High end eReader saves Apple - well almost.

[Greg Anos]

Originally Posted by HarryT

Are you suggesting that Apple's business strategy is a failure? If so, I must respectfully disagree. They still have the lion's share of the premium smartphone and tablet markets, and that's where the real profit is, not the bottom end of the market. How many zillions do they have as cash in the bank?

I'm suggesting that it is unsustainable in the long term. Historically, today's top end is tomorrow's middle end and day after tomorrow's low end. What ever "walled garden" you are in is the garden you tend to stay in, as the change over cost is too high. That was what Microsoft lived off of for decades. It's the zillions of low-end buyers who are not going into the Apple "walled garden", going into the android "walled garden" instead. They aren't going to pitch out their built-up environment just because they could later afford an iPhone...

[pl001]

Originally Posted by Ralph Sir Edward

What ever "walled garden" you are in is the garden you tend to stay in, as the change over cost is too high. That was what Microsoft lived off of for decades.

This is true to a point. That is what Microsoft lived off of, but it was not really "walled" like current ecosystems, it was simply the result of all the programs being writen for it. Microsoft wasn't controlling what you could put on it, just as Google is not with Android today. In the meantime they built up other areas of the company and now have 16 Billion+ dollar businesses. Without that they may not have survived their recent blunders. Yet they continue to be quite profitable and successful as a whole, and have all the pieces in place to stay strong for some time to come.

Apple is not building up other areas of business to any serious extent. They are remarkably undiversified for such a large company. They continue to rely almost exclusively on the rather fickle and unstable consumer electronics market, and do so while offering a very limited portfolio of hardware. It's a high-risk business plan.

[pwalker8]

Originally Posted by pl001

This is true to a point. That is what Microsoft lived off of, but it was not really "walled" like current ecosystems, it was simply the result of all the programs being writen for it. Microsoft wasn't controlling what you could put on it, just as Google is not with Android today. In the meantime they built up other areas of the company and now have 16 Billion+ dollar businesses. Without that they may not have survived their recent blunders. Yet they continue to be quite profitable and successful as a whole, and have all the pieces in place to stay strong for some time to come.

Apple is not building up other areas of business to any serious extent. They are remarkably undiversified for such a large company. They continue to rely almost exclusively on the rather fickle and unstable consumer electronics market, and do so while offering a very limited portfolio of hardware. It's a high-risk business plan.

That's a good point. Apple's product line is the macs, iPhone, iTouch, iPad, AppleTV and a few accessories. I believe that the majority of their revenue comes from the iPhone (56.43 %) and iPad(19.91 %). One might make the same point about Microsoft and Google, of course.

[Penforhire]

Normally I would agree it is a high-risk strategy but how many years do they have to murder the competition on profitability before we admit it succeeded on a vast scale? The iPod was introduced in 2001. Between '03 and '06 its stock value increased by over 10x Their App store opened in '08. Etcetera.

It seems really hard to throw stones at their financial track record since the iPod. Will it continue indefinitely? No way. Every empire is dust in the wind eventually. Will they shrivel up and blow away this year? Not a chance.

[HarryT]

Originally Posted by Penforhire

It seems really hard to throw stones at their financial track record since the iPod. Will it continue indefinitely? No way. Every empire is dust in the wind eventually. Will they shrivel up and blow away this year? Not a chance.

with $100bn+ (considerably "+") in the bank, they could afford to make a loss for decades. Has Apple ever made a loss in recent times?

[pwalker8]

Depends on what you mean by recent times. Right about the time they dumped the Pepsi salesman and brought back Jobs, Microsoft pumped some money into Apple to keep them a float. I could be wrong on the exact timing though. I seem to recall reading that Microsoft wanted to make sure there was some competition out there for anti-trust purposes.

[Greg Anos]

Originally Posted by pwalker8

Depends on what you mean by recent times. Right about the time they dumped the Pepsi salesman and brought back Jobs, Microsoft pumped some money into Apple to keep them a float. I could be wrong on the exact timing though. I seem to recall reading that Microsoft wanted to make sure there was some competition out there for anti-trust purposes.

Your timing is correct. Microsoft decided it was better to spend money to keep Apple afloat than to go to court over an anti-trust case....

[frahse]

Originally Posted by HarryT

with $100bn+ (considerably "+") in the bank, they could afford to make a loss for decades. Has Apple ever made a loss in recent times?

"$158 Billion" minus of course the $14 Billion they are using to buy back stock and raise the share price.