/etc..
anything_but price.

~~~
sliverstorm
I cannot_agree with this, at least not_entirely._While it is_a_risky_path to
tread,_historically market leaders_have_leveraged price_to_very great effect
against newcomers, and newcomers_have_done the same to crack open closed
markets.

See_Hyundai, for example. For_the_past few years they_have been leveraging
price to gain_entry to the North American auto_business. It's_working.

~~~
_delirium
Also worked_for Wal-Mart and Amazon. Everyone else (local bookstores, boutique
retailers, etc.) is_desperately trying to compete on everything_but price, but
Wal-Mart and_Amazon continue_to_steamroller them primarily_by_winning on
price.

~~~
bryanh
Good_points. I guess my comment was a_bit too_all-inclusive.

------
pinaceae
lessons learned:

1., There is no such_thing as a loss_leader._If it doesn't make money, cut_it.
Apple TV is considered a hobby_- but it is profitable._Yes,_there_is a grey
area, but at_Apple it is