My thought is if Apple had a way to monetize their users to the tune of $50 a year, then they should think about getting into that business, but why give up the thriving hardware business that generates over $160 in profit a year? Why not do it in addition?
"Getting into that business" isn't realistic on their own any more than it worked for Yahoo or Microsoft. They need to partner with Google to do it best, else settle for half-baked monetization as they have now. No need to get rid of the thriving hardware business. The idea would be to stop the eroding market share and boost sales by becoming more price competitive. I think a $649 iPhone 6 would do a heck of a lot better than a $749 one, for example.
An extra $50/ user would be nice as incremental revenue ($25B), but if it's supposed to replace a significant amount of hardware revenue, let's see it demonstrated first. Again, the $50 was just a number I threw out there. As you're correctly suggesting, what really matters is the balance between what they'd give up and what they'd add.
Similarly, if Google had a way to monetize IPhone users to the tune of $50 a year, they should also get into that business. Mobile ads isn't enough, it generates only $10B a year in revenue (not profit). They already make a lot from iPhone users, but would make more with a direct partnership.
What do you think is the pool of advertising dollars available globally? Or do you see it as unlimited? Not sure what it is globally, but it's not unlimited. What I know is that online (and mobile) continues to grow as a bigger share of a growing overall ad market. The metrics involved allow much more measurable performance and efficient ad spend than traditional media, so it's just just dumb luck or consumer preference. |
