Originally Posted by macarena
Considering how small Computers have become, as a percentage of Apple's Revenue and Profits, it is indeed strange that Apple still insists on high margins in this space. In Apple's own reckoning, the PC market is a dying market, and the future is in tablets. Then why don't they lower their margins and make a play for increased marketshare?
Today, the barrier to developing iPhone and iPad software is significantly higher than the barrier to develop Android Software. You absolutely need a Mac to build iOS software. And with Apple's prices, this is a stiff entry barrier indeed.
Even if Apple lowers margins on Macs to 10%, it will not hurt their bottom line in a significant way. And in all likelihood, the resulting increase in sales will more than make up for the lower margins.
In a mature market which is becoming commoditized, there are two options:
1. As you recommend, cut prices to try to increase market share. That cuts into your profits - and competitors generally do the same thing, leading to a downward spiral.
2. Focus on niches where you can obtain a nice margin. That is what Apple does.
The latter is almost always a better option.
Originally Posted by jj.yuan
. Are there private companies who make more profit than Apple?
The very fact that they're private means that you'll never know for sure. However, Saudi Aramco is widely recognized as perhaps the largest private company. However, reports I've seen of their revenues are that they're roughly half of Exxon's size. If their operations are similar to Exxon (which is a HUGE assumption), they would not earn more than Exxon or Apple. Of course, if their margins are much higher, it's possible that they could make more profit than Apple.
Originally Posted by MJ1970
It would be interesting to put this is in better historical context by adjusting these numbers for inflation.
Absolutely. However, some of the other figures weren't all that long ago so it might not change things.
Originally Posted by ankleskater
Don't you mean that Newton was the first true tablet from Apple? Weren't there others predating Newton that were equally (dys)functional?
The Newton was far ahead of its time and was a great device for its time, particularly by the time the second iteration came out. The only real problem with Newton was unrealistic expectations.
Originally Posted by eldernorm
PC's are a dying market???? Where on earth did this come from. Trucks vs cars, yes... Dying??? no.
'Dying' is far too strong a word. 'Mature' is far more accurate. Maybe even 'commoditized'. The market's growth has essentially stopped even with Apple included. Without Apple, sales are declining. And there is less and less difference between the brands and less differentiation - which ultimately leads to reduced margins.