[dasil003]

The remarkable thing about Apple of late is not that they target a profitable niche (which is a given with their product pricing), but how much they grow their niches. They did it the iPod, iPhone and iPad.

If Apple stopped selling these things tomorrow would other vendors capture the surplus? Or would people just go back to spending more money on other things?

Whether Apple exists or not, it doesn't seem like other vendors can raise their margins because they are in such a foot race. Apple has somehow risen above the fray through a combination of doing integrated hardware and software better than anybody and mastering the supply chain. Where HTC and Samsung are trying to one-up each other on screen size, Apple holds onto their margins selling a smaller screen for a higher price. This seems crazy until you actually use the latest Android phone and you're like "Why the F can't they get the screen to work half as good as an iPhone".