BUT there is lots of precedent for markets where the competitor comes in undercuts on price, sometimes at a loss to gain marketshare...and then when the competition retreats starts to make money from position of market share strength.
@eewiz- OK, that's a good point. But even their lower cost iPads and iPods are pretty expensive compared to the many $200 tablets and music players like Sandisk's Sansa, which can cost as little as $30.
The thing about looking at the smartphone maket in terms of units is a good part of the current growth is simply from vendors making traditional "feature" phones that now have enough features to be called smartphones. While this is great for increasing units, it doesn't help so much with revenue or profit as these phones are inexpensive and have very low margins.
While Samsung sold 80% more Smartphones than Apple last quarter, they only generate 3% more revneue from Smartphone sales and Apple ended up with 40% more profit. According to Strategy Analytics Apple ended up with 57% of all Profits from Smartphone sales....with a unit share of 17%.
I think Apple has already lost much of its "cool factor." (Its stock certainly has.) However it has a powerful ecosystem, and - like Microsoft in its day - this can continue to be a compelling advantage over competing platforms.
While I'm quite excited in general about the possibilities of wearable devices going forward, like Peter I'm somewhat skeptical of the iWatch (at least as a "watch" product per se). (I happened to watch a financial program this weekend where one of the recommended stocks was that of a watch company (Swatch), and my reaction - as far as the idea of adding it to my own investing watchlist - was "I'll pass on this one.")
But Cook was an operations guy and I think that this is why some people worry on Apple's behalf that maybe it has lost the visionary self-belief that it had under Steve Jobs.
One example was that Steve Jobs said Apple would not compete at the smaller tablet size because it was important that Apple do few things very well and remain differentiated and easily identifed as premium.
As I remember it almost immediately on taking over Cook ok-ed the launch of the iPad Mini to compete against Samsung and others.
It always takes time for a brand's coolness to wear off. And how long may depend on the particular market and how marketing is conducted.
In fact there are well known trajectories and timetables for taking brands in at the top with low volume and premium price and then gradually move down market hitting higher volumes at thinner margins...
I believe the sports shoe makers have this down to a fine art. But they also understand that as they move a particular model from cool and expensive and then make it affordable by the masses...they leave room at top for the next premium model.