- Apple's competitive advantage is in software and the integration of hardware, software and online services, not in simple hardware like flat panel TVs or hi-fi boom boxes.
- Apple's hardware partners form an ecosystem that helps guarantee Apple's future dominance in digital media.
- Margins on consumer electronics hardware are far lower than Apple's software-enriched margins.
So why did Apple release a hi fi devoid of any differentiating software or services? Is its brand really enough to command a large price premium?
And most important, do Apple shareholders really want Apple to be in the low-margin boom box and flat-panel TV hardware business, competing with its current partners?