How Apple Is Profiting On Accessories For Mac

The main difference with the iPhone compared to the iPad is the cell phone contract and the subsidies that the networks pay to Apple for each handset. This obviously must account for a large proportion of the increased profit margin on iPhone models. Or, conversely, Apple is forced to lower margins on the iPad to get it under $500 for the base model, since there's no one subsidizing those sales. It will be very interesting to see how the alleged would fit into the profit margin percentage range. If Apple is willing to accept half the profit margin on current iPads as it does iPhones, how low could they go for a 7-inch iPad?

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IMore has previously heard $200 is the floor. If Apple is willing to take a short term drop in profit to ensure long term gains in market share, it certainly looks like there's room to blow the competition out of the water all together. And most importantly, unlike Google with the and Amazon with the, which are sold roughly at or below cost, Apple might still make money off the sales.

Love them or hate them, these are some really interesting information.

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In all the speculation that abounds on the Web about the possibilities of an Apple-designed tablet device that would compete with e-readers from Amazon, Barnes & Noble, and the like, I haven’t seen a whole lot of discussion about one of the great mysteries of the idea: who would sell the content for such a device? There are two likely answers to that question. Each has its own advantages and disadvantages. Let’s take them in turn.

Apple sells content It seems like many pundits are assuming that Apple is going to get into the business of selling books and newspapers and magazines just as it currently sells music and TV shows and movies. And it’s a possibility, given the existing iTunes infrastructure. In this scenario, Apple’s devices (presumably not just a theoretical tablet, but the iPhone, iPod touch, and even the Mac) would gain support for reading “printed” matter downloaded directly from iTunes. On the iPhone and iPod touch (and perhaps the tablet), that support would most likely come in the form of an Apple-created reading-focused app. On the Mac, who knows?

Perhaps an extension to iTunes or Preview, perhaps something new. Apple would need to create a new set of iTunes storefronts for books, magazines, and newspapers, and would need to sign deals with major publishers. Publishers would need to present their content to Apple in a compatible format, which could be easy or hard, depending on if Apple were to support a common format or create something completely new. Knowing Apple, it will probably want to support a slick reading experience unlike anything experienced before. That spells more work for publishers and more work for Apple, since the company would need to build the reader and the publishing specifications for such an experience. But it’s also possible that Apple will just embrace a format like PDF and move on, at which point things become much simpler.

Owners of subscription content, such as newspapers and magazines, would need to work with Apple so that they could sell content in year-long increments. The current iTunes TV Season Pass wouldn’t work for this, because nobody would want to pay for a year of The New York Times in July and receive access to every issue published since January—the expectation of a periodical subscription is that it begins with the current issue and runs for a length of time. (There’s a limited facility for subscriptions in the App Store, which could be adapted to work for publishers.) This scenario will happen if Apple decides it needs to control anything and everything in terms of content sales for its devices. Now, Apple’s a company with a big control-freak streak, so anything’s possible.

But I have to wonder if Apple really feels it’s necessary to staff up a whole new section of iTunes just to support book, magazine, and newspaper publishers. I’m not saying this scenario isn’t possible. I just think there’s a different one that I personally prefer. Ride the App Store Say what you will about the —the App Store is a huge hit with consumers.

One of the great things about the App Store is precisely relevant here: it takes a huge load off of Apple’s shoulders. The moment Apple allowed third-party apps on the iPhone, Apple was no longer the whipping boy for every complaint about little bits of missing functionality. Yes, some features the company reserved for itself, but most of the major issues could be solved by someone other than Apple building an app for that. Right now on the iPhone, there’s a vibrant market for traditionally printed content. There are gorgeous book readers such as. Other readers, such as and and, support commercial e-book formats. Support in-app purchase and viewing of comic books from publishers including Marvel.

Newspapers and magazines can customize and enrich their offerings by, or they can offer their content within a third-party app. This is why if Apple’s developing a new tablet device that will be (among other things) a compelling reading device, its best approach is to carry the App Store through to that device.

Rather than compete with Amazon and Barnes and Noble and all the rest, Apple can sit back and let them compete with one another while profiting from the popularity of its latest hit gadget. Why should Apple build its own comic-book reading app and set up a system for comic publishers to submit content, when it can just allow the existing comic-book readers to compete with one another while it sits back and rakes in the dough? The App Store has proven that Apple doesn’t need to provide content so long as it provides a system for publishers and developers to deliver content themselves.

How Apple Is Profiting On Accessories For Macbook

And let’s not forget, every publishing company has a mind of its own. Why should Apple work to create a format that’s broadly useful but causes publishers to grouse that it doesn’t have this feature or that feature? Let the publishers implement their e-reading apps as they see fit. And users should benefit, because an open market should drive innovation. There are several specifically because fierce competition has driven developers to create new and better interfaces. I would imagine that the comic-book reader apps will spend the next year bashing each others’ brains in, and the result should be a vastly better reading and buying experience than anything Apple would ever come up with. (Compare this to the world of Weather apps, for example.

There are a bunch of them out there, but none of them are that great. I suspect that one major reason for this is that Apple pre-installs a pretty, but mediocre, Weather app on every iPhone, which dramatically reduces demand.) When Apple wants to own it Here’s the only thing that gives me pause about that second scenario: What happens if Apple decides that a feature is so important, so fundamental to its products and how they’re judged (by both the media and consumers) that the company simply can’t leave it to chance? Exhibit A in this scenario is Safari, which Apple created because the Web-browsing experience on the Mac, exemplified by Microsoft Internet Explorer, was so terrible that it caused material harm to how people viewed the Mac as a product. But there are plenty of other examples in Apple’s history where it’s squashed a third-party opportunity because the company felt a feature was just too important to leave out of its control.

The addition of a voice-recorder app in the iPhone 3.0 software update would be a good recent example. So, what if reading simply is too important for Apple’s future, especially on a larger touchscreen device like the one that’s rumored to be on the horizon? If Apple felt that reading was just too big a deal to leave to others, it could decide to take over the entire experience. If Apple’s major sales pitch for this mythical device is that it’s a revolutionary reading tool that will see Apple change the world yet again, it’s awfully hard to imagine that Apple would want to leave the control of that revolution to a loose collection of third-party tools.

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There are plenty of rumors out there about publishers being contacted by Apple about creating content for a forthcoming product. (For the record, we haven’t spoken to Apple about this topic.

How Apple Is Profiting On Accessories For Macbook Pro

If we had, do you think I'd be writing this right now?) A lot of people have assumed that means that Apple’s setting up an iTunes bookstore and magazine rack, but I think it’s just as likely that Apple’s working with publishers to create reader apps and content demos to show off at the launch event for the product. But with Apple, you never know. Earlier I used an example of the fantastic innovation that’s happened in the Twitter app market on the iPhone. In my mind, Apple never needs to add Twitter integration into the core iPhone OS, because the third-party apps have done the job better and faster than Apple ever would. But if someone at Apple feels that the company needs to control Twitter on its device, it could stamp out that market in a hurry. So, if Apple is indeed fashioning a new device that some people might want to use to read things, what shape will it take?

Will we shortly be browsing content in the iTunes bookstore? Or will there be an app for that? I’m hoping for the latter, but I’m not at all convinced that’s what will happen.

Of course, until it does, we’re all just guessing. What do you think?