back to article Fat margins squeeze Apple against Android

There are a million ways to over-analyse iOS versus Android market share, but one thing is often overlooked: Apple's high-margin strategy depends upon buying customers through subsidies, and may not be able to keep pace with Android's low-cost model over time. Google's Android growth - 250 per cent in 2011 - is particularly …

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FAIL

Dear Matt,

Please go back to business school and this time try staying awake in class.

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FAIL

Apple believes in profit, not market share. The world is littered with economic disasters that are built on assumption what matters is market share, not profit. Market share alone never kept anyone in business. Nokia went after market share and look what happened. Android will ultimately become a cannabalised market in which you have too many phones chasing too little money (see Nokia).

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This article is flawed in so many ways........Apple isn't hurting.....heck today it was announced that the ATF is dropping blackberries for iPhones. The iPhone had the most sales over the holiday quarter and the last few months iPhone is going up as Android is evening out and going the other way.

But in the long long run I think its Microsoft all over again....we are seeing Android all over being used on junk up to good products and it will have the most marketshare just like Windows and Apple with have its own little niche market just like the Mac. There are so many junk Android phones out there and too much confusion and choices its a mess. Apple has a nice simple way of doing things and having its niche market is fine with me! Apple makes the best hardware and software and it will continue.

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I don't know which blinkered view of sales figures you are looking at (although from your phrasing I guess it's US only figures), but you might like to look at these.

http://www.gartner.com/it/page.jsp?id=1848514

Sorry they are Q3 2011, but I think they prove the point.

In summary:

Worldwide smartphone sales to end users Q3 2011

Android 52.5%

Symbian 16.9%

iOS 15.0%

RIM 11%

So getting ATF to kick out the Blackberry in their favour isn't really the fight they need to be fighting if they intend on domination.

Sure, Apple aren't hurting as long as people continue to feed their huge profit margins, but unless they are willing to remain a niche product, they will have to do something. Yes, I know, just like the Mac, but I know plenty of ex Mac users who have deserted to PC, usually because of software availability.

You only have to look at what happened to Nokia to see how quickly things can change in the mobile world.

As far as I'm concerned I'd rather have to many choices than none at all, and long may that continue.

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Anonymous Coward

iOS Market Share

Does Apple's business strategy depend on dominant marker share? Nope.

But if we are going to discuss market share, I think it's reasonable to consider more than just smart phones. Today, Apple has flogged more than 300 million iOS devices - 156 million in that last year.

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Hmmmmmm.....

So -

1) Android is going to end up on a lot of phones - basically the none Apple ones. Microsoft is going to bob along at the back with a small amount of market share.

2) Apple's computer business is based on having the majority of the high-margin business. Most of the PC business is selling a wafer thing margins.

3) Apple caused/prompted a massive take up in smart phones and tablets that spread usage of both a long way outside the usual niches for such products.

4) Everyone else is following the Apple lead in these two areas.

5) It is assumed that Apple won't make a mid/low price offering in these two market areas. But what did they do with iPod?

All of the above strongly suggests that Apple with be a declining percentage of the phone/tablet market. But they will probably have quite a lock on the high-margin part of the business, and probably record massively growing sales in absolute terms for the next few years.

As tech marches on, there will be point where iPhone/iPad "Mini" offerings will make sense - sufficient performance on a cheaper device. We have also seen, to date, the results of attempts to build cheapo tablets...

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Anonymous Coward

Indeed, how much market share did Nokia and Symbian use to have?

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