9to5Mac reported that a UBS analyst says Apple is an 'anti-fragile monopoly' because of its iPhone pricing power. That is laughable. The Macalope said it best “Rejected headline: “Prominent UBS Analyst May Not Know What A Monopoly Is.
According to Steve Milunovich of UBS,, since Apple enjoys unparalleled pricing power, that must mean that Apple could be in a monopoly status that could make them resistant to failure. That’s like saying if you happen to be sitting next to Scarlett Johansson on an airplane, that you may actually be married.
A true monopoly arises out of one of two conditions. An extreme cost advantage which allows them to undercut everyone else or anti-competitive behavior. The problem with his theory is that Apple’s iPhone isn’t undercutting anyone. By virtue of their choice in material design, Apple ensured that the iPhone would cost more than most smartphones. In fact, it’s one of the most expensive phones on the market.
And Apple doesn’t get any special treatment from governments enforcing anti-competitive protection. If anything, they are constantly under attack by all governments on any number of fronts. Simultaneously.
It’s true that Apple does enjoy unprecedented pricing power for their products. But that’s a testament to Apple’s focus on design and quality over price. A low price doesn’t necessarily instill positive customer satisfaction. Neither do flashy features that customers will probably never use.
Apple isn’t perfect but they don’t need to be. They just need to be better than their competition.
A true monopoly arises out of one of two conditions. An extreme cost advantage which allows them to undercut everyone else or anti-competitive behavior. The problem with his theory is that Apple’s iPhone isn’t undercutting anyone. By virtue of their choice in material design, Apple ensured that the iPhone would cost more than most smartphones. In fact, it’s one of the most expensive phones on the market.
And Apple doesn’t get any special treatment from governments enforcing anti-competitive protection. If anything, they are constantly under attack by all governments on any number of fronts. Simultaneously.
It’s true that Apple does enjoy unprecedented pricing power for their products. But that’s a testament to Apple’s focus on design and quality over price. A low price doesn’t necessarily instill positive customer satisfaction. Neither do flashy features that customers will probably never use.
Apple isn’t perfect but they don’t need to be. They just need to be better than their competition.
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