Newsletter Issue #899: Learning From Old Apple Critic Nonsense

February 20th, 2017

Over the years, Apple’s critics have been busy claiming that the company should do this, that and the other thing. When the requests — or demands — aren’t acknowledged, or are shown to lack logic, they are just repeated ad infinitum. In fact, you hear the stories so often that you wonder whether they are just copying from one another, or living in a vacuum.

A common complaint is that Apple needs to bite the bullet and cut prices. How dare they make big profits from the sale of their gear? Wouldn’t they sell more units if they just sacrificed some profit?

I suppose they would, to some degree. But would sales increase enough to compensate for the loss of profits? I suspect not, because other tech companies are not nearly as profitable with hardware. Apple earns more than 90% of the profits in the smartphone industry, and Samsung receives most of the rest. That means that loads of smartphones, many sold at lower prices than the iPhone, aren’t generating profits for their manufacturers. You wonder why they are even making those things, since a company lives and dies by cash flow and profit.

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