Edit to add: This is the metric that says that life is awesome for taxi companies because Uber runs enormous losses. Profit is a useful metric (and Apple has awesome profits). Market share is a useful metric (and Apple has a small minority of the smartphone market share). Profit-share is something that somebody made up to make Apple's market share not seem as small.

Your taxi analogy is unsatisfying for a number of reasons, not the least of which is the utterly unrelated market conditions between that and the mature consumer electronics industry, but feel free to expand if you think it will go somewhere.

edit: clarity

But what the hell, I'm feeling unreasonable today:

Market share is meaningful because it demonstrates the size of the market that Apple could potentially reach.

Market share is meaningful because if Apple's market share falls below a critical percentage, people will not target the iPhone for app development (as happened with the Mac and is currently happening with, say, Windows Phone).

That said, market share is, of course, at least one of the relevant metrics but the market needs to be defined. Companies don't typically target the largest theoretically possible market for their products. They target a subset for a variety of reasons.

Except the data says differently. From the transcript of the conference call:

>The App Store set new all-time quarterly records for both the number of transacting customers and overall revenue. The strong performance of the App Store helped fuel 1.5 billion dollars in services revenue, also an all-time record.

But the iPhone isn't really in that position. Certainly, it seems to have no trouble attracting developers and companies creating apps to target travel, subscription, and other services.

But clearly iPhone is not in that position, I agree!

You mean like last year's holiday shopping numbers? From "Apple's iOS Has Once Again Decimated Android When It Comes To Data That Matters": http://www.businessinsider.com/ios-android-shopping-data-201...

>Adobe, which is tracking online shopping, reports the following: "iOS users drove four times as much mobile sales revenue as Android users, 79 and 21 percent respectively."

I remain unconvinced.

[1] Unless people won't buy from Apple even if they're the only game in town. But I doubt there's enough of those people to make a difference.

edit: formatting.

But, no, you're wrong, and the way you're wrong is doing an excellent job of demonstrating the problems with profit share.

There's not an amount of "profit" out there. There is sort of an amount of "revenue" out there. But Apple takes in a small minority of the revenue associated with smart phones, as demonstrated by their market share, which is something on the general order of 14%. The fact that other vendors are inefficient at turning their revenue into profits is neither here nor there.

Of course, the actual analysis is far more complicated than that, since the market isn't in fact a static thing. If Apple turned say half of their unit profits into price reductions, it would have enormous, chaotic effects on the smartphone market. I don't have the ability to predict what the end result would be, and neither does anyone here. But profit share doesn't tell us that Apple has no opportunity, and in fact it is a metric crafted to draw attention from the fact that Apple has a low market share, which does a better (though certainly imperfect) job of showing the opportunity.