The entire point of my original posting is to say that Steve Jobs called the Netbook market nascent.
That in itself says that Apple missed the boat and will be following the rest of the market to put out a Netbook. Nascent by meaning is to say it's in its infancy or beginning to develop.
That is supposed to be Apple's claim to fame and interpet what is the next up and coming market. Steve Jobs comments make him sound as bad as Steve Ballmer when he discounted the iPhone as a toy. He is passed his time and needs to move on.
By the way Apple is currently trading at 79.30 after hours. Steve's not hurting anyone but the shareholders and they won't put up with it for very long. Especially with his lack of vision of late.
he's never been particularly visionary, all 'his' good ideas actually started with someone else.
Apple could buy netbooks OEM'd from Acer, writer drivers for the Acer hardware that's not out-of-the-box compatible with OS X, slap an Apple sticker over the Acer logo, and sell them for a 20% markup. Starving students and road warriors would buy them in hordes.
BTW, that's essentially what tons of people are doing with their netbook Hackintoshes (install a hacked-up OS X, slap an Apple sticker over the PC maker's logo). I think the exploding popularity of the netbook-based Hackintosh marketplace (MSI Wind, Dell Mini 9, Asus Eee PC, etc) is evidence that there is a substantial market for these things.
apple would never sell a product with that low a profit margin.
What this analysis fails to point out is that Apple probably increased their share of revenue as rival PC vendors sold more of their cheap $300 netbooks. From a business perspective, Apple is much better off...
Just to make it clear, I didn't say the iPhone compares with a netbook, and I do not presume to suggest that.
I'll say it, they are a fad. They are a cool little geek toy that is getting bought up quickly by just about everyone who is gonna buy one, & then they will taper off.
Look, especially in a DOWN economy, people don't want to waste their money on lots of different toys, they ultimately want to simplify their device life & that is why I think Apple is on the right path.
The idea of something as small & underpowered as a netbook becoming one's primary computer is just stupid & silly. These people will play around with it for a while, then after a few thousand cricks in their neck, the loss of their sight, & the extreme boredom of carrying around a journal sized laptop just to check e-mail & surf the web, they'll loose interest & turn back to an all in one phone type device coupled with a true computer that is still fairly portable but has some real power to do more than just e-mail & web.
This happened to my father, he thought the power of an actual mini laptop would be something he'd love, hook it up to an external monitor & keyboard/mouse when he needed to really work. In the long run though he found the thing to be annoyingly small & just not the experience he was hoping for. He's now on the new Unibody MacBook & wishes he never wasted money on stupid gadgets to begin with.
People who think the netbook is a lasting idea are going to be very disappointed when it goes the way of the spice girls. Apple is very careful about markets it enters because they don't want to make the Newton mistake ever again.
he's never been particularly visionary, all 'his' good ideas actually started with someone else.
Just gonna throw out backless claims or you gonna put some backbone into it. Please explain (preferably in list format) which of his ideas you are referring to & where they originally came from.
I'd like to know whether this figure is just for Apple's hardware (in which case it is time to cut prices a bit) or includes software (which has high development costs but very little in actual manufacturing costs)
There's not mid-tower Mac because the margins on AIOs are far higher and a mid-tower mac would destroy iMac sales.
As you probably noticed I mentioned that towers encourage the purchase of displays that last too long and often don't have an Apple logo on them. That's certainly a hit to Apple any way you slice it. I also said that towers often last longer than all-in-ones because they're easier to upgrade. That's another financial hit for Apple.
At the same time the iMac is highly profitable because it's the only game in town if you want a decent desktop Mac under $2500. Apple used to sell towers at $1499 that should have had even higher profit margins than the iMacs that sat in the same price range. There's no reason why towers priced similarly to iMacs wouldn't generate good sales figures and high margins for Apple today. Replacing some of the expensive items the iMac uses with more standard desktop parts would only reduce production costs. Apple has always gotten away with charging a premium for the kind of expansion that PC buyers take for granted and could do it again if they really wanted to. I remain convinced that the main reasons why there's no consumer tower have nothing at all to do with money.
Quote:
Apple is a profitable company and wishes to remain that way.
I agree wholeheartedly. I was one of the fools who didn't sell his tiny number of AAPL shares in January 2008 when they were worth $200 each so I want them to continue to be successful.
Quote:
If you believe that Apple hasn't gained significant customers you're kidding yourself.
I believe they've gained a substantial number of new customers. In fact, I believe a huge number of early 21st century Macs are still in use while most PCs from that era have long since been abandoned.
