Comment by rtc

Profit is an almost perfect indicator of barriers to entry. If a company makes a lot of profit (35+% operating margin) doing something - Apple's HW, or Microsoft's OS - many observers inevitably think they can just come in with a lower margin version, thinking "hey, some margin on huge volumes is still great!" But they miss the point that large margins follow from barriers to entry. Large margins on revenues the size of Apples indicate huge barriers to entry.