Originally Posted by Realistic You have set the terms of the wager entirely in your favor, 1 free OS with several phone models and manufacturers versus 1 manufacturer's OS and models, and yet you still could possibly lose.
Come on! If you ever initiate a wager, be sure to define the terms to increase your odds. Unless, you aim to lose because you gain more when that happens. You may not have encountered the latter, but there are situations when it serve my purpose.
A decent wager though will consider the art of negotiation. I tried to do that with TechStud, to define the terms of what constituted a failed iPad, but he did not have the balls to stand behind all his blusters. He claimed that a onemillion iPad is not fair (my low ball estimate) for year 2010; but then considered the Kindle a success -- even if Amazon never released sales figures. I assume the latter was the case because the actual quarterly or annual sales of Kindle, might not have been really that spectacular.
Obviously, I low balled the estimate for the iPad wager to increase my chances. I simply considered the applications where the iPad may be applicable for the activites, vocation and businesses that interest me, and I could see the promise of the iPads beyond the usual that many techie-naysayers or even Apple have even begun to explore, or share, at the time. When I searched You Tube, a number of people have even found very creative productive uses for a device that some supposedly computer tech experts(?) considered simply a consuming device.
As it turned out, my early estimates around February was very conservative. Apple iPad sales was around a million in the first month alone, even if sales was delayed, and more so, worldwide. Based from the initial sales, I increased my prediction around 2-3 million iPads for the quarter. It could have been higher I think had there been no production constraints. For the year, my estimate would be around 8-10 million, provided the issue of production ramping has been addressed, and Apple has introduced ithe iPad to the major markets before the holidays.
I expect however that the actual introduction of the iPad to other markets where the iPhone has already been introduced may drag into early next year, especially if other companies do not have a credible counter to the iPad by the holiday season.
It would be crazy however to assume that the IPad was a sure winner. Even Apple was surprised by the reception of the iPad.
Originally Posted by Realistic
BTW You obviously still don't get it, this is all about profitability not market share.
Actually, in the beginning, that is one thing where solipsism and I agreed. Profitability is the focus of Apple. Read the response of others about what I termed the "20-80" strategy. Others called it "80-20". I quote a response from:
Originally Posted by christopher126
Very well said cg...I've heard it described in other ways, too. Profit Margin over Market Share. And I've certainly heard of the '80-20' rule, i.e., 20% of the population drink 80% of the beer! (Question: Who does Budweiser advertise too? Answer: Horses, specifically, Clydesdales!)
And I know although, ~70% of the US economy is driven by the 'consumer,' the top 10% of the US consumers drive 50% of the US economy. But I never thought to think of it as a "20-80" strategy" on the part of Apple. Spot on!
I am not sure what the correct term is used by Harvard Business School. I read an article somewhere that it is the centra; mantra of the business plans.
There is also a potential danger of the high end model. This was proven in the latest worldwide downturn. For example, high end restaurants which obviously cater to the more elite of the population can be very vulnerable. Eating out is not a necessity, and could be one of those that people, even the very rich can do without, if finances become tight. There were a number of "institutions" -- four star restaurants, hotels, and such, in urban areas during the latest downturn. I remember the "Tavern at the Green" n Central Park because my German friend introduced me to it when I visited him in New York. This was true also with the sales of high end consumer products retailers.
In contrast, the resilience, almost recession-proof ability of Apple not only to weather the latest dowturn, but actually even reported record sales and profits was remarkable.
However, what is true for Apple, or the high end business markets need not all apply to all industries.
For example, the reverse strategy is used by companies, like Walmart. The stiff competition among retailers, especially involving day-to-day needs rely on very low profit margin but high product flow (turnover) to generate enough profit. Many chain supermarkets use the same strategy. The same is true with discounters. Some even sell their products at a loss because of buyers tendencies, especially families that bring their kids when they shop. Have you seen all those items near the cashiers section? Kids and others do impulse buying.
Walmart had been the most successful using this strategy because of it clout -- it is the largest retailer in the world. In fact, if there is to be anyone investigated for unfair monopolistic practices, Walmart would be a good candidate. It could simply get preferential prices, simply because of the volume purchases. It could therefore undercut any nearby competirors and still make better profit.
Walmart however goes further, it will force manufacturers to abide by its terms. Otherwise, it will not display the product. One other practice that Walmart supposedly had done was to support new products, but if it becomes very successful with consumers, it then create equivanlent house product.
To view Walmart as all villain is not always a complete picture. For example, Walmart has been a proponent of fighting global warming, conservation and energy conservation. For this reason, it has collaborated with manufacturers to develop concentrated detergent for example. Why? This reduces packaging and disposed plastics that wreak havoc in both land and specially marine life. With concentrates, more products can be transported. Saves both on traspontation costs (labor, repairs, replacements) and energy.
In the case of businesses, like Walmart, greater marketshare is not only desirable but imperative for survival.