Apple's iPhone commands record high 89% of smartphone profits while Android plummets to record low

Posted:
in iPhone edited February 2015
Last quarter, Apple's iPhone took a record 89 percent share of smartphone operating profits, directly causing another record for the holiday shopping season: an all-time low for devices running Google's Android.




The latest breakdown of industry profits by operating system from Strategy Analytics was released on Thursday and provided to AppleInsider. Total smartphone operating profits reached $21 billion in the fourth quarter of 2014, up 31 percent year over year, thanks entirely to Apple.

That growth was led by Apple and its blockbuster iPhone 6 and iPhone 6 Plus, which captured the overwhelming majority of the industry's profit. Android, meanwhile, was relegated to a record-low of 11 percent global smartphone profit share during the quarter.

Apple's share of smartphone profits was also up significantly from the fourth quarter of 2013, when iOS and the iPhone represented a 71 percent share. Apple's profits grew from $11.4 billion in the holiday 2013 quarter to $18.8 billion a year later, while all devices running Android fell from $4.8 billion to $2.4 billion in the same quarters.

All other competitors --?Microsoft, BlackBerry, and others --?did not turn a profit in either the holiday 2013 or holiday 2014 quarters.

"Apple's strategy of premium products and lean logistics is proving hugely profitable," said Neil Mawston, executive director at Strategy Analytics. "Android's weak profitability for its hardware partners will worry Google. If major smartphone manufacturers, like Samsung or Huawei, cannot make decent profits from the Android ecosystem, they may be tempted in the future to look at alternative platforms such as Microsoft, Tizen or Firefox."
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Comments

  • Reply 1 of 54
    MacProMacPro Posts: 18,373member
    I think Microsoft's profits are being overstated there... ;)

    I can see why they want Office on iOS though! :D
  • Reply 2 of 54
    It's not going to worry Google at all. First off, they don't care a lick about the schlubs who sell Anderoid phones. Second, where are those partners going to go? It's not like there are profitable alternatives.

    So when more phone makers exit markets and close up shop, will Apple get blamed for that too? Or will blame go where it belongs(Mountain View) this time?
  • Reply 3 of 54

    Several years ago, I figured that smart phones would go the way of personal computers. Apple would be the biggest single brand, and Windows would dominate the units sold, but for phones Android would represent Windows in that comparison.

     

    Looks like that path has been extended to margins as well. It's pretty funny. Apple does such a good job with business in general.

  • Reply 4 of 54
    jungmarkjungmark Posts: 6,716member
    Bad news for Apple: the closer they get to a 100%, they harder it is for growth. /s
  • Reply 5 of 54
    MacProMacPro Posts: 18,373member
    It's not going to worry Google at all. First off, they don't care a lick about the schlubs who sell Anderoid phones. Second, where are those partners going to go? It's not like there are profitable alternatives.

    So when more phone makers exit markets and close up shop, will Apple get blamed for that too? Or will blame go where it belongs(Mountain View) this time?

    It will worry Google more and more as Apple continue to expunge all things Google from iOS. I know it's been debated many times here but I want to see ?Search ASAP. It doesn't have to be perfect as there will be options but over time it would improve and better yet could be better integrated in the eco system. As the default on iOS it would remove a huge revenue stream to Google as most iOS users will use the default most of the time. Apple can buy in a starting position with an engine such as DDG and work on it.
  • Reply 6 of 54
    fracfrac Posts: 480member
    "Smartphone operating profits"
    Just what exactly does that figure include? Profits for the carriers? Profits for developers? AppStore profits?
    Or all Apple's profits?
    If the latter it's verging on the ridiculous :\
  • Reply 7 of 54
    MacProMacPro Posts: 18,373member
    jungmark wrote: »
    Bad news for Apple: the closer they get to a 100%, they harder it is for growth. /s

    OK you just got the job as a top Wall Street analyst. :D

    100% of the total profits from a tiny percentage of the market will no doubt escape their Google / Samsung paid for mind set.
  • Reply 8 of 54
    MacProMacPro Posts: 18,373member
    sog35 wrote: »
    This is why Apple needs to go for Google's head.  As long as Google is making nice profits with ADS they will be a constant threat to Apple.  They can continue to support the NON-PROFIT android project.  But if Google stops making nice profits or profits shrink for ads they won't be able to throw money into Android in an effort to weaken Apple's hardware business.

    If I was Apple I would take steps to UNDERMINE Google's services.  They have already started with Maps.  Now its time to get serious.

    The should start 2 new new services:

    1. AppleSearch - Buy DuckDuckGo for $5 and improve it.  Make it PURE SEARCH.  No ads.  No junk.  Just the best results possible.  This will not only HURT Google but also benefit iOS users and Mac users.  I'd LOVE to have a decent search engine that does not feed me ads or spys on me that is backed by Apple.  

