'The critical juncture', did Apple take the wrong turn?

[TC03]

Steve Jobs wasn't all about niche products only, he cared about market share too (like everyone should, not just Steve).

If that’s so, then why is the Mac market share, even after Apple’s recent revival, sputtering at a measly 5 percent? Jobs has a theory about that, too. Once a company devises a great product, he says, it has a monopoly in that realm, and concentrates less on innovation than protecting its turf. “The Mac user interface was a 10-year monopoly,” says Jobs. “Who ended up running the company? Sales guys. At the critical juncture in the late ’80s, when they should have gone for market share, they went for profits. They made obscene profits for several years. And their products became mediocre. And then their monopoly ended with Windows 95. They behaved like a monopoly, and it came back to bite them, which always happens.”

The 5C is going for profits, not market share. However, it is more important than ever to go for market share. Allow me to quote this article:

If total Android engagement moves decisively above iOS, the fact that iOS will remain big will be beside the point – it will move from first to first-equal and then perhaps second place on the roadmap. And given the sales trajectories, that could start to happen in 2014. If you have 5-6x the users and a quarter of the engagement, you're still a more attractive market.

Android engagement may move above iOS if market share slips away further. When the Play Store will be favored over the AppStore, the ecosystem comes into deep trouble.

Either Apple has enormous trust in their ecosystem above Android or Apple thinks the 5C will sell just as well the 5 last year with 5S sales being 'additive'. However, I think both strategies are very risky.

 

[drew0020]

Steve Jobs wasn't all about niche products only, he cared about market share too (like everyone should, not just Steve).The 5C is going for profits, not market share. However, it is more important than ever to go for market share. Allow me to quote this article: Android engagement may move above iOS if market share slips away further.

Either Apple has enormous trust in their ecosystem above Android or Apple thinks the 5C will sell just as well the 5, but I think both strategies are very risky.

I'm not sure what Apple is doing either, but I do think they will sell a lot of 5C's at a higher gm than the previous iphone 5. It makes sense from a business perspective, but I feel that the 5S has more competition than ever before plus while I appreciate iOS7, it feels like more of a skin on an aging operating system then an O/S overhaul. I don't think Samsung was in the same competitve position when the 4S was released.

I am curious to see how this all plays out for those of us who care about the 'business' aspect of the releases.

 

[spicynujac]

Apple will continue to lose market share, because Android offers an almost-as-good product at much cheaper prices. Of course Apple should have gone for market share and not profits (as if they dont have enough billions!) with a cheap or even mid level phone. What is the risk to them of doing so? Some say it would cannibalize iphone 5S sales. Well, perhaps to a degree, but Apple has already built a market of people who are willing to pay premium prices for its top of the line technology. These people are current iphone users.

The target should be the billions of non-iphone users out there. They would love an iphone if it was priced more affordably. This is easily feasible. Take the ipod touch at $230, throw in the $130 cellular module (this is the retail price from the ipad/mini) and you have a $360 phone. Hell, sell it for $400 "just because you can", Apple has always had a huge premium on phones versus its other products, but $550 is insane. Apple is missing the big picture--sure you can make a huge 50% profit margin off selling this guy a phone once--but think how much you can make selling 5 guys cheaper phones and then all the money they can earn over the years in itunes and the app store which costs almost nothing to run on a per user basis? Amazon understands this strategy. Apple does not. It's funny because they were successful with it in other arenas--Mac mini, ipod nano, etc.

 

[makotoisle]

Didn't everybody say the same thing about the iPad mini? Omg, I can't believe they priced it at $329!! That's way too high, Apple really blew it and now Android is going to take over?

 

[cmanbrazil]

Seems like market share hasn't helped microsoft. It killed their innovation as well.

 

[TSX]

Apple is a year ahead in there development. This is the year they needed a bigger screen iPhone (bigger than the 5) but due to them being ahead in planning it couldn't happen seeing as the 5S is last year prototype. So hopefully the larger/wider screen prototypes were hearing about will make the iPhone 6 better.

 

[JaySoul]

I completely agree with the OP.

There is a difference between money in the bank and market share. Right now, Apple is simply repeating the Windows saga - except this time with added profitability.

I fully respect hoarding that much cash - what I don't appreciate is increasing prices year on year.

The stock price is down, and their market share will stagnate, just watch.

 

[atlatnesiti]

AAPL stock down by 6% already...