To: HerbVic who wrote (170254 ) 6/3/2014 6:48:54 AM From: Ryan Bartholomew Read Replies (1) | Respond to What does the percentage of Apple's profits coming from Macs have to do with the Mac's success after an extended period of small market share? I was agreeing with the argument that Apple has been able to maintain a profitable product line (Macs) for many years despite never holding a large market share in that segment. A common argument is "Apple doesn't need to worry about iPhone market share - the iPhone can carve out its niche and remain a profitable one even without being commonplace". This is true, but if you look at the Mac (or other premium-priced product lines with a loyal customer base), it's obvious that pricing is a major factor in restraining market share. Imagine if Apple sliced the price of Macs drastically while maintaining quality and everything else constant. Sales would climb and they'd have a larger share. If dramatic enough, this might lead to OS X attracting much more developer and tangential product interest, as it would become a more integral part of the scene. Apple hasn't and likely won't enact such a price cut because it would eliminate their profits from that line, which are largely dependent upon the hardware premium. your line of reasoning is deeply entrenched in the belief that share trumps profits. It doesn't. To you, the Mac is trumped by the iPhone, and that tarnishes its success. It doesn't. I haven't suggested share trumps profits. All else being equal, greater share feeds profits because the more prominent a product becomes, the more outside interest it attracts, the more ingrained it becomes, etc. For example, when automobile or home automation manufacturers look to the market to decide which platforms their products will support, they're unlikely to focus upon Blackberry or other platforms that occupy a tiny and dwindling segment of the market, even if that segment is profitable. They'll design for Apple and Android because they'll capture most users that way. However, they'll stick with them only to a point. If iOS or Android dropped to, say 10% market share, they'd probably be placed on the development backburner as well.
