Because content is more important to selling phones than better hardware and software. Right now, with the App Store and iTunes, Apple has the most and best content for their phones.
But what if they lose Netflix, Kindle and others by demanding too much, but those applications are still available on Android? At that point, how much better does iPhone hardware and software have to be for consumers to buy an iPhone over an Android phone?
With iPod, Apple had high profit margins, the most and best content, and dominant market share. They should want to repeat that model with iPhone, not the 1990s Mac model.
But what if they lose Netflix, Kindle and others by demanding too much, but those applications are still available on Android? At that point, how much better does iPhone hardware and software have to be for consumers to buy an iPhone over an Android phone?
With iPod, Apple had high profit margins, the most and best content, and dominant market share. They should want to repeat that model with iPhone, not the 1990s Mac model.