Taking those two items together it appears obvious that Apple is sitting on the edge of an enormous growth in sales. All those long lasting old Macs are going to be replaced in the next couple of years along with the first batch of overheating, underperforming, 32-bit Intel Macs (overall economy willing). Then, as time moves forward, Apple will join the rest of the industry in seeing rapid replacement of computers leading to even higher sales again. That is, of course, if Apple makes machines people want and can afford to buy.
Packard Bell isn't sold in the United States. But that is the question, is Acer really selling more machines or is the growth because they got to count the Gateway and eMachines sales?
Interesting. Acer gains market share, everyone discounts it. Apple gains market share, everyone praises it. Now, you are stating Acer cheated? (is that possible?). Curious, so what if they get to count Gatewayand eMachines?.So what if their growth is through acquisitions?. Is one growth more legitimate than another?.I bet when Acer checks their bank account, the money seems real. Now people are arguing Apple gains in revenue share?.. that is funny as if anyone on this message board can prove that, While revenue share is an interesting geek topic, market share has real relevance.. less computers means less iwork sales, means less apple software sales, means less people to upgrade their machines. Maybe you think apple has a winning formula.. perhaps they should take it up a notch and sell their computers for even more so they can lose more market share and maintain revenue share. Btw, that is stupid measurement.. is that a made up term?.. revenue share?. What happens when some other company overtakes apple in this made up geek term?.. what?.. then you'll gonna say apple lost marketshare and revenue share but gained in coolness share (hey, if you get to make up a term, so do i)
Interesting. Acer gains market share, everyone discounts it. Apple gains market share, everyone praises it. Now, you are stating Acer cheated? (is that possible?). Curious, so what if they get to count Gatewayand eMachines?.So what if their growth is through acquisitions?. Is one growth more legitimate than another?.I bet when Acer checks their bank account, the money seems real. Now people are arguing Apple gains in revenue share?.. that is funny as if anyone on this message board can prove that, While revenue share is an interesting geek topic, market share has real relevance.. less computers means less iwork sales, means less apple software sales, means less people to upgrade their machines. Maybe you think apple has a winning formula.. perhaps they should take it up a notch and sell their computers for even more so they can lose more market share and maintain revenue share. Btw, that is stupid measurement.. is that a made up term?.. revenue share?. What happens when some other company overtakes apple in this made up geek term?.. what?.. then you'll gonna say apple lost marketshare and revenue share but gained in coolness share (hey, if you get to make up a term, so do i)
Revenue share is actually very easy to understand.
Imagine a pie that represents all the money that was spent on computers last year. Apple got to cut the pie first. They took a small yet significant piece. The rest of the pie was cut into 99 pieces and served to all the PC makers.
This year Apple takes their same small piece of the pie again only this time the remaining pie is cut into 109 pieces.
So the market grew 10% in unit sales. There were 110 pieces of pie this year as opposed to only 100 last year.
But the pie wasn't any bigger; it was just cut into more pieces and Apple got the same size piece (revenue share) that they did last year.
"Gross margin was 34.7 percent, up from 33.6 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter?s revenue."
That gross margin is calculated based on ALL sales realized in fiscal 2008. It was based on 32.5 billion dollars in net sales from every product sold in every country. This includes Mac, iPod, iPhone, software, extended warranties, Music related, etc.. It doesn't mean that every product has a 35% margin. iPods and iPhones are probalblly closer to 50%. Extended Warranties are probably in the 80% range. Macs are more likely in the 20 to 25% range. It also includes any favorable foreign exchange rate. The gross margin is the total sales of all products ($32.5 billion in fiscal 2008) minus the total cost of doing business ($21.3 billion in fiscal 2008). It does not mean that every product Apple sells have a 30 to 35% "Apple Tax". If Macs has a 30 to 35% margin, Apples gross margin would easily in the the 40 - 45% range.
Apple margins on Macs are in line with that of Dell PC's. Dell also makes over 20% margin on their expensive PC's. What bring down their overall margin on PC's is that they sell a lot of $399 desktops and $699 laptops. These cheaper units only have about a 10% margin. Thus Dells average margin is in the mid teens (about 15% and declining the last I remember) for all PC sales.
Apple don't break down their margins based on products. But when you think of all the products Apple sells, Macs probably has the lowest margin of any of their core products. And it's most likely below 30% in most cases. But you have to remember that a 25% margin on a $2000 Mac is $500. While a 50% margin on a $150 iPod is $75. And an 80% margin on a $350 extended warranty is $280.