    2. AppleVideoShare - Like YouTube.  But no ads.  I'm sick of the constant ads on Youtube.  Its an utter joke.  Make a video sharing site for the benefit of iOS users.  

    Google uses cheap hardware to weaken Apple's bread and butter.
    Apple should use 'cheap' (no ads) services to weaken Google's bread and butter.

    Right on Bro' 100% agree.

    ?Video ?Search

    I like that ... "Go for the head". :D

    Watch Google buy up all the small search engines soon if Apple don't move soon.
  • Reply 9 of 54
    sog35 wrote: »
    This is why Apple needs to go for Google's head.  As long as Google is making nice profits with ADS they will be a constant threat to Apple.  They can continue to support the NON-PROFIT android project.  But if Google stops making nice profits or profits shrink for ads they won't be able to throw money into Android in an effort to weaken Apple's hardware business.

    If I was Apple I would take steps to UNDERMINE Google's services.  They have already started with Maps.  Now its time to get serious.

    The should start 2 new new services:

    1. AppleSearch - Buy DuckDuckGo for $5 and improve it.  Make it PURE SEARCH.  No ads.  No junk.  Just the best results possible.  This will not only HURT Google but also benefit iOS users and Mac users.  I'd LOVE to have a decent search engine that does not feed me ads or spys on me that is backed by Apple.  

    2. AppleVideoShare - Like YouTube.  But no ads.  I'm sick of the constant ads on Youtube.  Its an utter joke.  Make a video sharing site for the benefit of iOS users.  

    Google uses cheap hardware to weaken Apple's bread and butter.
    Apple should use 'cheap' (no ads) services to weaken Google's bread and butter.

    They also need to help out MS. I'm not saying with money, but Windows Phone is on life support. They need to bolster that as an alternative to Android (the world will never be 100% Apple no matter how much people delude themselves, and competition is good for innovation). Throwing some exclusive apps that direction (and not on Anderoid) could help. (Example: allowing iMessage integration, etc).
  • Reply 10 of 54
    Android manufacturers can simply do what Apple does to make more profit:

    1. Forget marketshare.

    2. Always sell with a high profit margin.

    3. Make a product so good and compelling, people are willing to buy it despite the higher price.

    Simple.

    Every luxury product manufacturer does this.

    The problem for Android manufacturers is that they don't own Android. Therefore, they cannot make their product good nor compelling enough.

    They are at the mercy of Google. And Google doesn't care about their product nor their profit. Google cares only for how many ads it can sell.
  • Reply 11 of 54
    MacProMacPro Posts: 18,373member
    They also need to help out MS. I'm not saying with money, but Windows Phone is on life support. They need to bolster that as an alternative to Android (the world will never be 100% Apple no matter how much people delude themselves, and competition is good for innovation). Throwing some exclusive apps that direction (and not on Anderoid) could help. (Example: allowing iMessage integration, etc).

    If they wait a while Apple can just buy Microsoft ;)

    Sorry, their history being what it is, Apple should let Microsoft die. Other competition will rise up, fear not, but helping the devil is never a good idea.
  • Reply 12 of 54
    MacProMacPro Posts: 18,373member
    jameskatt2 wrote: »
    Android manufacturers can simply do what Apple does to make more profit:

    1. Forget marketshare.

    2. Always sell with a high profit margin.

    3. Make a product so good and compelling, people are willing to buy it despite the higher price.

    Simple.

    Every luxury product manufacturer does this.

    The problem for Android manufacturers is that they don't own Android. Therefore, they cannot make their product good nor compelling enough.

    They are at the mercy of Google. And Google doesn't care about their product nor their profit. Google cares only for how many ads it can sell.

    That is true. Maybe Scamsung will read your post and try that approach.
  • Reply 13 of 54
    sog35 wrote: »
    This is why Apple needs to go for Google's head.  As long as Google is making nice profits with ADS they will be a constant threat to Apple.  They can continue to support the NON-PROFIT android project.  But if Google stops making nice profits or profits shrink for ads they won't be able to throw money into Android in an effort to weaken Apple's hardware business.

    If I was Apple I would take steps to UNDERMINE Google's services.  They have already started with Maps.  Now its time to get serious.

    The should start 2 new new services:

    1. AppleSearch - Buy DuckDuckGo for $5 and improve it.  Make it PURE SEARCH.  No ads.  No junk.  Just the best results possible.  This will not only HURT Google but also benefit iOS users and Mac users.  I'd LOVE to have a decent search engine that does not feed me ads or spys on me that is backed by Apple.  

    2. AppleVideoShare - Like YouTube.  But no ads.  I'm sick of the constant ads on Youtube.  Its an utter joke.  Make a video sharing site for the benefit of iOS users.  

