1. Companies are run by people. The goal of those people is quite often not making the biggest possible profit for the company.
2. In the computer business, and in many other businesses, it has been shown that making decisions solely looking at profit will damage the business in the long term. If you set the company goal "we want to make as much profit as possible" and act on it, it will end in tears. Since the first iMac, Apple has consistently worked to give customers the best possible products, built and sold with decent profit. And trying to achieve this goal, not the search for profit, has made Apple the most profitable company in the world, with their last quarter being the most profitable ever.
Try the 15" Retina MacBook Pro. Just try it. Then go back to whatever laptop you are using that is made from the same parts, sourced at the same locations, and whenever you use it, you feel the pain in your heart.
Your post is partially correct. There are two ways of making a profit. One way is to just focus on costs. Essentially, that involves milking an existing revenue stream for profit. That will most certainly lead to unfavorable results.
The other way is to look for ways to both grow revenue and cut costs.
Apple aims to make a profit as any business should, except that they don't just focus on cost-cutting. They focus on growing revenue and cutting costs.
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Exactly.
You know the funny thing is, if you make a great product, making a profit is much easier.
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And this is the problem with the stock market, the average investor doesn't know the difference between revenue and earnings.
Tell me about it. I posted on a different thread about this very issue. There are many articles talking about how Android is beating Apple, and that has probably been a factor in the declining stock price.
But when one looks at the hard numbers, a different picture emerges. What should be of paramount importance to an investor is the ability of a company's business model/strategy to generate cash flow.
IMO, Apple's iOS strategy demonstrates greater cash-flow generating potential than Google's Android strategy.
Many Wall Street analysts are saying Apple needs to introduce a low-cost iPhone in order to take on Android better, particularly in China. Their argument is that Apple ought to grow their market share in this region.
It's likely that the stock price would be much higher than it is today if Apple were to do this. But frankly, these Wall Street analysts' armchair CEO behavior fails to take into account the fact that Apple will earn less profit per phone with this "cheaper iPhone" even though they'll have more market share. Lower profit impairs the potential of Apple's product lines to generate cash.
Disclosure: I am long Apple.