johnsonwax
Ars Legatus Legionis
Right. Over in the BF in a discussion of the value of marketshare as a measure of dominance, I argued that a platform is dominant if it forces competitors to respond to them, more than they need to respond to competitors. And marketshare is so unimportant as a metric that if at any point since 1997, you had looked at Apple and their competitors and invested based on who had the most marketshare, you'd have bought a bit in the iPod era (but still rejected Apple due to Mac share to others), and some in the Watch era (and rejected Apple due to Mac, phone, tablet share). You'd have bought a lot of Nokia and HP. You'd have lost a lot of money.That's kind of the baffling thing in all this… because the limitations are very clear — Apple has little to no interest in growing market share into the "makes no money" segment of the market which, at this point, is all that's left, because Apple is hoovering up all the money in the profitable bit of every market in which they choose to compete. Is the stock market betting on Apple aggressively moving into low-margin, low-profit market segments? They certainly haven't been paying the slightest attention to Apple's strategy for multiple decades if that's what they think…
Apple has always had a strategy of starving competitors of margin. What you can invest in competing - R&D, etc. comes from what you have left after covering COGS and overhead. The low-end of every market is also the low margin end of the market. You might beat Apple on revenue, but after you've covered COGS and overhead, you have relatively little money left, so your ability to out-engineer Apple keeps shrinking. If you find yourself behind them, you kind of need a eureka moment that delivers disproportionate value, and those are exceedingly rare. If you are a retail chain, then kind of who gives a shit. If you are a technology company, that's your ability to compete.
Apple's market cap increased ~10x more on Friday than the company was worth when I first invested in it. I thought it was a safe buy in early July '97 - company was trading below its liquidation value on rumors that Steve sold his last shares in June, which was confirmed in August. But there were rumors Amelio was going to be out and Jobs in. In Sept he was announced as iCEO. Had no idea they'd wind up here.