>>1) Profit per share is the measuring stick for investors, and a dominant Android OS will certainly impact that number.
2) To the extent that the iPhone shrinks as a share of total business, margins are bound to fall. The rest of the business lines dont have margins anywhere near the iPhone.
My question is, why have 50%+ margins on the iPhone suddenly become sacrosanct? They have lower margins in every other business, so lowering margins should at least be under consideration....and yes, at least part of that decision process would include whether they could stem the sudden rise of Android.<<
You're stating number one that as an axiom, which I am not sure I can agree with, unless you want to provide some supporting logic. I suppose that if there were no Android, some people who would otherwise buy an iPhone won't. But given that Apple currently sells all the iPhones they can make, I don't see that having a meaningful effect on revenues or earnings per share.
I'm also not sure why the iPhone (and other iOS devices) will necessarily shrink as a share of total business.
All that having been said, I am not claiming that Apple's margins will always stay exactly where they are. The company may well reduce them somewhat for competitive reasons. But the margins aren't going to "fall through the floor" as many Android boosters have predicted. That was my point, and I'm sticking to it. |
