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Peter said in September 23rd, 2010 at 7:09 pm    

Well, I think you’ve started off with a flawed assumption in your attempts to bash Android.

Nokia doesn’t make an Android phone. LG makes two Android phones. Samsung makes more. But the lions share of their sales come from non-smart phones, which are low margin phones.

So, in other words, low-margin phones sell more than high-margin phones. I have but one word for this: “Duh.”

If you wanted to do your comparison, you should compare the revenue that LG, Samsung, HTC, and Motorola are making from their Android phones and compare that to the iPhone. I’d bet the iPhone makes Apple more, which brings up the next question.

“As a consumer, why do I care?”

I mean, sure, as an investor, I’d care quite a bit. But as a consumer, why do I care how much money Apple made off of me. When you go buy a car, do you care how much Ford, Honda, Toyota, Hyundai, or whoever made? You might care how much the dealer made, but generally you want this number to be as low as possible.

If I crowed that I paid more for my Toyota than you paid for your comparable Honda, you’d think I was insane. “Look at me! I paid 7% more than you! Isn’t that great!?”

Synthmeister said in September 23rd, 2010 at 7:40 pm    

But the car analogy falls down because comparable Android phones cost as much or more than the iPhone, yet Apple is earning a lot more money per phone. Eventually, that will spell trouble for the Android OEMs as they whittle their profits margins down lower and lower, while Apple–because of its economies of scale and narrow product lineup–continues to match prices, yet still keeps its 30% to 40% margins. Just look at all the high profile iPad competitors. They cost as much or more than the iPad and/or they require an onerous two year telco contract. Meanwhile, Apple is ignoring the telcos and already unloading wifi iPads in China. That was NOT supposed to happen.

And yes, Apple doesn’t compete in the dumb phone war, where there is no money. I would prefer charts that focus on what’s happening in the smart phone segment alone.

What the charts show, is that selling 100 million dumb phones isn’t necessarily a great long term business plan for Nokia, LG and Samsung. They’re selling more and more phones and making less and less money, because Apple is sucking the profits out of the cell market through the high end smart phones and letting Android/Nokia/RIM beat each other’s brains out over the low end.

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