Revenue share is actually very easy to understand.
Imagine a pie that represents all the money that was spent on computers last year. Apple got to cut the pie first. They took a small yet significant piece. The rest of the pie was cut into 99 pieces and served to all the PC makers.
This year Apple takes their same small piece of the pie again only this time the remaining pie is cut into 109 pieces.
So the market grew 10% in unit sales. There were 110 pieces of pie this year as opposed to only 100 last year.
But the pie wasn't any bigger; it was just cut into more pieces and Apple got the same size piece (revenue share) that they did last year.
I am aware what it is.. i was mocking it. Revenue share is the code for "I'm losing market share so to feel good, i put out this other metric that no one on wall street cares about". There is a reason all companies obsess about market share. I bet supercomputers have a huge margin (after all, really, how much can a 100 million computer hardware cost.. most of the cost is for intellectual property)... so, a company who sells two supercomputers but has only like 0.0003% market share would quote revenue share to feel good.. no one cares about revenue share.. when you have to quote that number, you are losing
Just gonna throw out backless claims or you gonna put some backbone into it. Please explain (preferably in list format) which of his ideas you are referring to & where they originally came from.
The original logic board and ipod are two that spring readily to mind.
SJ's great strength is convincing people that they 'need' his product.
He is an excellent marketeer, nothing more nothing less.
I am aware what it is.. i was mocking it. Revenue share is the code for "I'm losing market share so to feel good, i put out this other metric that no one on wall street cares about". There is a reason all companies obsess about market share. I bet supercomputers have a huge margin (after all, really, how much can a 100 million computer hardware cost.. most of the cost is for intellectual property)... so, a company who sells two supercomputers but has only like 0.0003% market share would quote revenue share to feel good.. no one cares about revenue share.. when you have to quote that number, you are losing
Are you really going to sit there and say market share is a more important measurement of success than profit? Apple could make huge advances in market share by selling a $500 netbook, but they'd probably lose money doing it. Sounds like a great business strategy to me
Are you really going to sit there and say market share is a more important measurement of success than profit? Apple could make huge advances in market share by selling a $500 netbook, but they'd probably lose money doing it. Sounds like a great business strategy to me
Oh it's a strategy. BMW uses that strategy too but i doubt they will generate as much revenue as Toyota or as much profit. The more of something you can sell, the cheaper you can sell it while maintaining your profit. Allow me to explain to the slow among you..
If person A sells 10 items at $50 profit/item, then person A makes $500 profit.
If person B can sell 100 item at $20 profit/item, then person B makes
$2000 profit.
That is why everyone except Apple fans look at market share.. do you realize in terms of units the difference a 1% market share has?.. 1% probably represents over 1 million units. At that scale, you can definetly still make more profit while selling each item at a lower price. I realize this is a difficult concept for apple fans to grasp, hence why i included basic economics for dummies above.
Oh it's a strategy. BMW uses that strategy too but i doubt they will generate as much revenue as Toyota or as much profit. The more of something you can sell, the cheaper you can sell it while maintaining your profit. Allow me to explain to the slow among you..
If person A sells 10 items at $50 profit/item, then person A makes $500 profit.
If person B can sell 100 item at $20 profit/item, then person B makes
$2000 profit.
That is why everyone except Apple fans look at market share.. do you realize in terms of units the difference a 1% market share has?.. 1% probably represents over 1 million units. At that scale, you can definetly still make more profit while selling each item at a lower price. I realize this is a difficult concept for apple fans to grasp, hence why i included basic economics for dummies above.
The problem with your comments is that revenue share shows how much of that market's money you're getting. If you have a revenue share of 10% and a market share of 1%, that's 10x better money (at least cash flow) than a market share of 10% and a 1% revenue share.
As it is, for 2008, it looks like Apple had half the revenue of Dell, despite having a lot less than a quarter of Dell's market share. We'll probably see similar levels of net profit between the two as well.
Comments
The entire point of my original posting is to say that Steve Jobs called the Netbook market nascent.
That in itself says that Apple missed the boat and will be following the rest of the market to put out a Netbook. Nascent by meaning is to say it's in its infancy or beginning to develop.
That is supposed to be Apple's claim to fame and interpet what is the next up and coming market. Steve Jobs comments make him sound as bad as Steve Ballmer when he discounted the iPhone as a toy. He is passed his time and needs to move on.
