Not a long time back, there was a report about Apple being able to buy entire mobile industry, in cash. The Cupertino company
comfortably sits atop a pile of some $70 billion. However, Apple's share in the computer segment is expected to be at around 10 percent and this figure is after taking into account its formidable position in tablet segment, thanks to iPad. With such miniscule market share, how is this company able to amass such staggering wealth? Well, it wouldn't be a bad analogy if we think of Apple as John Galliano of tech industries, while the Dells and HPs are TopShop.
According to a report, Apple's estimated gross profit margin from Mac computers stands at 28 percent, compared to measly 5.66 percent gross margin of HP. So, thanks to its PR savvy, Apple is able to extract an average price of $1323 for its Macs, whereas the remaining industry struggles to sell its PCs at a little over $600.
However, the question whether Macs are able to provide twice the performance of an ordinary PC is debatable. Both Apple fanatics and detractors have their strong view points. The report concludes that Apple is not only able to charge twice the price of an ordinary computer, it performs even better when it comes to gross margin. Apple's profit from a unit sold is about 7 times higher than the amount earned by HP per unit sold.
There is no doubt about the superior quality of Apple products, but are these products superior enough to command 100 percent premium pricing? Probably yes, at least that's what Apple's constantly increasing market share suggests.