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I never ever had to switch profiles in Firefox in my 20 years of usage.

Neither did I for 10 years until I discovered the concept. Then I started making use of it and liked it. Same for everybody else around me, they either already knew of profiles and used them, or started using them once they learned about them.

Thing is, they used them in Chrome, because that's where it was easy and obvious to do. And since Firefox does not have an equivalently easy and obvious workflow, they keep using Chrome, and teach others as well to use Chrome. Reason why the drop in numbers happen.

Dont you think it's more because Chrome is backed by a trillion dollar company and it's kinda the go-to browser nowadays because everybody believes Chrome is faster than Firefox? I have a bunch of friends using Chrome, but they all say it's for speed, not for switching profiles?

And I have a bunch of friends that say it's because it lacks the profile functionality and they can tolerate the speed.

It's not the only issue Firefox has, but it's the highest impact, lowest effort one they have. Performance improvements are hard, PWA is hard to implement. Putting a better UI on existing functionality is simple by comparison. They could score an easy win here, but they choose not to.

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