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Apple's iPhone extends lead in mobile profits

post #1 of 17
Thread Starter 
A graphic depiction of Apple's increasing share of the top eight mobile vendors' operating profits validates the company's smartphone-centric strategy with iPhone.

As reported by Horace Dediu of Asymco, Apple's profit share of the top mobile vendors is widening dramatically, thanks to the company's solitary focus on smartphones.

Since the iPhone appeared in 2007, Nokia has taken the most brutal beating, with its once-leading profits of up to $3.5 billion per quarter being hammered down to just $1.3 billion or less this year.

Apple surpassed Nokia in mobile profits in Q4 of 2008, just a year and a half after bringing iPhone to market. Nokia continues to sell vast numbers of phones, but makes very little profit on these mostly non-smart devices. That has allowed Apple to claim well over 3 times the mobile profits on far fewer sales of iPhones worldwide.

RIM, HTC & Motorola

The most similar smartphone maker to Apple, Canadian BlackBerry maker Research in Motion, has steadily increased its quarterly earnings but not nearly as quickly nor as dramatically as Apple, despite making smartphones running its own operating system like Apple.

HTC, which has relied on both Windows Mobile and Android to power its smartphones, has achieved the third highest profits per phone with a similar focus on smartphones, but its overall profits are in fifth place out of the top eight mobile makers.

Motorola finally climbed out of quarterly losses last year as it shed phone volume for smartphone profits, benefitting greatly from Verizon Wireless' push to drive Android smartphones over the last year.

With just a sliver of the mobile industry's profits, Motorola has a long way to go in its smartphone strategy, but is also facing the reality of Verizon now backing the iPhone rather than promoting its Droid products. Motorola now has neither very profitable phone sales nor large sales volumes.

Samsung, LG, and Sony Ericcson

Samsung, the most profitable Android maker, continues to make a large number of non-smart phones and therefore makes very little per phone. However, like Nokia it sells a large number of phones. Samsung has worked hard to leverage both its own Bada platform and Android to sell more smartphones, and also hopes to follow Apple in making tablets and a media player like the iPod touch.

LG is in a similar position, with higher volumes of mobiles; however, the company has shifted from being profitable to posting mounting quarterly losses over the past year as it struggled to deliver Android, Windows Mobile, and then Windows Phone 7 devices that customers might want.

Sony Ericsson, following the decline of Motorola, shifted from profitable prior to the iPhone to posting regular quarterly losses, but managed this year to achieve minor profits based on relatively small volumes similar to Motorola and with similarly meager profits per phone sold.

All signs point toward greater adoption of smartphones going forward. That bolsters the opinions of Apple executives, who have noted that despite posting industry leading profits, the company still has a relatively small share of the world's mobile market, giving the company vast opportunities for expansion as mobile users shift toward more sophisticated phones.
post #2 of 17
It's amazing what happens when you don't build cheap plastic hardware! Good for Apple.

I'm just curious, does anyone know if one of the other phone makers build one using actual glass or metal?
post #3 of 17
RIM holding in there with a pre real smart phone product line, amazing!
Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
Reply
post #4 of 17
Quote:
Originally Posted by digitalclips View Post

RIM holding in there with a pre real smart phone product line, amazing!

Teenagers. They are what's keeping RIM alive.
post #5 of 17
Wait, so LG loses money on each phone, on average? Ouch.
post #6 of 17
But, but...... Profits Don't Matter!
post #7 of 17
Quote:
Originally Posted by anantksundaram View Post

But, but...... Profits Don't Matter!™

But... but... that vaporware called "Gingerbread", running on hardware that has not been sold, that all the techtards, geeks, and nerds keep telling us that there is "massive" demand from people that don't know Android from a pile of droppings on the ground will be the most amazing introduction since the Palm Foleo!!!

Oh, the excrement... er.. I mean excitement!!!
post #8 of 17
Quote:
Originally Posted by sflocal View Post

But... but... that vaporware called "Gingerbread", running on hardware that has not been sold, that all the techtards, geeks, and nerds keep telling us that there is "massive" demand from people that don't know Android from a pile of droppings on the ground will be the most amazing introduction since the Palm Foleo!!!

Oh, the excrement... er.. I mean excitement!!!

I wouldn't call it vaporware, since it was actually demoed today. Anyhow...

Let's just put it this way: at hi-mobile.net, an iphone 4 with 16GB flash will run $975. An average android phone costs $400-500. May explain why BOGO isn't really feasible to do if it really is that much more.

The iphone is their top seller or perhaps #2, you decide, it isn't numbered

http://www.hi-mobile.net/top-20

Not rocket science as to why apple makes more, but is that last pic including all profit or just from mobile?
post #9 of 17
Quote:
Originally Posted by Stourque View Post

Teenagers. They are what's keeping RIM alive.

