And the net profit on a diamond necklace is higher than either. I'm not sure what point you're making.
Apple didn't build the iPhone because it was profitable. They built it because they knew that a race was about to begin, in which second place was really going to suck. HBO is faced with the same reality, whether they believe it or not.
And the point I'm making is that the choice wasn't really theirs. Either they were going to sell the most profitable smartphones, or somebody else was going to.
Let's take a look at subscriber growth on Netflix versus HBO over the next few years, and resume the discussion then. As RIM learned, the first few derivatives of that number are important.
Perhaps you've forgotten how perfectly awful smart phones were before the iPhone.
The original pitch was never "check out these amazing apps". There were no apps. People's minds were blown by the fact that you could get a non-hideous phone with a UI not assembled by two troupes of rival chimpanzees.
