

A Big Misunderstanding - shawndumas
http://daringfireball.net/2012/12/big_misunderstanding

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thasmin
This article was written in 2001. It wasn't until 2005 and the iTunes Music
Store that Apple growth began to explode. The iPhone was Apple's first product
the can be supported at a store that was a smash hit and that was release in
2007. It's easy to say that an article written in 2001 was inaccurate, but
it's hard to say that the analysis was wrong.

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rubinelli
It's more than that. Apple announced the first iPod months after this article
was published. One could even say that his analysis that Apple needed to
expand into other markets to grow was correct -- Mac OS market share hasn't
changed much in the last decade -- but Apple executed much better than most
expected, taking the high-end of consumer electronics instead of duking it out
with PC makers for the mid and low-level computer market.

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outside1234
The problem with his analysis is that Android is increasingly delivering
better cheese and crackers as well at low margin.

At the limit, I'd expect within a year or so that mobile devices go free on
the low end to consumers with the real monetization strategy being selling in
cloud services. It strikes me that Amazon is incredibly well placed for this,
Google well placed, and Apple poorly placed (see maps, see iCloud, see their
amateur hour have-to-take-the-store-offline-to-add-products).

Its hard to see given this how this doesn't play out exactly like the PC
market, with Android sweeping up 90% of the market and Apple dwindling to the
diehard 5%.

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aidenn0
The bigger misunderstanding was when Cliff Edwards applied the arithmetic of
average margins to calculate Apple's potential profit. Apple's margins are
ridiculous, and so they need to gross far less at the retail store than e.g.
gateway to make them worthwhile.

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chrisringrose
Awesome. Apple Stores are now the most profitable in America:
<http://mashable.com/2012/08/15/apple-stores-infographic/>

