>>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.<<
I forgot to respond to this part, which I think is important.
First, the margins on the iPhone aren't sacrosanct. Apple can certainly afford to reduce them if they need to stimulate demand. But since they have no demand problem right now, I don't see why they'd need to do that.
Second, I don't think there's anything Apple can do to slow the rise of Android. As I stated in an earlier post, while there's some overlap between the two groups, the Android buyer and the iPhone buyer have different priorities. A lot of Android buyers would never buy an iPhone, no matter what Apple does.
If you will remember, when Jobs introduced the iPhone, he said Apple would like to capture 1% of the cellphone market, which at that time meant they would be selling more than ten million phones a year. But the iPhone did better than that. It blew the roof off the smartphone market, changing the game entirely. |
