

Apple is making a handsome profit on its new phone








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RE: Is Apple different than MS
By omnicronx on 6/25/2009 12:30:49 PM , Rating: 2
I disagree. Companies should study the demand for their product at various price points and pick the price point that maximizes overall profit. That's "Business 101" and any company with outside shareholders not doing that should have their management fired.
Now if only it were so clear cut. Business 101 would also teach you that if these maximized profits are not sustainable, then you could easily end up in a far worse position down the line.. Just ask GM..

RE: Is Apple different than MS
By TomZ on 6/25/2009 12:54:29 PM , Rating: 2
I don't see any risk in profits that are "not sustainable," so long as you manage your overhead costs so that you can cut prices in the future when/if competition requires it. I think Apple is perfectly positioned in that sense.

GM is an entirely different situation, since they had high labor costs forced upon them by the unions back when they had a monopoly. I don't see Apple doing the same. Apple's labor is a small part of their costs for their hardware, as it's all built overseas with cheap labor.

RE: Is Apple different than MS
By omnicronx on 6/25/2009 1:16:46 PM , Rating: 2
That was pretty much the point I was trying to get across, I was not trying to take anything away from Apple and their business strategy, nor was I trying to directly compare them to the crappy management of GM.

One thing I would like to mention though, the cell phone industry is not the PC industry, if Apple treats it as such they could be in for a big surprise. I think they will soon be forced to diversify into more than a single line or people will get bored.

