Originally Posted by shadash
Once a company devises a great product, he says, it has a monopoly in that realm, and concentrates less on innovation than protecting its turf. The Mac user interface was a 10-year monopoly, says Jobs. Who ended up running the company? Sales guys. At the critical juncture in the late 80s, when they should have gone for market share, they went for profits. They made obscene profits for several years. And their products became mediocre. And then their monopoly ended with Windows 95. They behaved like a monopoly, and it came back to bite them, which always happens.
Youre using that out of context. The main focus of all publicly traded companies are profits. Jobs statements are a way to ensure and continue to get profits by expanding, not by acting like a monopoly. There has to be a tipping first, hence his use of the word conjecture.
Do you really think that making a cheap phone that can be completely subsidized by the carrier or costs under $99 without a contract is what Jobs was talking about? If so, then why arent tehy doign that? Do you really think Dell going for marketshare with profit-less $400 PCs is what Jobs was talking about? If so, then why arent they doing this?
The reason is the tipping point for tier takes time. Think of it as a pyramid with expensive, low volume items on top and inexpensive, high volume items on the bottom. Also think of each price segment as a different market. Lets say its separated by $100 with the Macs. As weve seen with the Macs their notebook market reached its tipping point a year or two ago and they all dropped in price. They average selling price is now lower than it was but they are also making more profits from it. This is NOT a guaranteed causal relationship and raising the price isnt as easy as dropping it.
With the iPhone, there are a couple things that can happen. Apple can make a cheaper iPhone, but the carriers might still subsidize it the same way pocket the difference, or Apple can make additional iPhone models. Note that they did this with the iPod only after the tipping point had been reached.
Apple does look to be nearing that tipping point, but its hard to tell as the iPhone is still sold out for weeks and still not released on all viable countries yet. Again, if the magical answer is marketshare then they wouldnt have released to a single carrier in the US, they would have released a CDMA version along with a GSM version, they would have released many models at once to cover all types of buyers, and all the handset vendors that are now focusing on a select high-end models would never have had to follow Apples lead.