I'm not sure if this is /s or not....
Profits generally are not nearly as important as they're being out to be made. it'sall about context.
for an end user, how much profit the company makes as a whole is very very unimportant. All that matters is "was there profit". Why? Because it ensures that the company will likely continue to support that product in the future.
However from an end user perspective, a company making 100b profit, or 20m profit is ultimately not all that important. As long as, as I said above, the company goes on to support those products. For some reason, there's this modern equation that people are doing that higher profit = better company. But this is not correlated. We wouldn't exactly say Nsync/Backstreet boys were the pinacle of musical talent, despite massively succesfull from a financial situation. High profit may also indicate a company is willingly sacrificing on build, quality, and other aspects in order to push for those higher numbers. Samsung for example, given similar ASP makes significantly less profit because their costs tend to be more due to more "gimmicks" thrown at it (which costs more to include)
Market share in particular is an interesting thing to pay attention to "sometimes". it's also not all ti's made out to be, however, depending on the overall market can be a more reasonable borometer than profit of a companies willingness to support long term. But it's also not everything. Market share is relevant when you're looking for external support outside of the initial vendor. For example, if apple started dropping down to 5-10% marketshare? You can expect that developers, 3rd party accesories and other "ecosystem" stuff dissapears as the market may not be seen as big enough to warrant the expenditures (Windows Phone/ BBOS10 are eamples of this)
overall, Profit and Marketshare is a balancing act. Right now, Apple seems content with trading Market Share for profits. whether or not that's a long term winning strategy? Lets just watch and find out. Apple is a wonderful case study to study if you're interested in business administration
But to claim that the only thing that matters is profits is shortsited and bad business leadership
Good post. I agree with much of what you say here.
In regards to profits, it is important, especially as these companies get larger and larger.
A company like Apple will not dedicate resource to a project or product if it doesn't think it will generate enough profit to matter. Product like the mythical iPhoneSE2 would likely make a profit, however, the market is likely to be so small as to not warrant any attention from Apple, much to the dismay of consumers that want a smaller iPhone.
If a product or service does not project to make acceptable profits, Apple won't do it. Unless there are other strategic reasons other than profit that fall into the win column for a particular product.
Look at the MacPro (and the Mac in general) and Pro software. Too small of a market for Apple to care about, so they're letting it whither on the vine.
Switching topics. About marketshare. I agree, it's important, but mostly in the context of growing (or at least maintaining) an active user base. While not a good sign, a shrinking market share isn't necessarily a big deal ... as long as some of these reasons are true.
1. Folks that aren't buying iPhones are just holding onto their current iPhones. This is neutral to the active user base.
2. iPhone unit sales are increasing, just not as much as the overall market. This would imply a growing user base ... also, it's now shown that iPhone sales have dropped this last quarter.
3. Folks are actively switching from Android to iPhone at the same rate that iPhone users are holding off on upgrading. This would be neutral for increasing market share, but positive for growing the base.
One last point. Market share is very fickle because it's generally measured on a quarter-by-quarter basis. Sometimes, it's measured on a month-to-month basis. So a drop in market share this quarter can easily be offset by a growth in market share the following quarter. Active user base takes much longer to affect.
