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Comment by jordanb | Hacker News Reader

PC margins have always been razor thin and Mac margins have always been better. PCs have always been commodity, that's the whole point. People used to refer to them as "beige boxes."

After his return, Jobs managed to turn Macs into fashion accessories, first with the iMac. This put the Mac into a category where it wasn't competing directly with PCs, where it's been ever sense.

But let's not kid ourselves. Apple lost the battle for the desktop computer in the 80s, and it never regained it. Jobs returned Apple to profitability by giving up on that market and positioned the company into a new one.

One difference that the OP failed to mention, between desktop computers and cellphones, is that cellphones are worn and therefore have always had an element of fashion to them. It's unlikely that cellphones will ever be "beige boxified" since there's no customer that sees them as being purely utilitarian and will ignore physical aesthetics.

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no customer that sees them as being purely utilitarian and will ignore physical aesthetics.

Except for, you know, about 3 billion customers in Asia and Africa who cannot pay a premium for aesthetics but whom cheap dumbphones first allowed to communicate outside their immediate surroundings (no landlines there), and whom cheap Android smartphonse are now (or in the near future) first allowing to access the internet.

Invalid because those cheap dumb phones also compete on aesthetics.

The choice isn't between cheap and expensive iPhones.

The choice is between cheap and cheap. Or phones in particular price ranges which compete on features and aesthetics.

So where's Apple's offering in the sub-$50 range?

I don't know whether you're serious, but iPhone 3GS is $1 on AT&T (on-contract, I know.).

In places like Africa you buy phones from a stall in a market square. No contracts, because they're not enforceable.

I think the only credible (and very real[1]) competitor to low-spec Android handsets is Windows Phone, which with the Tango update will run on really low-spec hardware. Nokia is playing a solid game here.

[1] Real because Nokia rule the feature-phone market, not so much in Asia but very much in Africa. Nokia have a reputation for quality there that Android, as the new kid on the block, will have a hard time displacing.

Which part of 'on-contract' you didn't understand? The full phone price is in the price of contract with interest.

Of course you can buy sub-$50 phones on contract too, in which case the monthly payment would be much lower than AT&T's $99 iPhone plan, of which about half goes towards the phone payment.

Are these people in the third world putting their credit card into an app store and buying software? How do cheap android devices in third world countries validate android as a developer platform in the long run?

I'm not trying to be snarky here btw, legitimate questions.

Eventually they will buy software and services that provide value to them, which can be things for which first-world countries have an existing infrastructure, but which have so far been completely unavailable to these people.

For example, in parts of Africa, transferrable pre-paid phone credit has become a de facto bank acount for many people who've never had access to non-cash transactions.

Other examples: third-world countries have many subsistence farmers. Accurate local weather forecasts and information about current market prices in neighboring towns could be very valuable to them.

As for payment - credit cards may not play a huge role, but centralized app stores can easily support a diverse range of nation-specific payment options (like the phone credit mentioned above).

This is simply incorrect.

http://www.asymco.com/2012/02/28/the-value-of-the-os-x-monop...

Are you seriously describing the company making 3 times as much profit as their nearest competitor and consistently outgrowing them all for more than 20 straight quarters as "giving up on the market"?

What percent of Apple's shipments are desktops?

30% by revenue. This compares to 36% for HP, and so is immaterial.

Apple's desktop sales are growing at 4% year over year. Compared to HP's which are declining

there's no customer that sees them as being purely utilitarian and will ignore physical aesthetics

Don't project yourself and your circle of friends onto everyone who carries a cell phone.

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