Assuming it would triple global share is too optimistic, as there are plenty of other great phones ~$400.
IMO, those phones wouldn't stand a chance against a $325 iPhone, but of course, this was a straw man argument. Obviously, unit sales and market share would increase, to what extent is arguable, but what is known is that profitability would decrease by tens of billions annually. Share price and market share would diverge again, but in opposite direction.
This would crush hardware margins but cause market share and overall sales to go nuts. Revenue from the ad partnership (and perhaps from apps/content when other OSes are run, if that was included in the arrangement) would more than make up for it.
You are too optimistic about the size of the advertising opportunity. You are talking about taking Apple's $95B in iPhone hardware revenue, and cutting out 30%, giving up $30B in pure operating profit. In return for what? Google only generated something like $12B in profit for all of 2013, and just partnering with Google doesn't mean Apple gets to take all of Google's profits.
Apple has a golden goose in the iPhone. It is asinine to kill it, especially while it is still growing. |
