Apple Makes a Profit on Its Products, Spooks Investors

When I went to Reuters last night, I saw this headline: High iPhone price spooks investors, Apple shares drop. Another way to rewrite this headline would be: "Apple makes money off selling iPhones for a profit". Outside of Samsung and Apple, no one in the mobile industry is making money. Why is that? Everyone else sells cheap phones for razor thin margins.

Remember these headlines?

Five reasons why an Apple netbook is a no-brainer

Should Apple make a netbook? If Tim Cook wants to be its CEO, yes

Analysts have been calling for Apple to make cheap laptops/netbooks for many years now. What happened to that market? Apple took the high end market and the low end has been gobbled up by companies making razor thin margins. Apple would rather not sell a product than sell one for no money.

Tim Cook:

For us, winning has never been about making the most. Arguably we make the best PC, we don't make the most. We make the best music player, we wound up making the most. We make the best tablet, we make the most. We make the best phone, we don't make the most phones.

I think Apple has done a good job over the years of proving that its strategy on product pricing is correct. I say we let Apple worry about pricing its products and we can vote with our wallets. It's funny how selling a product for a profit seems to be so foreign to so many investors.