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  1.    #1  
    For whatever reason, we all love to compare one tech company against another. Sometimes, we debate endlessly about build quality or technical specs. When we really want to duke it out, we trot out the sales numbers. Marketshare has become the de facto trump card. But, should it be? Is it really the Ace of spades, or only the queen of clubs? TiPB, one of PreCentral's sister sites, highlights something else to consider when making comparisons: profit-share.

    The amount of money Apple makes is considered to be obscene, by some. The chart in the TiPB article shows that while Apple's iPhone controls only 3% of the market, it hauls in 39% of the profit.

    Some people do a victory dance when the total number of robot phones, combined, equals or surpasses the number of iPhones sold. But, is that victory dance justified? How important is the metric of units sold if that number has nothing to do with the amount of money it earns?

    I don't know the answer, but I suspect companies would rather have Apple's profit-share. Because they can't seem to approach it, they manufacture the best triumph they can out of marketshare numbers. I also suspect that on tech discussion boards like this one, marketshare is the easier number with which to proclaim victory.

    I found the article interesting and thought it might be fun to discuss. I'll have more to say as the thread progresses.

    Thoughts?
  2. #2  
    First off, anybody doing a "victory dance" when a company they have no financial investment in makes more money probably has a few issues.

    Second, there is no "victory" to be proclaimed. HTC isn't hurting for money, nor is HP, nor is Google nor is Samsung, etc. These companies will thrive and continue to release competing products and operating systems for people who have decided to not use an iPhone for whatever reason.

    Apple can't be compared one-to-one against any other company. There is no other company that makes computers, media hardware, operating systems for both, and runs a content/app store that feeds their devices as well. These things leverage against each other, so they SHOULD be amongst the most profitable companies in these spaces because they are more in control of each aspect of their product. Their media player competitors are not. Their phone competitors are not. Their computer competitors are not. Doesn't seem like any of them - even HP - are trying to be that, either.

    I do find the Apple fetish interesting, tho...
  3. #3  
    There's no simple answer to it. While profit is the most important overall, profit is not the only answer. It's much like asking which is more important, food or water. Water is the simple answer, since you can't go more than 3 days or so with no water, and you can go 30 days with no food. However, you can't say "good, I'll concentrate on water, and forget about food".

    A company's profit is the over-riding concern, overall. However, without market share, pofit goes away.
  4. #4  
    Quote Originally Posted by mikah912 View Post
    ...
    I do find the Apple fetish interesting, tho...
    Especially on a Palm site...
    Sigh ... I find myself agreeing with you more and more these days. Scary, huh?
  5. #5  
    Quote Originally Posted by hparsons View Post
    There's no simple answer to it. While profit is the most important overall, profit is not the only answer. It's much like asking which is more important, food or water. Water is the simple answer, since you can't go more than 3 days or so with no water, and you can go 30 days with no food. However, you can't say "good, I'll concentrate on water, and forget about food".

    A company's profit is the over-riding concern, overall. However, without market share, profit goes away.
    Well the Mac side of apple's business has been increasing profits with not much movements in market share.

    But Apple really is a outlier and will be a case study for business schools.
  6. #6  
    Quote Originally Posted by UntidyGuy View Post
    The reason why we discuss market share so much around here is that it gets the attention of carriers, retailers, developers, and accessory makers. It also is the best way to ensure that your device will be continually developed and supported.

    Market share is probably the single answer to most of the questions on this forum like:

    "Are we going to get a version of ...."
    "Will this phone ever be compatible with ..."
    "Will this device ever be on .... network?"
    "Will we get something new soon?"
    "What is the chance of my .... being discontinued and orphaned?"
    "Will my company ever support this device?"



    A case can be made that is you are bullish on a companies' profit outlook, you buy their stock. If you are bullish on their marketshare and ecosystem outlook, you buy their devices.

    True, but I think Apple proves that enough mindshare and profit makes the marketshare factor - at least how much it matters to developers, companies, etc. - almost insignificant. And for that, they should be applauded. They are, indeed, a rather unique bird.
  7. #7  
    Quote Originally Posted by hparsons View Post
    Especially on a Palm site...
    Sigh ... I find myself agreeing with you more and more these days. Scary, huh?
    Yeah, I noticed. Apple zealotry will do that. I appreciate you otherwise, though, HP. This forum wouldn't be the same without you.
  8. #8  
    Quote Originally Posted by mikah912 View Post
    Yeah, I noticed. Apple zealotry will do that. I appreciate you otherwise, though, HP. This forum wouldn't be the same without you.
  9. #9  
    Quote Originally Posted by Brain Mantis View Post
    Shhhh....we're trying to keep it quiet!
  10.    #10  
    Quote Originally Posted by Brain Mantis View Post
    Priceless.
  11.    #11  
    Quote Originally Posted by mikah912 View Post
    True, but I think Apple proves that enough mindshare and profit makes the marketshare factor - at least how much it matters to developers, companies, etc. - almost insignificant. And for that, they should be applauded. They are, indeed, a rather unique bird.
    Mindshare is definitely the key. Excellent point. Question, how do you get it if you don't already have it? Apple has not always had it. They seemed to have captured it overnight with the success of the iPod. Now that I think about it, the iMac may have been the beginning. One thing is for certain, they have it in spades with iOS devices.

    I have been talking about the Apple fetish around here almost from my first post. The real Apple fetish is not about supporters of Apple on this board; it is about companies that can't seem to do anything that is not reactive to Apple.

    I know most people around here disagree, but I always felt the Pre was a result of Palm's Apple fetish. From building the company around Apple expats, to the iTunes debacle, to almost every comment made by spokespeople, Palm had defined themselves by Apple.

