“The network effect is the single most important determinant of the success of a software platform. It was the primary driver of the Windows operating system’s monopoly,” Bert Danner writes for Seeking Alpha. “No software platform has ever succeeded and endured without a self-reinforcing network effect driving value creation and increasing participation and profitability.”

“Apple’s (AAPL) position in the Post-PC mobile industry will continue to become more and more dominant as their platform and ecosystem accelerates in popularity,” Danner writes. “The majority of new customers joining Apple’s ecosystem will continue to power the engine of the network effect through their desire and ability to engage in ongoing platform commerce. The most important takeaway is that Apple will continue the capture the majority of the Post-PC mobile industry’s profits. This makes Apple the investment opportunity of this generation.”

Danner writes, “Market share is mistakenly being used by Wall Street as a proxy for platform value and dominance. According to comScore, as of November 2012, Android is ahead in market share at 52.6% versus Apple at 34.3%. However, Apple generated 71% of the entire mobile industry’s operating profits, according to Canaccord. In any other industry, the analysis would end right here, as investors and analysts would never seriously contend that market share is more important than profit share.”

Much more in the full article – recommended – here.

MacDailyNews Take: As we wrote back in November 2012:

Android can be widespread and still demographically inferior precisely because of the way in which and to whom Android devices are marketed. Unending BOGO promos attract a seemingly unending stream of cheapskate freetards just as inane, pointless TV commercials about robots or blasting holes in concrete walls attract meatheads and dullards, not exactly the best demographics unless you’re peddling muscle building powders or grease monkey overalls.

Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong. Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.

iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the “Hee Haw” demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth.

Related articles:
The Android engagement paradox – November 26, 2012
People buy more Android phone units and do less with them vs. Apple’s revolutionary iPhone – November 14, 2012
Study: iPhone users vastly outspent Android users on apps, respond much better to ads – August 20, 2012
Apple utterly dominates mobile device market with 6% market share – and 77% of the profits – August 6, 2012
Game over, Android: Apple owns 84% of mobile gaming revenue – May 7, 2012
Wealthy smartphone users more likely to have iPhones; less likely to play games, tweet – April 2, 2012
U.S. Apple product users split evenly between Republicans and Democrats; Half of U.S. households own at least one Apple product – March 28, 2012
Study: iPad users more likely to buy – and buy more – online than traditional PC users – September 29, 2011
Apple iPhone users most open to mobile payments – August 22, 2011
iPhone users smarter, richer, less conservative than Android phone users – August 16, 2011
Apple iPhone users spend significantly more on their credit cards than non-iPhone users – November 5, 2010
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
Nielsen: Mac users are better educated and make more money than PC users – July 12, 2002