Is it possible that Apple will settle for lower market share as long as they retain a majority of the profits? I mean look at the PC market where Apple sells relatively few units but controls nearly half of the profit. What does it matter if you only control 10% of the market if you control 90% of the profit in the long run.

Of course the issue in this argument is the App store. You could argue that by building a huge user base could allow you to shift your profits from hardware to software in the long run.