You spend $1B acquiring palm for webOS, but don't want to invest any more in actually trying to market or develop developers?
They flew off the shelves at $150/bucks, even with knowing there's no support, etc. Hobbyists wanted them. Some of my friends and family wanted one. I couldn't justify $500, but could $200 (but couldn't get any at that price).
Let's say they'd sold them at a loss - let's say $149, and they were losing $50 on each one. Getting 2 million of those in people's hands in a year would have 'cost' $100m, but ... the ecosystem would have had a reason to grow, because there would have been a market to serve. Had discussions with folks who claimed "you can't do that" (for some reason, bringing "dumping" and "illegality" in to the argument). So... selling them at $150 while "going out of business" is AOK, but selling that at $150, taking a loss while trying to grow a market (and creating more long term value for the people buying them) "makes no sense" (that was one of the arguments I got from folks).
Of course, it's all academic, and I'm just armchair quarterbacking the whole thing, but few companies even have the option of strategic long term losses to seed/grow a market. I'd think the rewards would be substantial if you can pull it off, but we don't seem to have many who want to try anymore, and that lack of trying really cements the two-party system we have in mobile.
Look at the fire tablets, you have a 7" for $50, there is no way there is any profit in that price.
But i don't know how you can write off $1B... because honestly even iPod or iPhone wasn't successfully from the beginning. So they invest years for that status.
Competitors make clones, release them and after two months declaring abandoning market. Totally non-sence for me!