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Originally Posted by afv011
High margins are not sustainable. You can charge a premium if you are first to market or you have features that nobody else has, but competition catches up sooner or later and your margins are going to shrink. If you don't have market share, your revenue will go down.
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Yes, you've got to keep finding different markets to be first/featureful into.
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Interestingly, Dediu finds that the iPhone’s average selling price (ASP) has remained constant in the low-to-mid $600 range while the iPad’s ASP has fallen more dramatically over the past year from $531 to $449. The big difference, Dediu says, is that the cost of iPhone components has increased by around 29% over the past year, which has helped cut iPhone gross margins from 58% to 48%.
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A lowered ASP for the iPad could also have something to do with introducing the cheaper iPad Mini?