By the way Apple is currently trading at 79.30 after hours. Steve's not hurting anyone but the shareholders and they won't put up with it for very long. Especially with his lack of vision of late.
he's never been particularly visionary, all 'his' good ideas actually started with someone else.
Apple could buy netbooks OEM'd from Acer, writer drivers for the Acer hardware that's not out-of-the-box compatible with OS X, slap an Apple sticker over the Acer logo, and sell them for a 20% markup. Starving students and road warriors would buy them in hordes.
BTW, that's essentially what tons of people are doing with their netbook Hackintoshes (install a hacked-up OS X, slap an Apple sticker over the PC maker's logo). I think the exploding popularity of the netbook-based Hackintosh marketplace (MSI Wind, Dell Mini 9, Asus Eee PC, etc) is evidence that there is a substantial market for these things.
apple would never sell a product with that low a profit margin.
Because Steve said it isn't the right time. The market is still in it's infancy. Plus they can't figure out how to make a Netbook for less than $1000.
Not quite, they could do it but maybe not with the 30-35% juicy Apple tax on it.
Just to make it clear, I didn't say the iPhone compares with a netbook, and I do not presume to suggest that.
I'll say it, they are a fad. They are a cool little geek toy that is getting bought up quickly by just about everyone who is gonna buy one, & then they will taper off.
Look, especially in a DOWN economy, people don't want to waste their money on lots of different toys, they ultimately want to simplify their device life & that is why I think Apple is on the right path.
The idea of something as small & underpowered as a netbook becoming one's primary computer is just stupid & silly. These people will play around with it for a while, then after a few thousand cricks in their neck, the loss of their sight, & the extreme boredom of carrying around a journal sized laptop just to check e-mail & surf the web, they'll loose interest & turn back to an all in one phone type device coupled with a true computer that is still fairly portable but has some real power to do more than just e-mail & web.
This happened to my father, he thought the power of an actual mini laptop would be something he'd love, hook it up to an external monitor & keyboard/mouse when he needed to really work. In the long run though he found the thing to be annoyingly small & just not the experience he was hoping for. He's now on the new Unibody MacBook & wishes he never wasted money on stupid gadgets to begin with.
People who think the netbook is a lasting idea are going to be very disappointed when it goes the way of the spice girls. Apple is very careful about markets it enters because they don't want to make the Newton mistake ever again.
For a great article on fads check this link.
http://ewalden.ba.ttu.edu/pages/docu...wne(2005)b.pdf
he's never been particularly visionary, all 'his' good ideas actually started with someone else.
Just gonna throw out backless claims or you gonna put some backbone into it. Please explain (preferably in list format) which of his ideas you are referring to & where they originally came from.
he's never been particularly visionary, all 'his' good ideas actually started with someone else.
Not quite, they could do it but maybe not with the 30-35% juicy Apple tax on it.
There's not mid-tower Mac because the margins on AIOs are far higher and a mid-tower mac would destroy iMac sales.
As you probably noticed I mentioned that towers encourage the purchase of displays that last too long and often don't have an Apple logo on them. That's certainly a hit to Apple any way you slice it. I also said that towers often last longer than all-in-ones because they're easier to upgrade. That's another financial hit for Apple.
At the same time the iMac is highly profitable because it's the only game in town if you want a decent desktop Mac under $2500. Apple used to sell towers at $1499 that should have had even higher profit margins than the iMacs that sat in the same price range. There's no reason why towers priced similarly to iMacs wouldn't generate good sales figures and high margins for Apple today. Replacing some of the expensive items the iMac uses with more standard desktop parts would only reduce production costs. Apple has always gotten away with charging a premium for the kind of expansion that PC buyers take for granted and could do it again if they really wanted to. I remain convinced that the main reasons why there's no consumer tower have nothing at all to do with money.
Apple is a profitable company and wishes to remain that way.
I agree wholeheartedly. I was one of the fools who didn't sell his tiny number of AAPL shares in January 2008 when they were worth $200 each so I want them to continue to be successful.
If you believe that Apple hasn't gained significant customers you're kidding yourself.
I believe they've gained a substantial number of new customers. In fact, I believe a huge number of early 21st century Macs are still in use while most PCs from that era have long since been abandoned.
Taking those two items together it appears obvious that Apple is sitting on the edge of an enormous growth in sales. All those long lasting old Macs are going to be replaced in the next couple of years along with the first batch of overheating, underperforming, 32-bit Intel Macs (overall economy willing). Then, as time moves forward, Apple will join the rest of the industry in seeing rapid replacement of computers leading to even higher sales again. That is, of course, if Apple makes machines people want and can afford to buy.
