From IBM Mainframes to Wintel PCs to Apple iPhones: 70% is the Magic Number
October 13, 2011
Time to ring the Bell. With the iPhone 4S, Apple has just surpassed the 70% gross margin metric that usually equates to a compute platform becoming an industry standard. IBM’s mainframe achieved it in the 1960s with the 360 series and still is able to crank it out with their Z-series. The combined Intel and Microsoft tandem (Wintel) achieved 70% in the late 1980s and continues to do so across even low-end PCs today. In addition, Intel generates >80% gross margins on its data center, XEON based platforms. Crossing 70% as one can see is a big deal and usually means that a standard has been created that cannot be overcome in head-to-head competition but only by a succeeding platform.
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