How the ‘Value Trap’ Squeezes Windows PC Makers’ Revenues and Profits

Charles Arthur:

And how profitable are Macs on their own, even without that revenue stream? Apple doesn’t break out the figure for Mac profitability. But Horace Dediu of the Asymco consultancy reckons there’s a good-enough rule of thumb: assume that Macs have an 18.9% profit margin, which fits well enough with its historical operating margins.

That metric gives a hardware per-PC profit which has dropped from $241 to $232 — an erosion, certainly, but a margin that Windows PC makers would kill for: it’s more than 10 times greater than their per-PC profit.

Keep this in mind the next time you see someone say Apple “lost the PC war”, and risks repeating that same “mistake” with the iPhone and iPad.

Thursday, 6 February 2014