A Big Misunderstanding

http://daringfireball.net/2012/12/big_misunderstanding

by shawndumas • 14 years ago

15 5 14 years ago

Awesome. Apple Stores are now the most profitable in America: http://mashable.com/2012/08/15/apple-stores-infographic/

aidenn0• 14 years ago

The bigger misunderstanding was when Cliff Edwards applied the arithmetic of average margins to calculate Apple's potential profit. Apple's margins are ridiculous, and so they need to gross far less at the retail store than e.g. gateway to make them worthwhile.

thasmin• 14 years ago

This article was written in 2001. It wasn't until 2005 and the iTunes Music Store that Apple growth began to explode. The iPhone was Apple's first product the can be supported at a store that was a smash hit and that was release in 2007. It's easy to say that an article written in 2001 was inaccurate, but it's hard to say that the analysis was wrong.

rubinelli• 14 years ago

It's more than that. Apple announced the first iPod months after this article was published. One could even say that his analysis that Apple needed to expand into other markets to grow was correct -- Mac OS market share hasn't changed much in the last decade -- but Apple executed much better than most expected, taking the high-end of consumer electronics instead of duking it out with PC makers for the mid and low-level computer market.

outside1234• 14 years ago

The problem with his analysis is that Android is increasingly delivering better cheese and crackers as well at low margin.

At the limit, I'd expect within a year or so that mobile devices go free on the low end to consumers with the real monetization strategy being selling in cloud services. It strikes me that Amazon is incredibly well placed for this, Google well placed, and Apple poorly placed (see maps, see iCloud, see their amateur hour have-to-take-the-store-offline-to-add-products).

Its hard to see given this how this doesn't play out exactly like the PC market, with Android sweeping up 90% of the market and Apple dwindling to the diehard 5%.

A Big Misunderstanding

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