Packard Bell isn't sold in the United States. But that is the question, is Acer really selling more machines or is the growth because they got to count the Gateway and eMachines sales?
Interesting. Acer gains market share, everyone discounts it. Apple gains market share, everyone praises it. Now, you are stating Acer cheated? (is that possible?). Curious, so what if they get to count Gatewayand eMachines?.So what if their growth is through acquisitions?. Is one growth more legitimate than another?.I bet when Acer checks their bank account, the money seems real. Now people are arguing Apple gains in revenue share?.. that is funny as if anyone on this message board can prove that, While revenue share is an interesting geek topic, market share has real relevance.. less computers means less iwork sales, means less apple software sales, means less people to upgrade their machines. Maybe you think apple has a winning formula.. perhaps they should take it up a notch and sell their computers for even more so they can lose more market share and maintain revenue share. Btw, that is stupid measurement.. is that a made up term?.. revenue share?. What happens when some other company overtakes apple in this made up geek term?.. what?.. then you'll gonna say apple lost marketshare and revenue share but gained in coolness share (hey, if you get to make up a term, so do i)
You keep throwing out this fallacy. Who else besides you claims Apple make 30-35% margins? Please give us evidence.
I guess when Apple releases their financial data at the end of every quarter you bury your head in the sand so you can't see what the rest of us do.
Direct quote from http://www.apple.com/pr/library/2008/10/21results.html
"Gross margin was 34.7 percent, up from 33.6 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter?s revenue."
Interesting. Acer gains market share, everyone discounts it. Apple gains market share, everyone praises it. Now, you are stating Acer cheated? (is that possible?). Curious, so what if they get to count Gatewayand eMachines?.So what if their growth is through acquisitions?. Is one growth more legitimate than another?.I bet when Acer checks their bank account, the money seems real. Now people are arguing Apple gains in revenue share?.. that is funny as if anyone on this message board can prove that, While revenue share is an interesting geek topic, market share has real relevance.. less computers means less iwork sales, means less apple software sales, means less people to upgrade their machines. Maybe you think apple has a winning formula.. perhaps they should take it up a notch and sell their computers for even more so they can lose more market share and maintain revenue share. Btw, that is stupid measurement.. is that a made up term?.. revenue share?. What happens when some other company overtakes apple in this made up geek term?.. what?.. then you'll gonna say apple lost marketshare and revenue share but gained in coolness share (hey, if you get to make up a term, so do i)
Revenue share is actually very easy to understand.
Imagine a pie that represents all the money that was spent on computers last year. Apple got to cut the pie first. They took a small yet significant piece. The rest of the pie was cut into 99 pieces and served to all the PC makers.
This year Apple takes their same small piece of the pie again only this time the remaining pie is cut into 109 pieces.
So the market grew 10% in unit sales. There were 110 pieces of pie this year as opposed to only 100 last year.
But the pie wasn't any bigger; it was just cut into more pieces and Apple got the same size piece (revenue share) that they did last year.
I guess when Apple releases their financial data at the end of every quarter you bury your head in the sand so you can't see what the rest of us do.
Direct quote from http://www.apple.com/pr/library/2008/10/21results.html
"Gross margin was 34.7 percent, up from 33.6 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter?s revenue."
That gross margin is calculated based on ALL sales realized in fiscal 2008. It was based on 32.5 billion dollars in net sales from every product sold in every country. This includes Mac, iPod, iPhone, software, extended warranties, Music related, etc.. It doesn't mean that every product has a 35% margin. iPods and iPhones are probalblly closer to 50%. Extended Warranties are probably in the 80% range. Macs are more likely in the 20 to 25% range. It also includes any favorable foreign exchange rate. The gross margin is the total sales of all products ($32.5 billion in fiscal 2008) minus the total cost of doing business ($21.3 billion in fiscal 2008). It does not mean that every product Apple sells have a 30 to 35% "Apple Tax". If Macs has a 30 to 35% margin, Apples gross margin would easily in the the 40 - 45% range.
Go here to learn more. page 41 to 46
http://library.corporate-ir.net/libr...L_10K_FY08.pdf
Apple margins on Macs are in line with that of Dell PC's. Dell also makes over 20% margin on their expensive PC's. What bring down their overall margin on PC's is that they sell a lot of $399 desktops and $699 laptops. These cheaper units only have about a 10% margin. Thus Dells average margin is in the mid teens (about 15% and declining the last I remember) for all PC sales.
