Since when did profit become the one and true metric?
This is like wondering whether you'd be better off running a grocery store rather than a software business. Profit is the only metric. The idea that this notion started with Apple is strange.
This is like wondering whether you'd be better off running a grocery store rather than a software business. Profit is the only metric. The idea that this notion started with Apple is strange.
But time and time again in the tech world we've seen that it's much easier to build something cheap and ubiquitous and eat your way up the value chain than it is to start at the top and try to tenaciously cling there. It didn't work for Apple last time and I think it's starting to slip for them again now.
Sun, against IBM and AT&T.
Red Hat, against Sun.
Salesforce against bespoke business solutions.
Google Apps against Microsoft Office.
Gmail against MS Exchange.
More generally, read/refer to Clayton Christensen's Innovator's Dilemma.
From my connections, I'm aware that much of the startup world is on some mix of Gmail for Domains, Google Apps, and/or Mac for desktops/laptops. Microsoft really doesn't play.
Granted, those are small accounts, but I've also seen some household name established businesses ditch Exchange for Gmail. And in a world for which changing enterprise platforms almost universally elicits dread, the announcements were met with cheers. Really loud cheers.
And to answer in part: again, read Christensen. It's not that the cheap competition generates more revenue (though in some cases it does). By that metric you're making the same strategic error as recoiledsnake. It's that by growing marketshare, disruptive innovations suck the revnue out of the market.
It's what Red Hat did to Sun. It's what Craigslist did to classified advertising.
It's what Gmail's doing to Exchange.
Profit is not the only metric. Market share is a valid metric to compare products (as long as you have a sustainable position).
If android was selling five times as many units as apple, but with only 15% the margin, then apple would still be the most profitable, but would be losing the mindshare war.
Eventually devs would be concentrating their efforts on android first, and perhaps only for android. In the long term, marketshare is the more important metric.
In the case of Apple vs Samsung, the smart phone market is at a different level of maturity that lack of market share is not going drive developers away from iOS, but if we were much earlier in the market then it would be a significant issue for them.
What's Samsung's story?
I don't know what sort of margins Samsung is making on their devices, but they don't have to make as much per device as Apple to still be a success.
Wasn't it just yesterday that Gruber was comparing revenues from a hardware business(iPhone) to Microsoft's primarily software business, instead of profits which would make more sense?
Like Gruber, don't like Gruber, I don't care. But let's not introduce the meme that "profit" is a meaningless metric. It is the only metric. Companies that are optimized for something other than profit today are doing so in the service of profit, and nothing other than profit, tomorrow.
"Revenue", less profits, is money that doesn't belong to you.
"Revenue", less profits, is money that doesn't belong to you. Keeping score with it is pretty silly. Want a lot of revenue? Start a grocery store, but sell everything at a 10% loss.
Your argument is invalid.