After all, Windows powers most of the world’s personal computers, and Android powers most of the world’s mobile devices. Apple gets a notable share of each, yes, but the Mac, iPhone, and iPad maker gets a larger– much larger– share of the industry’s profits. Why? The answer is easier than you might think.
Apple has carved out a growing and profitable niche in the premium end of the spectrum; ostensibly where most of the profits live.
Why doesn’t marketshare translate into profit share? As it turns out, there are examples of why that doesn’t work in many different products.
Let me start with automobiles. Premium branding probably starts with these cars– BMW, Mercedes, Lexus, Infiniti, Cadillac, Audi, Acura, and many others.
What do those premium brands have in common? They are not sullied by low price, low cost models. All are premium. You won’t find a Lexus, BMW, Audi, Cadillac or other premium model competing with a Toyota Corolla or Honda Civic or Kia Rio or Hyundai Elantra.
Likewise, you won’t find a Corolla, Civic, Rio, or Elantra that competes with the aforementioned luxury vehicles. Why not? Brands do not easily span multiple spots on the product spectrum.
What about Windows, Android, HP and Samsung?
Guilty By Association
Samsung tried earnestly to compete with Apple at the premium end of the smartphone and tablet spectrum while it tried to compete with cheaper plastic knockoff products at the low end and mid-range of the product spectrum.
That does not work and the proof is everywhere.
Why not? Samsung smartphones and tablets are based on Android OS, and despite trying to use more expensive materials, and putting lipstick on the Android pig interface, one Android devices is as good as another, therefore, lower priced products are more attractive to the masses. Android is associated with cheaper, inexpensive products, not products at the premium end of the spectrum.
It works the same with Windows products; rather, hardware running Windows. Windows is available on inexpensive HP PCs priced from nearly free to a few hundred dollars. Hardware specifications vary, of course, but the masses use hardware to run Windows and Windows apps, therefore, lower cost products rule. It’s guilt by association again. Windows is associated with cheaper, inexpensive products, not products at the premium end of the spectrum.
Windows, like Android OS, is commonly associated with the low end of the product spectrum, not the high end which is dominated by Apple products. Why buy an expensive $1,500 PC notebook running Windows when a $200 notebook does mostly the same thing? Likewise, why buy a $650 smartphone or $500 tablet running Android OS, when a $100 smartphone or $100 tablet does mostly the same thing.
Apple does not have that problem because– like Cadillac, BMW, Lexus, Audi, Infiniti, Acura, Mercedes– Apple maintains itself as a premium brand, fully differentiated from the riffraff of pedestrian products running Windows or Android OS.