[AllenKids]

Market is not fixed in place, when one factor changes, other numbers vary accordingly.

For example 30% of a total 100M units sold is roughly the same of 19% of a total 150M units sold. IF APU stay the same, it makes no difference financial wise to Apple. But to achieve 30% of 150M units sold, Apple may have to branch out another line of more affordable phones, it may have to give more control to the carriers, it may have to iterate on a faster pace than it is comfortable with, all of these would hit Apple's margin and equal things out.

With Nokia LG SE and Motorola in the red, Apple is now siphoning about 50% of industry profit at a market share of, what, 5% of all phones sold?

Which is not to say market share is not important, but it is not the utimate goal.

For now Apple's more urgent problem remains to be manufacturing capability, its fancy process or unique components always causes shortage upon new iOS devices launch and well into the second quarter, it almost forms a pattern (iPhone 3G/iPhone 4/iPad 2 etc). If the murmurs from Foxconn et al is to be believed the same backlog will happen to iPhone 5/iPad 3 again.

[trotsky]

Yet reports seem to indicate Apple is planning on rolling out a "budget" price point phone [1], so they probably are worried about market share after all.

Apple is on a long term digital media dominance play. They want to be the one stop locked in shop for many people's music, software, video and books. Sure they'll continue to be interested in making good money on their hardware but their evolving iOS platform strategies clearly point to what they're looking forward to. And in that version of the world where content sales is king, market share means a whole lot.

http://techcrunch.com/2011/02/10/iphone-nano/

[AllenKids]

These kinda rumors are literally a dim a dozen. I'll believe it when I see it.

Of course it is a perfectly valid strategy and Apple successfully implemented just that with its iPod line. Still the timing and implementation are everything. Handset market is clearly more competitive and turbulent, Apple is treading extremely cautiously.

[epistasis]

A "budget" price point phone would be better understood in terms of market segmentation rather than market share; i.e. getting money from people who have a lower maximum price, now that they've gotten money from those who are willing to pay more.

If they wanted market share, they would have just led with the "budget" phone.

[r00fus]

> If they wanted market share, they would have just led with the "budget" phone.

But Apple has a luxury brand, and a "budget" device would detract from that (even the lowly iPod shuffle fills a niche for well-off folks: it's small and sleek).

Budget in this context means pre-paid (as per the last earnings ). And I bet that iPhone will not be compatible with a post-paid plan (or vice-versa)... it will be interesting to see how Apple navigates this as they've been very deft at positioning new products in terms of their existing product lines.

[gonzo]

Tim Cook has made several pointed references lately to the pre-paid market.