This is from a article that Karen Coulter posted a while ago.
Business Models
Apple?s business model is straightforward: It aims to make the best products in the world by designing hardware, software, and services in tandem. Because Apple?s products are meaningfully different than those of its competitors, the company can charge a premium for them, which it invests into making better products. These new products are then sold at a premium, and the company then takes some of that premium to design the next generation of products. It?s a self-perpetuating cycle: The premiums from one generation of products funds the development of the next.
Over the last decade, Apple has learned how to manufacture complex products with incredible fit and finish at a scale that?s unprecedented in human history. Apple manufactured 34,000 iPhones per hour last quarter, yet iPhones feel nice in a way that few objects, manufactured at any scale, do. This is because of the way they?re made and because of the materials they?re made with.
Apple invests in manufacturing innovation and uses premium materials because its goal is to make the best phone in the world, and the nicer your iPhone feels, the better it is. Android OEMs, on the other hand, either don?t make enough money to invest in manufacturing and materials the way Apple does, or they don?t see a return that justifies the investment. iPhones are nicer than Android phones because of Apple?s business model.
http://mattrichman.net/post/115307513943/wallets-business-models-and-the-coming
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