Apple’s Potential Achille’s Heel

Apple has a massively larger share of total smartphone profits versus its share of smartphone units.  If/when the competition is successful in creating attractive enough alternatives, price competition may become more important, with a necessary compression of the Apple profit margin.  Profit margin erosion is probably a greater risk than a reduction in unit sale growth.

This chart shows the disparity between units market share and profits market share.

data source: Business Insider

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