Put simply, because you know I’m a simple guy, companies optimize profit margins by commanding premium prices and/or reducing cost of goods. Apple excels at both, which is not something that can be said for most other brands in the PC/Consumer Electronics space. And Apple doesn’t just have slightly better margins than their competition, they have way better margins. I remember reading once about how Apple manages their cost structure not just by taking cost out, but by being really smart about their supply chain. The example cited was when they introduced the Nano, which required a shitload more flash memory than previous iPods, so they went out and pre-paid like a billion dollars to secure memory and therefore eliminate what could have been a critical cost variable. Of course they could only do this because of the strength of their balance sheet. People always talk about virtuous circles in marketing, but Apple’s may be the most virtuous of all. It feeds off itself and continuously makes them increasingly insulated from competition. Their only real competition at this point seems to be the general state of the economy, not any of these crappy brands that nibble at their heels.

Now that you’ve turned me into a little Apple groupie like yourself, it may be inappropriate for me to ask this question, but when are you going re-name the blog “Cult of Mac II?” We need some diversity here. How about some good agency bashing posts?

Alas, my hesitation to move from the “dark side” and switch to a Mac is based entirely on cost/benefit ratio. I long for the day when Apple adjusts their pricing model just a tad. I suspect a slightly lower premium would easily push their market share into double digit territory. But for now, I have to give them all due credit for sticking to their model and reaping the benefits. In the end analysis, it’s all about profit. And clearly, they’ve got the right formula for making money! Thanks for reminding all those Marketing folks that there’s more to success than market share.