Apple’s products will likely never have the top market share for very long, especially in a world where low-cost Android vendors can pop out super-cheap smartphones and tablets and sell them close to zero margins. Apple knows this all too well which is why it doesn’t particularly care much about what its market share is. What does Apple care about, then? Per AppleInsider, Needham & Co analyst Charlie Wolf writes in a research note that Apple would much rather have a smaller, more engaged user base that will deliver more revenue to app developers than a larger user base that doesn’t use their devices as much and that delivers less revenue to developers.
“Observers, seduced by the simplicity of the metric, have elevated market share as the sole driver of financial performance to a position that far exceeds reality,” Wolf writes. “Indeed, there appears to be no correlation between market share and the viability of a platform. In surveying the variables that determine the viability of a platform, we would argue that the breadth and depth of the platform’s application library and ecosystem play a far more important role than does market share.”
This isn’t to say that market share is all together unimportant, of course, it’s more that it matters less if you can offset it by having a dedicated user base and a rich app ecosystem. As long as Apple can keep iPhone users loyal and engaged with the platform, then it doesn’t have to worry much about developers abandoning it for Android or other platforms.
