[alt227]

Apple made $120 Billion in profit last year alone.

They could easily keep swallowing this if they wanted to.

But then they would only make $119 billion profit this year, and their reports would show negative growth. Cant have that now.

[jameshart]

Apple sells about 400 million units a year.

If they ate an average $100 margin decrease on every one of those sales, that profit number wouldn’t go down from $120bn to $119bn, it would go down to $80bn.

Now you can absolutely argue that $80bn is still an excessively large number, but just so we’re being realistic about what the difference we’re looking at here is, it’s not a tiny percentage of their profits, it’s a third.

[alt227]

Fair enough, I'll trust your maths.

Still if I was ceo I'd take a third hit for another year and grab that sweet market share.

[al_borland]

Only a private company can realistically do that.

[thewebguyd]

Publicly traded companies can as well. There is no legal ruling that states a company must maximize EPS or face lawsuits. Apple could justify eating the margin to retain customers, build brand loyalty, or whatever other reason they can come up and the courts give a ton of leeway to business judgements in Delaware if they were sued over it.

Their fiduciary duty just means they have to act in the best interest of the company and its shareholders and not act for personal gain. Apple just has to spin eating the margin as being in the best interest of those parties.

The real reason they don't isn't any duty to shareholders, its any sort of drop would wipe billions off their market cap and directly affect exec compensation.

[astrodust]

Amazon is right there, reinvesting profits.