Windows generates less than a third the profit of iOS + OS X
While a lot of the credit for Apple's success is rightfully assigned to the iOS franchises, the OS X business has more than quadrupled in five years. This has happened without drastic price fluctuations.
Context & Ripple Effects
Horace Dediu's asymco analysis lands a week after the chart showing Microsoft had sold three times as many Windows 7 licenses as all Apple products combined three times as many Windows 7 licenses as all Apple products combined — and reframes that volume gap as economically beside the point: Windows produces under one-third the profit of Apple's iOS and OS X franchises together.
It extends a pattern the corpus has been tracking since 2009, when the iPhone was already taking 32 percent of handset industry operating profits with single-digit share, and January's finding that Apple's 4% mobile share captured over half the industry's profit over half the industry's profit. The notable wrinkle here is OS X itself: more than quadrupled in five years with no drastic price moves, meaning Mac growth is volume-plus-margin, not discounting.
First-order effects
- Microsoft's Windows business is suddenly benchmarked on profitability rather than license volume — the 3x unit advantage over all Apple products coexists with a worse-than-1-to-3 profit deficit against iOS plus OS X.
- Apple's desktop franchise stops being an afterthought in the comparison: OS X quadrupling without price cuts makes the Mac a second profit engine alongside iOS, not just a halo.
Second-order effects
- PC OEMs competing for Windows license volumes face the squeeze the numbers imply — the ecosystem's OS-level profit concentrates elsewhere, pressuring hardware partners toward premium differentiation they have struggled to build.
- Investor attention on both sides shifts from quarterly shipment counts to profit-per-device comparisons, changing which metric each company's earnings narrative is judged against.
Third-order effects
- If the pattern holds, industry structure splits between the licensed-OS volume model and the integrated hardware-software margin model, with 'who sells more units' losing its standing as the measure of who is winning.
- Analyst frameworks built on market-share leadership get rebuilt around profit concentration — the same inversion already visible in handsets since 2009 migrating to personal computers.
The trend: Computing-industry economics are shifting from unit-share dominance to profit concentration in vertically integrated platform vendors, with the PC market now exhibiting what smartphones showed two years earlier.