There is plenty wrong with maximizing market share if you are going to destroy your brand in the process. What is Dell known for now? Cheap computers. Want a cheap computer? You buy a Dell! So when Dell introduces an expensive (read: good profit margins) computer model, everyone says "$$$$ for a Dell? Screw that!" How do you ever recover your brand from bargain-bin status? Not an easy task. I don't think that's exactly the position a company should want to be.
Dell still sells plenty of systems, as does HP. Look at HP's revenue per year, and tell me they're complaining. No matter what the consumer market thinks of Dell, Dell still sells millions of systems in the enterprise and government markets. That's a market Apple hasn't even been able to really crack (and good luck seeing Apple crack it to any major extent).
And in regards to lower-margin products driving marketshare and yet destroying brand image, how do you explain the likes of Toyota, Honda, and even recently Hyundai/Kia? Toyota and Honda for years sold vehicles below the cost of the American manufacturers, and yet gained not only marketshare but also very good reputations.
Now look at Hyundai: while most car manufacturers have been losing marketshare or having it remain flat, Hyundia/Kia have actually been increasing their marketshare considerably. Not only that, but they're actually beginning to shed the bad reputations they have, as more and more companies consider their cars very high-quality, and yet still very much affordable.
I'm sorry, but both market approaches can exist. Yes, going for marketshare does often mean sacrificing margins, but it doesn't *have* to mean sacrificing your image as well.
I believe Steve Jobs once said in an interview that you don't lower prices because you can never raise them again. And Dell is now relegated to the status of selling $399 computers to the world. Bad move.
Funny that Steve would say that, given that at one time the cheapest Power Mac was around $2000. Apple eventually started selling them for as low as $1500. Eventually, they once again went back to $2000, and now they're at $2500+.
Even the iMac could once be had for < $1000, and now the introductory model sells for $1200.
What's that about never being able to raise prices again?
Game consoles are a perfect example of what not to do.
Newsflash: Microsoft is still billions in the hole with Xbox. Billions! Sure, they say theirs is a long-term strategy that will result in "sustained profit" as you say, but by the time they're digging out of their original hole they have to introduce a new console (at a loss) and start the whole bleeding process again. It's a never-ending process of losing money.
What?
http://www.gamespot.com/xbox360/action/halo3untitledodstgame/news.html?sid=6237794
Microsoft's game division has been turning a profit now for a couple of years. They make money on each console sold. They make quite a bit of money off of peripherals. And they have the highest attach rate in the industry. Care to revisit your "data"?
And how do you explain the Wii? How many has Nintendo sold? Something like 50 million + units. Nintendo has been making a sizable margin off of each Wii sold since the console was released.
Nintendo started selling the Wii at a profit from day one. You don't think Sony or Microsoft would rather be in Nintendo's shoes right now?
So first you say consoles *isn't* the way to go, but then you contradict that argument by pointing out that Nintendo makes money on each Wii sold, which *is* a console. Which one is it?
When Toyota decided it wanted to unseat GM as the world's market share leader, their quality took a dive and their brand has been tarnished. Bad move.
Says who? Show me an article where Toyota's reputation "took a dive". Their models have consistently still been ranked as among the most reliable by many different organizations (JD POwer, Consumer Reports, Car & Driver, etc.).
In fact, part of the whole reason for Toyota's success was that they've always had a good reputation for affordable and yet high-reliability vehicles. Has their customer satisfaction ratings taken hits at time? Sure. But so have Apple and others.
Making the pursuit of market share your singular driving strategy is a fool's errand.
Why? Microsoft's pursuit of having the largest marketshare of an OS seems to have paid off for them. Have there been problems with this? Of course. Windows has had numerous issues, Microsoft has faced numerous lawsuits and confronted other issues, but at the end of the day, people haven't seemed to mind, as the marketshare is still at over 92%.
And at the end of the day, most corporations and organizations still run Windows, and thus still end up purchasing Microsoft software. I don't think Microsoft's shareholders are sitting back, thinking "Damn, if only MS had not wanted to have so many corporations reliant on them, and instead focused on 10% of the market".
I discount the market share approach because it seems to be disastrous for most companies that attempt it.
It seems like you only "discount" it because it's not Apple's approach. Sorry, that's not how things work.
