Apple's Basic Strategic Problem: Market Share Or Profit Margin?
An interesting little piece of data that highlights Apple's basic business conundrum. Should they be going for market share or should they instead be looking at maintaining profit margins? Obviously, either strategy would be aimed at maximising long term shareholder value. But what actually is the right answer to the question? Why it's important is here: In a research note released today, Nielsen examines the potential for smartphone growth in the BRIC region (Brazil, Russia, India, China), where, in many cases, feature phones still dominate. According to the firm’s findings, only in China are smartphones predominant, where they’re now owned by two-thirds of mobile subscribers, as of the first half of 2012. However, in India, Russia and Brazil, users are only beginning to transition away from feature phones to newer, app-capable devices. So we've two to three billion people about to go through the transition from feature phones to smartphones. Sorry, deduct the number that already have them: some very large number of people. This transition is pretty much what we've all gone through over the past 5 years or so here in the richer countries.