Apple — famed for its engineering and marketing — is less renowned for its innovative business models. Historically that wasn’t a problem; the company sold high volumes of a small number of products that were ingeniously engineered but not very expensive to build. It managed to do this at a high margin, enabling its iPhone to grasp over 50% of the profits in the entire mobile handset industry.
Yet this model is highly dependent on two factors: 1) the iPhone, which makes owning the full suite of Apple products much more appealing and 2) big subsidies from mobile carriers that make the iPhone price-competitive with Android and Windows offerings. A French upstart is starting to break that model, with dramatic results. Read more in my piece for Forbes.
Story by Steve Wunker.
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