Can Dominant Profit be Considered a Monopoly

[Labeno]

Disclosure: I'm a fan of most Apple products and love their privacy/virus-free based ecosystem, so I don't want to see them go away.

The news has been hot with Apple being a perceived monopoly, and it just seems dumb since they have significantly less than 50% of the market in any product category... so why is "Apple" & "monopoly" even in the same sentence? I think I have a possible answer...

Hypothetical question using an extreme to make the better point:
If a company A had %1 of the market but got 99% of the industry's profit, and company B had 99% of the market but only %1 of the industry's profit, which company would you consider a monopoly?

Anyone have a good answer?

 

[Abazigal]

Disclosure: I'm a fan of most Apple products and love their privacy/virus-free based ecosystem, so I don't want to see them go away.

The news has been hot with Apple being a perceived monopoly, and it just seems dumb since they have significantly less than 50% of the market in any product category... so why is "Apple" & "monopoly" even in the same sentence? I think I have a possible answer...

Hypothetical question using an extreme to make the better point:
If a company A had %1 of the market but got 99% of the industry's profit, and company B had 99% of the market but only %1 of the industry's profit, which company would you consider a monopoly?

Anyone have a good answer?

It would depend on how the first company for 99% of the profits with 1% market share.

In the case of Apple, it’s a combination of selling great products that users are willing to pay a premium for, coupled with intense competition on the android side essentially driving margins down to zero.

The term you are probably looking for is “aggregator”. These entities own the demand (usually by offering a superior user experience), which they then use to control supply.

In Apple’s case, Apple has aggregated the best customers by virtue of the iPhone, which they then use to extract rent from suppliers (such as the 30% tax from developers), because Apple knows that they will jump through whatever hoops are placed in front of them in order to reach Apple customers who tend to have more disposable income and a higher propensity to spend.

So to answer your question, Apple (together with other companies like Amazon and google) is a new breed of monopoly which doesn’t fall under existing monopoly rules because no matter what you do, people will still seek them out because that’s how they got to be so big in the first place.

 

[rhett7660]

Wouldn't this have been the case with big oil and petroleum? There are a few companies in that arena that have rather large margins of profit compared to the company that comes in second.