[rayiner]

Lenovo made less than $500m net profit across the entire company last year, on $30b in revenue. These are margins you can sustain only if you're a Chinese ODM or a company like Samsung that makes money from all the parts in everyone else's phones too. It's certainly not the kind of money that supports expensive R&D. Apple can throw a billion at developing sapphire glass or a new tooling method, and beat their competitors over the head with it with phones that are lighter, stronger, etc. You can't play that game being a low-margin company like Lenovo.

[Danieru]

Ah, so that's where we've moved the goal post.

Sorry it might take me a little while to get there, it's looking like I better grab a golf cart.

[tptacek]

Confusing. How is gross margin a shift of goalposts in a thread about profits?

[Danieru]

Fair, but this discussion is a continuation of the Android vs iOS debate which has been raging for half a decade.

My memory is horrible but I remember it going: 1. Android has no apps 2. Android has no market share 3. Apple's market share is larger 4. iPhone is always the best selling phone 5. iPhone has the only responsive interface 6. No single manufacturer is making big profits 7. Only Samsung is making large profits.

Now I should admit my bias, I never considered iOS comptetitve since it is not open source. With that said it is nice to see Android becoming competitive even if you don't exclude the proprietary systems. In the end I just find the idea that we should be happy Apple is making profits as silly.

[rayiner]

We should be happy Apple is making profits. Because companies like Lenovo and Acer that eke out an existence playing in competitive markets where prices are driven to marginal cost don't have the money to pour into R&D. Look at what Apple is doing with Cyclone: the first mass market CPU to challenge Intel in IPC since Opteron a decade ago. Its a game they can only play because the generate a ton of cash to throw around.