The decline in sales for Samsung, particularly for high margin devices, has been matched also by a decline in profit growth.
How will Apple respond to a direct attack against the cornerstone of it's ecosystem, which drives sales of its high margin devices?
(Instead of software license sales, they either profit from high-margin device sales or, in Google's case, enhancing its online ad business).
While the Android platform is increasingly popular, the handset maker could eventually become one of many producers of relatively standardized, low-margin devices running the system – leaving Google to skim off most of the advertising revenue cream.
Nokia pinned the blame for its lower expectations on several causes: competition in high-end phones; the weak euro, which increased the cost of goods sold; and a shift in product mix to low-margin devices.
Today the retailer's new boss, Hubert Joly, professes to "love showrooming" because it means that a prospective customer is on the premises.Having people on the premises also helps Dixons to bundle sales—in particular, to sell high-margin accessories and services along with low-margin devices.
This approach sits in stark contrast to the Apple and Samsung, who rely on high-margin devices.
The second is in the volume game, where profit is derived from a mix of aggressive sales of low-cost and low-margin devices.
To stay in the lead, Apple simply needs to keep a "top three" or "top four" smartphone vendor ranking and continue selling high-margin devices, says Greengart.
It's been said that the late Steve Jobs wanted a proper Apple TV but HDTVs have notoriously low-margin devices — Apple doesn't make products they can't make money on.
