LOL Well, yeah - 60 or 70% of all cell phones is better than 3%.

But that assumes that M$ gets much percentage at all. Right now they have a tiny raction of the smart phone penetration that the iPhone has and a trivially small percentage of the overall market ... so it's better to have 3% of overall market share than .00003% of it.
Too lazy to look up figures, but out of smart phones, i think MS almost has same market share (as in phone running some sort of variant of wince)
Anyway that is not the issue.
I can cite countless examples.
rolex,
waterman pens,
All high end fashion items
etc.
You have two options, either massive output, at sacrafice of profit.
Or you make a high end product with small sales, but high profit.
cray computing (before cray died) they only had a market share of 0.0000000001% probably
Cray Research Inc anticipates a 10 to 20 percent decline in earnings for 1992 due to higher component costs, increasing competition and unexpectedly low sales for its computers. Cray expected a year-end net of $114.3 million or $4.20 a share in spite of weak 1st qtr 1992 results, but Cray's stock closed down 50 cents at $38.50 even before its announcement. Cray will be selling its low-end computers through DEC, but analysts are doubtful that the marketing would be as effective as Cray's and estimate a 25 percent drop in earnings for FY 1992. Cray projects a 10 percent growth in revenue from 1991's $862.5 million. Cray also estimates sales of at least 100 of its low-end supercomputers, ranging in price from $300,000 to $500,000, and seven of its Y-MP C90 supercomputers, for $30 million each. Cray's strategy is to reduce costs without reducing its workforce to counter its profit margin drop. Cray also plans to release middle- and low-end supercomputers based on massively parallel processing.
Cray only manufactured like 100+ puters.
Anyway marketshare and profit is like playing poker.
In poker the object of the game is not to win hands but to make $$$$$.
Many times i have played, i lost majority of the hands, but i was the winner of the game.
And the real art of poker, sometimes even if you think you might win the hand, if someone raises, depending on the odds the smart thing might be to fold.