No buddy, it is middle aged guys like me keeping them alive. As a big fan of Apple, iPhone is the only thing missing in my gadget list. I just can not use a phone without keyboard. My next phone will be a Torch, or whatever they will release with similar form factor when my contract is up.
post #10 of 17
This era of Apple will be dissected for decades to come I'm sure. (And long, long live this era!) Pie has gotten much bigger and the commanding percent of that pie that has gone to Apple. Great visualization of the data, too. Very well done Horace Dediu of Asymco.
post #11 of 17
Quote:
Originally Posted by Stourque View Post

Teenagers. They are what's keeping RIM alive.

Took the words out of my mouth but forgot to add stubborn men who are clueless to experiment with something new...

Seeing anyone press physical buttons on a smart phone looks SO old fashion!.. reminds me of someone still using a rotary phone!

The fact is the iPhone is a DREAM to type in landscape mode even if you're some fatty with sausage fingers.
post #12 of 17
According to these excellent charts, it appears that both Apple and Google are getting just what they are aiming for.

Apple has always targeted the high profit, performance and quality ground - like BMW.

As reported by IDG New Service, Eric Schmidt laid out Google's Three Goals. The one that applies to this thread is;
Thirdly, Schmidt said Google wants to increase the availability of inexpensive smartphones in poor regions. "We envision literally a billion people getting inexpensive, browser-based touchscreen phones over the next few years. Can you imagine how this will change their awareness of local and global information and their notion of education?" he wrote. So, Apple is getting the profit and high performance & quality marks. Google is getting the world's phone manufacturers to flood the world with cheap smart-phones (and by my inference - cheap tablets) so they can have more Google-eyes.

It seems that most people view ( or can only see ) these two companies locked in a fight to the death. Another perspective might indicate that Google is priming the world with cheap commodity smart devices and Apple can address those that need ( or want ) a high performance and quality product and experience - AND - that can afford it.

Only a couple of companies are not trying to become the King of Google's Smart Phone Commodity Barrel. It will be interesting to see if they can match Apples performance.
post #13 of 17
How the hell does Nokia manage to stay in business? All those cellphones, so little profit.
post #14 of 17
I guess this vindicates Apple's strategy, although it has been obvious to the un-biased.
If I was running a business manufacturing product X, I would want to make the greatest profit on it. To do this I would aim to manufacture as least as possible, and sell at the highest price,
But would people buy a pricey product, especially those on a budget, and think with wallets instead of their brains. I know I will spend large amounts of time and money on innovation, design, planning and just plain hard work, and make a fantastic product. Something that has never been done before to wow the general public. Well folks that product was the iPhone. How can other tech companies keep up with Apple ? Answer, they cannot.
Without resting on their laurels, Apple goes out and makes another fantastic product, called the iPad, how do they do it, not once, but twice !
So Apple makes a killing, people love the products and flock to them, and they sell in the millions.
Poor company "Z", looks at Apple's success with envy, copies it, but extremely poorly with plastic crap and rubbish UI. Sells heaps, but makes hardly any money as it has to compete with companies, A, B, C, D ....... who are also making the same pile of crap.
I just don't understand people who cannot see or won't see the bleeding obvious.
Lots of these companies will go broke, give up, to replaced by other like-minded cheap skates, who will also fail. Why do they bother in the first place ?
post #15 of 17
Quote:
Originally Posted by sflocal View Post

But... but... that vaporware called "Gingerbread", running on hardware that has not been sold, that all the techtards, geeks, and nerds keep telling us that there is "massive" demand from people that don't know Android from a pile of droppings on the ground will be the most amazing introduction since the Palm Foleo!!!

Oh, the excrement... er.. I mean excitement!!!

Gingerbread is already out in the market on the Nexus S. I think you're thinking about Honeycomb, which was shown at CES and yesterday. I wouldn't really call Honeycomb vaporware since it hasn't missed its release date.

Quote:
Originally Posted by Constable Odo View Post

How the hell does Nokia manage to stay in business? All those cellphones, so little profit.

Considering the graph, I'd say success is more about the area of Nokia's bar, not its height. It looks like they're doing better than most.
post #16 of 17
deleted
post #17 of 17
Quote:
Originally Posted by White Rabbit View Post

If I was running a business manufacturing product X, I would want to make the greatest profit on it. To do this I would aim to manufacture as least as possible, and sell at the highest price,
But would people buy a pricey product, especially those on a budget, and think with wallets instead of their brains. I know I will spend large amounts of time and money on innovation, design, planning and just plain hard work, and make a fantastic product. Something that has never been done before to wow the general public. Well folks that product was the iPhone. How can other tech companies keep up with Apple ? Answer, they cannot.

This bolded is incorrect: it amounts to saying that you should make one unit and sell it as unique. The idea is to make the highest amount at the highest price such that revenue and gross profits are maximized. I think that is what you meant.

BTW: Your posts would be much easier to read if you used actual paragraphs - with white space between them. Other than that, I typically appreciate your posts.
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