Originally Posted by zoffdino
The iPhone accounts for half of Apple sales, but likely more than half of Apple's profit as it's the product with highest margin. Whether it approaches 70% is a question that only Apple management knows.
The high end smart phone market is quickly reaching saturation. Those in the developed world who can afford it already had one. The growth will be in the low and mid-end tiers, which Apple is sorely lacking. I don't think Apple will ever chase the cheap crowd, it's not their DNA. But the mid-tier phones, those that cost $300 - $400, have a huge market that Apple so far is leaving to the Android vendors.
Apple has several problems to deal with.
1. They don't have NTT and China Mobile signed up yet. Obviously, they are both holding out as they and Apple go through their respective negotiations. I'm sure Apple will sign both of them up at some point in time, which would definitely increase Apple's market share on a global level and Apple will see increased sales and revenues from the iPhone product line based on these two.
2. Apple has only announced basically one new model on a yearly basis, when they should be announcing more than that. I think Apple has room to replace their existing iPhone 4 and 4S with an updated model that is their "low end" model which maybe Apple is planning on doing. The other is getting a bigger screen phone, which is seriously hampering their growth. I personally think that the market is definitely split up into three definite screen sizes and Apple needs to constantly address this.
3. There is obviously a market for the low end smartphone market that Samsung seems to have capitalized on where the unlocked version is $150 retail, $99 on sale but there is no money in that, Apple most likely is not stupid enough to make a phone that sells tens of millions and basically makes hardly anything from them due to factoring the costs of warranty issues and support calls in supporting a super low end product. It's similar to the PC industry selling $400 laptops. THERE IS NO MONEY IN IT, SO WHY BOTHER. It's a cheap way of buying market share.
4. iOS obviously needs an fresh update, which it could have used last year, but obviously we have to wait until iOS 7 is finished, but so far, I personally like what I see and know that iOS 8 will just add even more features.
5. I don't know how much pent up demand Apple has for their fingerprint ID technology to get released. Individuals may not care as much as large customers, government, and military customers might be salivating for this technology in smartphones and tablets. So, this is something we have to wait to see how much impact that's happening.
On one hand, it's easy for the analysts to paint whatever picture they want with Apple and they are so far going by what has been officially announced. Sometimes Apple keeping things secretive can have a positive and negative impact on people's perception. But, i feel pretty good that Apple will have some interesting product announcements this year. Its just a matter of will they have a nice large screen iPhone or not. Will they have fingerprint ID technology this year or not. Will they get Apple TV upgraded to make a significant impact on their sales/profits. Will Apple actually release an actual smart TV or not. Will Apple release an iWatch and what will that do to impact revenues/profits. Obviously, Apple will release new MacBookPros, iMacs, Mac Minis and MacPros, so will see if the desktop/laptop sales gets back to increasing sales, etc. I just only have a certain degree of caution in them having production issues this year like they did last year when they announced a lot of products within a short period of time.