Indeed they are the business. Business means making money not market share. That post misses one small graph: the profit share of Apple in mobile space.
But the reason they're currently able to extract the profit they are from the market is that they've been able to build an aura as the only true 'premium' quality device, in some people's mind I've no doubt the only device of its kind.
That isn't sustainable. Both awareness and quality of competitor devices (primarily Android) is rising, and if unchecked will become a truly serious competitor to Apple. Who are then left with a premium but niche device that's incompatible with the software base of the largest platform and more expensive, and they're left selling look, feel and image over functionality for a premium - otherwise known as the 1990s MacOS strategy.
This leaves them two alternatives:
* Try to remove competitors from the market to protect your position and so margins. This seems to be the current 'patent war' strategy.
* Start trying to compete on volume. Low-end devices to get customers into the iOS ecosystem, price competition on the premium devices. It's working with tablets after all, where the major competitors to the iPad are still baffling me by producing half a netbook's components for twice the cost rather than merely 1.5 times the cost as Apple have. Problem, though, is that the whole market volume strategy increases costs and workloads, decreases margins and starts chipping away at the premium image.
Short answer: I don't see how Apple's current strategy is sustainable in the long-term. If that revenue graph is accurate, I'd be shorting Apple's stock.
That's the picture today with smartphones accounting for 28% of the total phone market. If Apple's market share doesn't keep up with smartphone adoption their profit % will go down. That's simple math. The notion that Apple doesn't care about market share is absurd.
Right, but we have to limit ourselves to the upper segments of the smart phone market. If we include the cheapo Androids when talking about smart phones then Apple's relative market share may very well drop in the coming years (unless they come up with a lower-end iPhone but even a low-end iPhone would probably not exactly be low-end).
But I agree that they cannot afford to lose ground to HTC, Motorola, LG and Samsung's high-end phones.
I don't think you understand the math there. Unless competitors claw their way up to Apple-like margins, market share (or share growth) will decline much faster than profit share will. Even if profit share declines, that doesn't mean that actual profits decline.
That isn't sustainable. Both awareness and quality of competitor devices (primarily Android) is rising, and if unchecked will become a truly serious competitor to Apple. Who are then left with a premium but niche device that's incompatible with the software base of the largest platform and more expensive, and they're left selling look, feel and image over functionality for a premium - otherwise known as the 1990s MacOS strategy.
This leaves them two alternatives:
* Try to remove competitors from the market to protect your position and so margins. This seems to be the current 'patent war' strategy.
* Start trying to compete on volume. Low-end devices to get customers into the iOS ecosystem, price competition on the premium devices. It's working with tablets after all, where the major competitors to the iPad are still baffling me by producing half a netbook's components for twice the cost rather than merely 1.5 times the cost as Apple have. Problem, though, is that the whole market volume strategy increases costs and workloads, decreases margins and starts chipping away at the premium image.
Short answer: I don't see how Apple's current strategy is sustainable in the long-term. If that revenue graph is accurate, I'd be shorting Apple's stock.