I have to be honest, I found Andrew's analysis easy to understand. Apple sells a unique system. If you like that system, then you must pay the Apple price and clearly a lot of people are willing to do so. Android is available on a plethora of handsets. This makes most of the handsets functionally identical and hence it can be difficult to justify premium prices. Hence the bulk Chinese manufacturers and Samsung can make money, but Sony and HTC cannot. The only way for these manufacturers to survive is either stop making smartphones or find a way of differentiating their smartphones from the masses. This is not an easy thing to do and it can be a good way of losing money.