Horace Dediu at Asymco continues to write some of the most insightful smartphone market posts around. One of the more insightful posts has been his recurring series on revenues and profits in the space. His most recent update: Apple controls 28% of revenues and 66% of profits. Google, by some accounts, is now approaching 50% market share.
But here’s the problem and the thing that has me thinking: if Android vendors are all driven out of business because they can’t make a profit then how does Google maintain its Android market share? Does having market share mean that eventually you will make a profit? Or does making the majority of profits mean that other companies starve to death and thus their market share eventually disappears as they go out of business?
Elia Insider 
The premise of market share is that you can maintain profitability by volume in the face of low margins.
MIcrosoft and Intel demonstrated the absolute success of the model, and also the harm it does to manufacturers, whose margins are continuously eroded due to an orchestrated inability to innovate.
If Android’s profitability is lost, continued existence in the market will draw the attention of regulators, who will be looking for evidence of monopoly abuse – i.e., that profits from one area of business (advertising) will be used to sustain a loss making area of the business (Mobile phone operating systems) and subsequently harm competitors in that second market/area of business via unnatural pricing.
@magicfinger “Platform profitability” of course is a loose term for Google as they don’t make money off the platform, they make money off the search advertising. And thus why the feds are already investigating Google for bundling.
Elia