Of course it does. Imagine the profits if iOS had 90% market share as Windows once did (or still does) on the PC.
Your point about IBM is a good one though. I think the reason why vertical integration can be dangerous is that the entire platform is only as strong as its weakest link. You don't want great industrial design being held hostage by, say, bad batteries or slow CPUs.
This is false. Apple's percentage of the profits in the cell phone industry has only increased over the years; it's up to 92% now: http://www.wsj.com/articles/apples-share-of-smartphone-indus....
- a good portion of the people currently carrying Android phones would buy an iPhone instead of a Windows or Blackberry phone if Android wasn't an option
- viable competition provides pressure on Apple to keep prices down and/or add more features to their phones at their current price. (For example, without Android pressure, Apple would probably still be shipping 3.5 or 4 inch phones)
Apple set the world record for the largest quarterly profit ever—$18 billion—during last year's holiday quarter when they sold 74.5 million iPhones, which is more smartphones than any company has ever sold in a single quarter.[1]
And given this year's iPhone 6s weekend launch surpassed last year's opening weekend (13 million vs. 10 million phones), they could break their own unit and profitability records.
It's difficult to imagine Apple making more money than they do now.
[1] http://www.cnet.com/news/apple-beats-world-record-in-quarter...
What would Apple's profits be if Android did not exist? I believe they would be much higher just as Microsoft's profits would be much higher if Linux didn't exist.
But it's a counterfactual question. So we will never know for sure.
IBM didn't bring the personal computer to market early enough, which left the door open to Apple, Commodore and others. Then they signed the MS-DOS licensing deal... and the rest is history.
In other words, until apple makes a stupid mistake, they're unstoppable.
It goes back to the days where DEC, NCR, IBM etc... came with entire portfolios of competing implementations, none of which interoperated with each other. IBM for example also had the "Insurmountable Platform Advantage", it had the full stack ... literally, from sillion, chip design, operating-systems all the way up to software-services, but the industry lost out due to big blue's big-iron prices and the pc clone-wars began.
I don't see what the pc clone-wars are in this case, android doesn't seem to make much of dent in apple's profits here.