Apple’s Margins and Cars

Apple’s Margins and Cars→

Woukd Apple be crazy to enter the “low margin” car industry? Maybe, bit not because of margins:

“The misperception here is that Apple earns high margins because Apple operates in high margin industries. The truth is precisely the opposite. Apple earns high margins because it is efficient at manufacturing and firmly committed to a business strategy of sacrificing market share to maintain pricing power. If Apple makes a car, it will be a high margin car because Apple only makes high margin products. If it succeeds it will succeed for the same reason iPhones and iPads and Macs succeed — people like them and are willing to buy them, even though you could get similar specs for less.

Phones and PCs are low-margin businesses.

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