    Google uses cheap hardware to weaken Apple's bread and butter.
    Apple should use 'cheap' (no ads) services to weaken Google's bread and butter.


    I have been thinking the same thing.

    Purchase Vimeo for a video platform. Invest in podcasters to use the video platform as well then promote podcasts as channels on Vimeo to draw traffic.

    An interesting note: In the past five years Apple has increased their data center space by nearly 1500% and are apparently preparing to double their data center space again. In the next five years Apple will be one of the largest "cloud service" providers in the world.
  • Reply 14 of 54
    jungmark wrote: »
    Bad news for Apple: the closer they get to a 100%, they harder it is for growth. /s

    Not true at all. There is still a huge number of android users to covert into profitable Apple customers.
  • Reply 15 of 54
    Quote:

    Originally Posted by sog35 View Post

     

     

    This is why Apple needs to go for Google's head.  As long as Google is making nice profits with ADS they will be a constant threat to Apple.  They can continue to support the NON-PROFIT android project.  But if Google stops making nice profits or profits shrink for ads they won't be able to throw money into Android in an effort to weaken Apple's hardware business.

     

    If I was Apple I would take steps to UNDERMINE Google's services.  They have already started with Maps.  Now its time to get serious.

     

    The should start 2 new new services:

     

    1. AppleSearch - Buy DuckDuckGo for $5 and improve it.  Make it PURE SEARCH.  No ads.  No junk.  Just the best results possible.  This will not only HURT Google but also benefit iOS users and Mac users.  I'd LOVE to have a decent search engine that does not feed me ads or spys on me that is backed by Apple.  

     

    2. AppleVideoShare - Like YouTube.  But no ads.  I'm sick of the constant ads on Youtube.  Its an utter joke.  Make a video sharing site for the benefit of iOS users.  

     

    Google uses cheap hardware to weaken Apple's bread and butter.

    Apple should use 'cheap' (no ads) services to weaken Google's bread and butter.


     

    So you think the ultimate goal should be that only one brand of smartphone should be available?

  • Reply 16 of 54
    You do all realise that Duck Duck Go is only thin anonymising layer over Google search. The Adverts are still added to the results they are just being stripped out by DDG before you see them. The advertisers are still no doubt paying. The may be cheaper non targetted ads though.
  • Reply 17 of 54
    Google is at war with it's hardware OEMs. They are just too stupid and/or incompetent to understand that. Sergey explicitly said mobile phones should cost $50

    Look at just happened the last week with payments by Samsung and Google. Android is a clusterf***

    So begins the hollowing out of these manufactures. Less profits will feed less investment. In five years or less, we'll have a complete repeat of what happened in PCs
  • Reply 18 of 54
    Quote:

    Originally Posted by Red Oak View Post



    So begins the hollowing out of these manufactures. Less profits will feed less investment. In five years or less, we'll have a complete repeat of what happened in PCs

     

    Very much so.

  • Reply 19 of 54
    flaneurflaneur Posts: 4,518member
    I have been thinking the same thing.

    Purchase Vimeo for a video platform. Invest in podcasters to use the video platform as well then promote podcasts as channels on Vimeo to draw traffic.

    An interesting note: In the past five years Apple has increased their data center space by nearly 1500% and are apparently preparing to double their data center space again. In the next five years Apple will be one of the largest "cloud service" providers in the world.

    Has there been anything published on Apple's data capacity growth vs. others, similar to what you lay out here? Or are you in a position to be the one to publish such info, perhaps? It really ought to be done. I have the impression that Apple's data space is still far less than Google, Amazon or Microsoft. Just an impression, because i've seen no hard information.

    As to your Vimeo point, that would seem to be a culture clash that would earn more anti-Apple hatred than advisable. For one thing, there's that prickly interface, with its sharp corners and goofy color. Apple would want to mess with that, and there would be shrieks of horror from the independent-geek, ugly-interface crowd, which is Vimeo's core user group, I gather. Simmering rage would doom the acquisition. Vimeo thrives on its independence, I think, and the janky interface is part of that.
  • Reply 20 of 54
    Quote:

    Originally Posted by TheWhiteFalcon View Post





    They also need to help out MS. I'm not saying with money, but Windows Phone is on life support. They need to bolster that as an alternative to Android (the world will never be 100% Apple no matter how much people delude themselves, and competition is good for innovation). Throwing some exclusive apps that direction (and not on Anderoid) could help. (Example: allowing iMessage integration, etc).

     

    MS... what a sad sad mess in mobile.

     

    Just think... that bald headed moron was in charge of a company that makes money hand over fist, sells an operating system that had close to a monopoly and he couldn't come up with a strategy to make MS number one in mobile.

     

    He should have been fired in 2008.

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