Originally Posted by mrochester
Why as consumers do we even care about how much money these businesses or making? I'd be inclined to think I'd been ripped off looking at the sheer size of profit Apple make from the iPhone. Regardless, all that matters to us as consumers is that these companies make desirable products at attractive price points. Figures show that both Apple and Nokia are more than capable of doing this. Leave worrying about how much profit is made to the people who actually care about that sort of thing; it is completely irrelivant here.
Is this forum for consumers only? I thought it was people who are interested in any aspect of Apple.
Every company wants to create products/services that some number of consumers value so highly that they are willing to pay much more money for it than it actually costs the company to make/provide it. That difference is known as margin, a portion of which becomes profit.
When the value of something is inflated (due to whatever reason) beyond the real benefit to the consumer, then the consumer is ripped off. But different consumers see different benefits. So what is rip off to one consumer is not to another.
Consumers balance several "value" factors. One consumer may primarily value being the first to own something, or value the "cool" factor. Others may value "beauty", while others may value productivity, and others, low price. Not everyone is looking for the cheapest price over all other factors. Not everyone wants to shop at the dollar store, or pawn shop.
As for Nokia and its lower profits, from what I can gather from their conference call transcripts and filings, their products aren't attractive in the lucrative US market because they won't give in to the US carriers in order to be subsidized; so distribution is very limited.
Outside of the US, SMS and now MMS is booming (even among the lower-income groups), and the Internet and Apps aren't as highly valued (yet). So Nokia's E-series and other medium-priced smartphones, which have good keyboards and high quality cameras, are highly valued. (RIM is benefiting from this too but to a lesser extent because they don't have as good a distribution network as Nokia outside of North America.) And Nokia just made them more attractive with its free Maps.
Without the Internet as a driver, large touch-screens and multi-touch are less highly valued (for now), so less people are willing to pay the higher prices for them. The manufacturers like Apple and Nokia N-series are willing to not sell these touch screen models rather than sell at a lower precedent-setting price because they believe over time, as the Internet and other services/Apps become more valuable, people will eventually pay more. (Thus Nokia also feels it has time to get its OS and touch and Apps to work great at the high-end.)