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iPhone's 36% of Q4 global handset revenue accelerates industry growth

post #1 of 13
Thread Starter 
New data shows that Apple accounted for 36 percent of worldwide mobile phone revenue and 74 percent of industry EBIT in the fourth quarter of 2011, with the iPhone taking more than a quarter of the entire smartphone market.

According to a report released on Thursday from research firm UBS, Apple managed to garner 36% of the handset industry's revenues in the fourth quarter of 2011 while only accounting for 9% of units sold. This is up from the company's 20% share in Q3 and is largely attributed to pent up demand for the company's next generation iPhone 4S.

Apple dominated the market in EBIT (Earnings Before Interest and Taxes) percentages, and accounted for 74% of the industry in Q4, up from 49% in the previous quarter.

The iPhone maker massive sales helped accelerate handset market revenue growth to +29% year over year in the fourth quarter of 2011 and notes that without the iPhone, revenues and volume growth actually decelerated worldwide.


Source: UBS estimates


Analyst Maynard Um estimates that overall industry revenues excluding Apple grew only 4% year to year following an acceleration of +15% in Q3 and +19% in Q2. He goes on to say that overall volume growth decelerated from -5% year-over-year in Q3 to -7% in Q4 for developed markets, and from +20% y-o-y to +17% for emerging markets.

The emerging markets of Asia, the Middle East and Africa saw a collective deceleration from +21% in Q3 to +9% in Q4, excluding iPhone sales. The burgeoning regions are important for Apple as the company continues to extend its reach beyond U.S. borders.

During the Cupertino, Calif., company's epic first quarter 2012 earnings call, it was said that demand for the iPhone in China was "staggering." The world's biggest mobile market is the second largest for Apple behind the U.S., and is seen as the source of gigantic sales in the coming years.

Worldwide smartphone growth also accelerated in quarter four, being mainly driven by Apple and Samsung, as feature phone sales continue to decline. Overall, the handsets now account for over 30% of the total mobile market and rake in 75% of industry revenues.


Source: UBS estimates


The market is becoming a two horse race between Apple and Samsung, as the companies' combined sales accounted for over 55% of industry revenues and over 90% of industry EBIT.

Samsung's sales equate to an estimated 26% share of the overall smartphone market, and represented 54% of all Android phones sold in Q4. The share eclipses number two Android handset maker HTC's 15%, and doesn't show signs of slowing going into 2012.

The fight for OS dominance will continue into 2012, with Android currently enjoying a considerable lead of 44% of all smartphones, followed by Apple's iOS with 27% and a 12% for the dying Symbian platform.


Source: UBS estimates


Google's mobile operating system saw a slight decline at the end of 2011 while iOS gained some ground, but it is too early to tell if the rise resulting from the iPhone 4S launch will start a trend into 2102.

[ View article on AppleInsider ]
post #2 of 13
I can't wait to hear slap-happy's reasoning as to why this shows that Apple is doomed.

Let's see if I can try:

[slappy]"Apple is going to run out of places to store all of its cash and have to give some back to the shareholders. After they do that, they'll be broke and Samsung will buy them" [/slappy]
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Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #3 of 13
Quote:
Originally Posted by jragosta View Post

I can't wait to hear slap-happy's reasoning as to why this shows that Apple is doomed.

Let's see if I can try:

[slappy]"Apple is going to run out of places to store all of its cash and have to give some back to the shareholders. After they do that, they'll be broke and Samsung will buy them" [/slappy]

He's gone dark. I think it's really Balmer posting, typing google and thinking MS.
post #4 of 13
Quote:
Originally Posted by ChristophB View Post

He's gone dark. I think it's really Balmer posting, typing google and thinking MS.

That's just crazy enough for me to believe it.
post #5 of 13
Quote:
Originally Posted by jragosta View Post

I can't wait to hear slap-happy's reasoning as to why this shows that Apple is doomed.

Let's see if I can try:

[slappy]"Apple is going to run out of places to store all of its cash and have to give some back to the shareholders. After they do that, they'll be broke and Samsung will buy them" [/slappy]

Hey Mods... can you please allow the insertion of a <slapppy></slapppy> tag so that it displays as text being shown as if through a beer bottle? Or maybe pink with prancing unicorns??

Just saying...
post #6 of 13
If Apple had 55% profit share when they only had a 20% revenue share how much do they have now that they are holding a 36% revenue share. As we saw in the last quarter they increased their profit margin on the iPhone. I doubt others were able to do that during the iPhone 4S release.

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post #7 of 13
Quote:
Originally Posted by SolipsismX View Post

If Apple had 55% profit share when they only had a 20% revenue share how much do they have now that they are holding a 36% revenue share. As we saw in the last quarter they increased their profit margin on the iPhone. I doubt others were able to do that during the iPhone 4S release.

We're comparing different things here: EBIT and net income, but we might be able to ballpark this.

Previous quarter for Apple:
20% revenue share (second paragraph)
49% EBIT (third paragraph)
55% profit (Asymco link)

Last quarter for Apple:
36% revenue share (first paragraph)
74% EBIT (first paragraph)
?? profit

Revenue share climbed by 80%, EBIT climbed by 51%.

Unless their taxes and interest rose massively (unlikely between two consecutive quarters without major financial events), it would seem likely that Apple is now walking away with 85-90% of the industry's profits.
post #8 of 13
Quote:
Originally Posted by cvaldes1831 View Post

Unless their taxes and interest rose massively (unlikely between two consecutive quarters without major financial events), it would seem likely that Apple is now walking away with 85-90% of the industry's profits.

If a mainstream article comes out saying that I wonder how much the stock will jump that day.

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post #9 of 13
Who knows?

However, let's take a peek...

Apple income financials
Samsung income financials

We don't have figures for 2011 from Samsung, but it looks like their interest expenses wiped out their interest income in 2010.

Meanwhile, Apple has no interest expenses which makes sense since they have zero debt whereas Samsung does have a bit of debt. Meanwhile, Apple is tripping over large sacks of money and trying to investing them elsewhere until they find something really nice to buy.

Apple's gross margin on a companywide level is higher than Samsung's. Is this the same in their handset divisions? Yes, it is likely.

Now EBIT is Earnings Before Interest and Taxes. Would you rather pay zero taxes on no net interest income (Samsung) or would it be better to pay taxes on a pile of net interest income (Apple)?

I wonder what Slapppy would say?
post #10 of 13
Quote:
Originally Posted by Tallest Skil View Post

That's just crazy enough for me to believe it.

Seriously... Doesn't he sound as cracked?
post #11 of 13
But... but... Android is winning. Android has major smartphone UNIT market share and that's what excites Wall Street. It's those big round daily activation numbers that sets investors' and analysts' hearts aflutter. Where is Apple going to get all that future growth potential needed to survive as a company when Android is capturing the hearts and minds of the impoverished masses? Apple should get out of the smartphone industry now while it still has some dignity left.
post #12 of 13
Uh oh, Slapppy has cracked Constable Odo's password which must have been "androidsucks."

post #13 of 13
Quote:
Originally Posted by Constable Odo View Post

But... but... Android is winning. Android has major smartphone UNIT market share and that's what excites Wall Street. It's those big round daily activation numbers that sets investors' and analysts' hearts aflutter. :

I am looking at the Google stock chart and I am not seeing investors loving Android that much. The problem is no clear way Google is making any money out of this. Advertiser don't want to pay has much for mobile ads than internet ads.
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