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The economics of the iPad or Apple TV are much more like the Wii was than the PS3/360. Apple makes about a 35% gross margin on all their hardware. Microsoft and Sony both barely break even or lose money on each console just to push software revenue.

So, those companies work incredibly hard just to break even in hopes of long term profits. A break even company is going to bleed themselves to death competing with a company selling popular products at a 35% gross margin.

At the end of the day it boils down to profits and Apple has so much profit and cash that if they have a good enough product, they can dominate a market in a profitable way that nobody else seems to be able to match.




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