I think that apple could absolutely thrash the handheld competition. Apple has so many people with iPods who carry them everywhere. Now why don't people carry their nintendo DS everywhere? Because they're huge.
Still doesn't answer the question of how come there isn't an attach rate of at least 1 with respect to games and the iPod. Plus everyone said the same thing about Sony, didn't happen. I would love to eat my words, but I think Apple just couldn't compete with Nintendo in the game department.
What apple can do is draw on it's market of iPod users for a kind of user base. What everybody wants is a device that can do everything, it worked for the iPhone because people want their iPod and phone as one. I'm sure that there is a large market of people who want their handheld and iPod to be one device. I know i do.
Let me put it this way, Nokia once thought that since everyone carries a phone why not make the phone a gaming system. It was called the NGage. It tanked, even though it had decent (sounding) games for it.
So apple could create an iPhone/gameboy type device, it would be quite an interesting breed.
To be honest though, i really don't see this happening.
Like I said before, no one has ever toppled Nintendo's handheld reign. Sony is the closest. I just don't see Apple being able to translate iPod users into enough game players to make it a worthwhile thing.
Who said anything about retailer margins? I was talking about Apples margins. You know the PS3 cost 400 dollars to make, If they sell it to you for 399 how much are they making? (Hint: not a whole lot) Apple has never sold a device at a loss. Ever. Why would they start?It does seem like apple is good at F***ing up then many years later taking those same ideas and reusing them, like you said, the rokr, as well as the newton.
I don't know what kind of margins apple makes, but you should know that there is slim to no profit at all for retailers on most apple products.
Also, who says that apple will be competing with the PS3? How about the wii, it's kind of in it's own category.
No the Wii is in the same category as the 360 and the PS3 the 5-99 category includes the 18-34 folks as well. But for the sake of the argument lets say Apple is going up against the Wii. Now what can Apple bring to the table that is going to best the Wii?