Dropbox have given away terabytes of free online storage over the years. Yet they are making a grand profit, they even turned down an offer from Apple some time ago. So how can a company that gives away it’s product for free still make so much profit?
See people like to be treated like loyal customers, not like an ATM for the company, therefor people buy more! Pretty basic right? Well some companies should learn from this.
How my Dropbox looks now
It is a well known fact that Dropbox loves giving away free space, they have various “tasks” you can complete on their website to get free space (see picture below)
Also the most recent sign of generosity, all pro accounts just got their space doubled! And for those early buyers of the 25gb package, well they just got an email thanking them for buying Dropbox in the early stage and now they won’t ever have to pay a dropbox bill (unless they upgrade). Pretty damn sweet! (more…)
“While Apple generates more than $575 in profit for every iOS device, and according to estimates in 2007 Apple earned more than $800 on every iPhone sold through ATT, Horace Dediu reports that Android generated less than $550m in revenues for Google between 2008 and the end of 2011, earning only $1.70 per year, per Android device — explaining how Apple is sucking up two thirds of the profit in the mobile phone business. Dediu’s starting point is a settlement offer Google made to Oracle of $2.8 million and 0.515% of Android revenues on an ongoing basis. His assumption is that those numbers represent Google’s revenue from Android to date. ‘If this is the case,’ writes Dediu, ‘We have a significant breakthrough in understanding the economics of Android and the overall mobile platform strategy of Google.’ Of course profitability is not the only reason Google is in the mobile phone business. ‘P&L considerations were not the only (or even at all) factors in investment for Google. Having a hedge against hegemony of potential rivals, having a means to learn and develop new business and having a role in defining the post-PC computing paradigm are all probably bigger considerations than profitability,’ writes Dediu. ‘My guess is that Android is not a bad business. But it’s also not a great one.’”