    HP also has an Apple fetish. The first Envy notebook was a straight-up KIRF of the MBP. They had their own flirtation with the iPod. Now, it is job one for HP to make a pad similar to the iPad. Other companies are just as bad. In the end, though, it is because Apple has so much mindshare. They own the conversation; they are the conversation. Nothing moves in this space that is not reactive to, or proactive to get in front of Apple.

    With all that in mind, Apple's real success may have less to do with its products, and more to do with its business model. Are there any other companies with a similar model that provide a direct comparison? I don't think so. Does this mean that mindshare is more important than marketshare? Probably not, but interesting to consider.

    By the way, how is HP on the mindshare scale of one to ten?

    Sorry about the long ramble.
  12. #12  
    Quote Originally Posted by dandbj13 View Post
    Mindshare is definitely the key. Excellent point. Question, how do you get it if you don't already have it? Apple has not always had it. They seemed to have captured it overnight with the success of the iPod. Now that I think about it, the iMac may have been the beginning. One thing is for certain, they have it in spades with iOS devices.
    They were the first company to really make the smartphone fun and consumer-focused. There was a certain cool cache that had been touched on in the featurephone segment with the RAZR and Sidekick with Danger OS. But no one thought to extend that to smartphones. Apple got a whole lot right with their first try. So they deserve the mindshare, and they deserve the acclaim.

    But now that Apple has it, other companies - conversely - can make up for the lack of mindshare by gaining marketshare. Android + Apple-esque designs and OS tweaks = that. Palm thought WebOS + Apple-esque design tweaks might get the job done too. That remains to be seen.

    I have been talking about the Apple fetish around here almost from my first post. The real Apple fetish is not about supporters of Apple on this board; it is about companies that can't seem to do anything that is not reactive to Apple.

    I know most people around here disagree, but I always felt the Pre was a result of Palm's Apple fetish. From building the company around Apple expats, to the iTunes debacle, to almost every comment made by spokespeople, Palm had defined themselves by Apple.
    Well, there are obvious Apple inspirations, but I felt and still feel that - aesthetically speaking - WebOS is a superior effort, and the concepts for multitasking, "just type"/Synergy and notifications they designed are head and shoulders above Apple and even Android. Now the execution....leaves a little to be desired sometimes.

    I owned an iPod Touch for a couple of years. I visit Apple stores. Besides the buttery smoothness of their UI, the integrated media/content ecosystem and their app selection, I find little for Palm or Hewlett Packard to try and copy going forward. They already have the raw components to be their own unique little animal that is also successful.

    HP also has an Apple fetish. The first Envy notebook was a straight-up KIRF of the MBP. They had their own flirtation with the iPod. Now, it is job one for HP to make a pad similar to the iPad. Other companies are just as bad. In the end, though, it is because Apple has so much mindshare. They own the conversation; they are the conversation. Nothing moves in this space that is not reactive to, or proactive to get in front of Apple.
    Well, Apple essentially created the consumer-focused market for smartphones and tablets, so this should be the case.

    But I'm fine with that. I don't need a company to be the first to do this or that. Just do it in the way best suited for my needs and price considerations. Apple has yet to release a MP3 player, smartphone, PC, or tablet that achieves that (my wife wanted the iPod Touch, and she only ever played music on it. A classic would've done just fine, but she wanted the flashiest...).
  13. #13  
    A very interesting read that was actually just posted yesterday: The Real Secret of Apple’s Product Philosophy | Stage Two

    Martins comment at the bottom of the page is also worth reading.
  14. #14  
    Since when did marketshare become the de facto trump card? What matters most is how much money is being generated, bottom line. Businesses are there to make money.
  15. #15  
    companies only are in business to make profit, obviously.

    So, they set a goal to make X amount of dollars.

    you can multiply any Y (market share) * Z (profit share) = X

    tons of market share at low profit or low market share at high profit.

    personally i like the tons of market share at low profit. it'll increase support which will make end users happier and make them repeat buyers.
    @agentmock

    Audiovox SMT5600 (WM) --> Cingular 8125 (WM) --> Sprint Mogul 8525 (WM) --> Palm Pre (webOS)- --> Sprint Franken Pre2 (webOS) + 32gb Touchpad (webOS)
  16.    #16  
    Quote Originally Posted by barkerja View Post
    A very interesting read that was actually just posted yesterday: The Real Secret of Apple’s Product Philosophy | Stage Two

    Martins comment at the bottom of the page is also worth reading.
    That article raises an interesting point worthy of discussion. Who do companies see as the customer? With Apple, it is the consumer. That is the only customer they seem to care about. Don't get me wrong, they are in it for the money, not the friendship. It is just that they have chosen to make their money by courting the end-user.

    Other phone manufacturers have a different idea of the customer. To them, the customer is Verizon, AT&T, Sprint, and T-Mobile. All of their products and services are geared to making the big four happy. The end user seems to be only a secondary consideration.

    For RIM, and HP, the customer is often the IT manager. They make products that can be easily sold to IT department heads. Again, the end-user is not the first consideration when designing an experience with the product or service.

    I have a feeling that this is why customer satisfaction is so high with Apple. The fact that Apple's products are designed with the person opening the box in mind, tends to translate into a better, overall experience. It is not that others can't do it, but that they are more interested in pleasing the reseller.
  17. #17  
    Interesting discussion for sure here. Got me thinking that profitability and market share trend might be the total picture. Nokia has market share and usually is profitable, but they're really not healthy and it shows. Ditto for Blackberry. Having a lot of eroding market share isn't as promising as having less market share, but rising rapidly in that share.

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