Source: Technology Review
Pocketing profits instead of investing in innovation is how market leaders turn into has-beens.
As golden geese go, it’s pretty hard to beat the iPhone. In the five years since Apple introduced the first model, the company has enjoyed booming sales and ever-increasing profit margins. Revenues this year will top $150 billion, six times what they were in 2007. Apple’s profit margin over the past nine months (the first three quarters in its 2012 fiscal year) was an astounding 28 percent, double its level in 2007.
But the real miracle is that Apple has kept growing, and widening its profit margins, even as it has been eclipsed by its biggest rival, Google’s Android system. In 2010, the two platforms were about even in terms of market share. But today Android held four times as much share as Apple. Read the rest of this entry »