[adorno]

"Sure, I lose a little on each unit. But I make it up in VOLUME!"

That's a good joke, and pretty much a losing proposition for most companies.

But, the tech industry is quite a different animal, and oftentimes, market share is very important.

An established market share that is much higher than the competition, no matter how profitable that competition is, can be a better long-term strategy. Android has a much larger installed user base, and, devices aren't being very profitable for Google and the makers. But, market share is very important for the after-market sales of products and services and software that can be used by that large installed base. Apple is very successful now, but, mostly as a result of the premium prices that people have to pay to own Apple's iPhone. The after market services for Apple are also profitable, but, that after-market revenue could disappear very quickly if iPhones were to take a tumble and lose the loyal following which keeps Apple in the stratosphere. Apple is playing with fire by continuing to count on its loyal base to keep upgrading to the newest minimally improved iPhone. While it's currently doing great, market share could take them to even higher places. But, huge market share is not possible for devices which are more costly than the competition. There are only so many people who want to pay premium prices for any device, not just Apple's.

Microsoft doesn't make any money from the sales of Windows machines, other than their own, and the money they do get from Windows licenses, is not enough to justify continuing to keep Windows alive. So, the strategy for Microsoft is to make their money with the after-market sales of software and services. That strategy is about market share. Apple's strategy is about making most of their money up-front from higher prices on their devices.

For now, Apple's strategy to make as much as they can while they can from higher prices, is seen as a great business strategy. It's working now, but, it won't last forever, and Apple will, undoubtedly, come down to Earth when people begin realizing that, there really is no need to pay premium prices for products which, other than looking good and perhaps of high quality, aren't really that much better than comparable devices selling for a lot less.

It's not a matter of "if", but of "when" Apple has to start selling their devices at lower prices, then, market share will start to matter a lot.

[Swordmaker]

An established market share that is much higher than the competition, no matter how profitable that competition is, can be a better long-term strategy. Android has a much larger installed user base, and, devices aren't being very profitable for Google and the makers. But, market share is very important for the after-market sales of products and services and software that can be used by that large installed base. Apple is very successful now, but, mostly as a result of the premium prices that people have to pay to own Apple's iPhone. The after market services for Apple are also profitable, but, that after-market revenue could disappear very quickly if iPhones were to take a tumble and lose the loyal following which keeps Apple in the stratosphere. Apple is playing with fire by continuing to count on its loyal base to keep upgrading to the newest minimally improved iPhone. While it's currently doing great, market share could take them to even higher places. But, huge market share is not possible for devices which are more costly than the competition. There are only so many people who want to pay premium prices for any device, not just Apple's.

Your analysis is totally wrong when it comes to Apple. . . because the after market products for Android simply is NOT there. There is a thriving after market for iPhones and iPads, but show me the after market for Android phones and tablets. You won't find it. There is too much fragmentation in that market for anyone to make money servicing any particular model of Android phone for aftermarket accessories.

On the other hand, the standardizations in iOS devices has allowed the aftermarket to easily focus on iPhones and iPads for after market accessories. Just walking in the Mall the other day there were kiosks for iPhone and iPad 3rd party accessories . . . cases, screen protectors, etc., that covered 90% of the two or three kiosks specializing in mobile accessories. . . and only 10% of the space reserved for Android accessories and then only for the top selling models from Samsung and perhaps LG. It just is NOT happening. Again, Look around at a Consumer Electronics store and count the number of products that have docking connectors built in for iPhone and iPads. Then see if you can even FIND one for Android phones. Crickets. . . they don't have them because there are so many different locations on the devices where the connectors can be located, the manufacturers cannot build a universal docking station!

Software? Too many models of Android for the developers to try and optimize their apps for. . . too many screen sizes, too many resolutions in those screen sizes.

Android Fragmentation in the Wild at the beginning of 2014 — Over 2000 different models
and it's worse at the end of the year.

At the end of the last quarter, only THREE out of over 300 manufacturers of Android phones posted any profits at all. . . and the number three, Xiaomi, posted a profit of only $7 million dollars. Now we learn that number three could only do that because they paid NO ROYALTIES OR LICENSES for any of the technology in their phones to anyone, Nokia, Sony, Apple, Microsoft, Samsung, Qualcomm, and any of the other 225 other patent holders that everyone else is paying IP licensing for the underlying technology to make their phones!!! They've earned a cease and desist order and had their products banned from sale in India for infringement until the case reaches trial. Oops.

So, adorno, are those over 225 manufacturers of Android phones going to make up their sales loses by their immense volume as they ship money out the door with every Android phone they sell?

Microsoft doesn't make any money from the sales of Windows machines, other than their own, and the money they do get from Windows licenses, is not enough to justify continuing to keep Windows alive. So, the strategy for Microsoft is to make their money with the after-market sales of software and services. That strategy is about market share. Apple's strategy is about making most of their money up-front from higher prices on their devices.

That is one of the funniest things you've said in a long time. Microsoft doesn't make any money from the sales of Windows machines. Have you checked the price of an OEM (Original Equipment Manufacturer) license for a SINGLE installation of Windows Professional lately? Fry's had them on sale for retail this weekend. $104.00. Of course, a manufacturer such as Dell can purchase them at a discount, say for $52 per unit, but to say that Microsoft makes NO MONEY from the sale of each Windows computer shows just how naive you are!

Microsoft also makes money on continued licensing for businesses of that OS and any MS software the business uses. . . usually a PER SEAT license that is renewable yearly. You keep demonstrating you don't have a clue about the economics of how these companies make their money. Yet you pontificate on what Apple should be doing. SHEESH!

You continually spout about something you have never used. . . stating it's about "people paying high prices for looking good," when you don't understand a thing about what gives Apple its imprimatur. You think it's about user VANITY. You don't have a clue. You state that Apple survives by customers rebutting. . . but there are now OVER ONE BILLION iOS devices in use in the world. . . and they cannot have ALL been bought or be being used by a core of Apple users, just upgrading. . . over and over again. No, they are being bought by EX-Android phone users, EX-Windows PC users, and new buyers. . . people who CHOOSE to buy, not because they want to "look good."