Three Guys and a Podcast: Apple News & Analysis
Apple cares little about market share, much more about profits. For companies like Microsoft and Intel, market share and profits go hand in hand. This is not true for Apple.
Apple competed with Microsoft not through market share, but through margins. They proved this when Steve Jobs came back and ended the licensing program for the Mac OS. Steve showed you can make a lot of money without dominant market share. They are now doing the same thing with Android.
Google makes their money by selling ads. The more eyeballs they can get, the more money they can make. They are basically a broadcasting channel for the Internet. By offering free products to attract the largest amount of people, they can sell more ads. With Android, they need the largest market share possible in order to make a profit with ads, since they have no licensing fees and thus a very small margin. Android is heading down the right path as its market share is growing at an astounding rate and is now moving past Apple's iOS. Android should continue to grow as it is on more devices, more networks, and in more stores.
While Android's increasing market share looks bad for Apple, the opposite is true. Apples makes more money by adding value to the product instead of competing on price, like the rest of the industry does. Apple would have to reduce its profit per device in order to go after market share. Apple's decision to go after margins instead of market is paying off as they rake in over 50% of the mobile market profits. This is even better news for Apple than market share is for Google. More profits makes Apple happy and continues development on Apple hardware and software.
It is very difficult to compare Android to the iOS because each company has separate objectives and separate ways of making money. Apple sells value-added hardware at a premium and Google displays ads to as many people as they can. While we are unsure how much Google makes on Android ads, we know Apple is raking it in selling hardware. As long as Apple can maintain a good amount of market share, they will retain developers and users, and keep the iOS ecosystem strong.
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