Apple don't break down their margins based on products. But when you think of all the products Apple sells, Macs probably has the lowest margin of any of their core products. And it's most likely below 30% in most cases. But you have to remember that a 25% margin on a $2000 Mac is $500. While a 50% margin on a $150 iPod is $75. And an 80% margin on a $350 extended warranty is $280.
Revenue share is actually very easy to understand.
Imagine a pie that represents all the money that was spent on computers last year. Apple got to cut the pie first. They took a small yet significant piece. The rest of the pie was cut into 99 pieces and served to all the PC makers.
This year Apple takes their same small piece of the pie again only this time the remaining pie is cut into 109 pieces.
So the market grew 10% in unit sales. There were 110 pieces of pie this year as opposed to only 100 last year.
But the pie wasn't any bigger; it was just cut into more pieces and Apple got the same size piece (revenue share) that they did last year.
I am aware what it is.. i was mocking it. Revenue share is the code for "I'm losing market share so to feel good, i put out this other metric that no one on wall street cares about". There is a reason all companies obsess about market share. I bet supercomputers have a huge margin (after all, really, how much can a 100 million computer hardware cost.. most of the cost is for intellectual property)... so, a company who sells two supercomputers but has only like 0.0003% market share would quote revenue share to feel good.. no one cares about revenue share.. when you have to quote that number, you are losing
Just gonna throw out backless claims or you gonna put some backbone into it. Please explain (preferably in list format) which of his ideas you are referring to & where they originally came from.
The original logic board and ipod are two that spring readily to mind.
SJ's great strength is convincing people that they 'need' his product.
He is an excellent marketeer, nothing more nothing less.
You keep throwing out this fallacy. Who else besides you claims Apple make 30-35% margins? Please give us evidence.
google is your friend....
or just even read their annual results.
I am aware what it is.. i was mocking it. Revenue share is the code for "I'm losing market share so to feel good, i put out this other metric that no one on wall street cares about". There is a reason all companies obsess about market share. I bet supercomputers have a huge margin (after all, really, how much can a 100 million computer hardware cost.. most of the cost is for intellectual property)... so, a company who sells two supercomputers but has only like 0.0003% market share would quote revenue share to feel good.. no one cares about revenue share.. when you have to quote that number, you are losing
Are you really going to sit there and say market share is a more important measurement of success than profit? Apple could make huge advances in market share by selling a $500 netbook, but they'd probably lose money doing it. Sounds like a great business strategy to me
Are you really going to sit there and say market share is a more important measurement of success than profit? Apple could make huge advances in market share by selling a $500 netbook, but they'd probably lose money doing it. Sounds like a great business strategy to me
Oh it's a strategy. BMW uses that strategy too but i doubt they will generate as much revenue as Toyota or as much profit. The more of something you can sell, the cheaper you can sell it while maintaining your profit. Allow me to explain to the slow among you..
If person A sells 10 items at $50 profit/item, then person A makes $500 profit.
If person B can sell 100 item at $20 profit/item, then person B makes
$2000 profit.
That is why everyone except Apple fans look at market share.. do you realize in terms of units the difference a 1% market share has?.. 1% probably represents over 1 million units. At that scale, you can definetly still make more profit while selling each item at a lower price. I realize this is a difficult concept for apple fans to grasp, hence why i included basic economics for dummies above.
Oh it's a strategy. BMW uses that strategy too but i doubt they will generate as much revenue as Toyota or as much profit. The more of something you can sell, the cheaper you can sell it while maintaining your profit. Allow me to explain to the slow among you..
If person A sells 10 items at $50 profit/item, then person A makes $500 profit.
If person B can sell 100 item at $20 profit/item, then person B makes
$2000 profit.
That is why everyone except Apple fans look at market share.. do you realize in terms of units the difference a 1% market share has?.. 1% probably represents over 1 million units. At that scale, you can definetly still make more profit while selling each item at a lower price. I realize this is a difficult concept for apple fans to grasp, hence why i included basic economics for dummies above.
The problem with your comments is that revenue share shows how much of that market's money you're getting. If you have a revenue share of 10% and a market share of 1%, that's 10x better money (at least cash flow) than a market share of 10% and a 1% revenue share.
As it is, for 2008, it looks like Apple had half the revenue of Dell, despite having a lot less than a quarter of Dell's market share. We'll probably see similar levels of net profit between the two as well.