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Why market share doesn’t matter


Interesting take on market share and profitability in this Forbes article by Darcy Travlos. As she points out, far too much emphasis is given to market share and sales numbers. Does it really matter if, say, iPad or iPhone sales are down in relation to the competition? The key fact is that for every iOS device, Apple carries money to the bank. This is profit before an app or book has been bought or an advertisement viewed. Even Google is gaining market share in the hope of future profits, while Amazon is blatantly admitting that it sells hardware at cost in return for the promise of future sales.

The article also notes the depressing performance of BlackBerry and Nokia in relation to the surge in Apple and Google:

At an initial pass, two trends in the past quarter are important to note before reading too much into the Apple versus Google battle. While Google gained 20.7% market share over the same period a year ago, Nokia and Research in Motion, together, lost 21.7%. Google’s gain may have more to do with Nokia’s and Research in Motion’s losses than a win against Apple. More importantly is that Apple iOS + Google’s Android operating systems run almost 85% of the mobile devices sold.

by Mike Evans, 26 November 2012