Tue, 10 Aug 2004

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market share is bogus

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When you enter certain realsm, such as computers, normal measures of profability are completely unreliable. It makes sense to think of market share if you're selling, let's say, Coca-Cola, but as luxury car manufacturers will tell you, who otherwise really cares? After all, the measure of a successful business has never been market share. (Would you really have considered the U.S. Postal Service—prior to privatization—a successful business despite having a market share of nearly 100%?) Success is and always has been measured by profitability, and if your balance sheet has more black ink than red at the end of the year without having to resort to Enron-like tactics, then that's a pretty good success.

Yet, despite basic business and economic common sense, otherwise intelligent people continue to push the idea of market share as the ultimate measure of dominance.

Daring Fireball deconstructs the myth, using the example of the Macintosh, and how the idea of licensing what later became known as Mac OS doesn't make that much sense.

21:04:08 10 Aug 2004 > /computers/macosx > permalink > 48 comments

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