What do you mean "by profits"? How do we know how much profit Apple, Google or anyone else are making off their app stores? Apple has never disclosed App Store profits, I don't think has anyone else has either. I don't understand the weird obsession this site has with how much profit Apple makes as though that's all that's matters or all that anyone should care about. This isn't a biggest dick contest. I don't own Apple products because Apple makes the most profit.
Anecdotal evidence from pretty much everyone who has put out an app on the iOs and GooglePlay stores pretty much.
eg, let's say I put out an app called "Slap the Troll", and simultaneously drop about a million dollars in advertising so that it's the #1 best selling app in the app store that month, beating out various crappy clones of candycrunch,goldfarmville,and testybirds. All things considered equal, I get 1 million downloads on iOS and 1 million downloads on Android, of which 85% of the players on iOS drop at least $10 to play the full version, and only 5% of Android Amazon and 10% Google Play users do. Everyone else over 1 million on Android has pirated the game and isn't paying for it.
You can see this readily online with every popular game. Games that have monetization schemes typically are pirated by Android users and then hacked to have unlimited in-game currency so they can just beat the game in about 5 minutes.
This is also why any real investment in games (eg Nintendo) on mobile segregates the iOS and Android users so that the Android users don't destroy their profitable iOS users who are more likely to continue to pay money for their game. It's in the best interests of iOS developers to not even port their games to Android unless they have an online component that doesn't work with pirated copies.
Honestly... someone needs to call these clowns out for what is basically flat-out lying. Gone of the days of journalism based on facts and hard data.
Couldn't agree more. Such lazy reporting, based on such cheap data.
Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
You would have to define 'serious' to be able to name a company. Would $200,000,000 be serious profit?
Inside Apple, is the Mac line bringing in serious profit and if it isn't (when compared to iDevice revenues) does it really matter?
If you're making money, surely that's a good start. If you're making money and taking clients away from potential competitors, its even better. If you strive to improve your results then it's better still.
Fair enough.
Now tell us what companies are making profit on Android.................I'll be waiting
That $200M in profit is an estimate by a trade group.
Huawei is a private company so they never release smartphone profits. That $200M figure is a total GUESS by Strategy Analytics. Its a total bull crap number based on zero facts. The only data they have is total number of phones sold by Huawei and revenue. Both which could be total lies by a China brand. There is no data on expenses, R&D, ect. So no way to accurately measure profit.
Strategy Analytics is using ESTIMATE to calculate profit. Estimates on cost of the phone, labor, marketing, R&D, ect. Huawei had about $6 billion in smartphone sales. If Strategy Analytics ESTIMATE was just off by 5% then Huawei would have had a $100M loss instead of a $200M gain.
Before I reply in full please give me your views on this observation:
You have previously stated on many occasions that Apple sucks up the vast majority of smartphone profits. Now you are saying Huawei never releases its profits. If the figures are unknown, is your claim that Apple sucks up virtually all smartphone profits really that it only sucks up virtually all declared profits and doesn't apply to non-declared profits?
I mention this because Huawei sells gazillions of phones a year.
Its pretty obvious that Apple makes the majority of profits. Just look at the price of iPhones versus the average Huawei phone. Then look at Apple's finanical statements and see the $50 billion in annual profit. Apple does report iPhone revenue. And the CEO has said in the past that iPhone margins are much higher than the overall company gross profit margin. So its easy to calculate the floor of iPhone profits.
Huawei might sell a ton of phones, but that means nothing. Many cheap China brands sell a ton of phones and make zero profit.
Again show me SOLID PROOF that any Android maker makes profit besides Samsung? There is ZERO SOLID PROOF.
Huawei has never given a number of how much profit they made on phones. Neither has Xiaomi, Vivo, Oppo, and all crappy piece of dung China brands.
Once again you fail to answer a direct question. However, in your partial answer to fall back on guestimates yourself ('pretty obvious').
'Pretty obvious' would have been acceptable if you hadn't rejected the previous article for being an estimate. Once you did that, your own counterargument fell apart.
My question still stands though. Are we including Huawei in the profit calculations when we say Apple gets virtually all the profit, or not? If we are, how are we doing it if the numbers aren't ever disclosed?
I only count verified smartphone profits. I would count 'estimates' by some trade group.
1. Apple - Verified profits in the TENS OF BILLIONS
2. Samsung - Verified profits in the BILLIONS
3. Huawei - no verification. $0
4. LG, Sony, HTC - no verification $0
5. Vivo, Oppo, Xiaomi - no verification $0
So the only 2 companies that have verified profits are Apple and Samsung.
So we can draw a conclusion from your claims. From the entire industry you base your claims on information from just two companies and openly admit that you have absolutely no idea how the rest of the industry is performing and in spite of that you still feel comfortable in trashing the figures in an article (basically calling the numbers pie in the sky) while providing your own counter numbers which you openly admit are based on very little fact.
To be clear. I am not even disputing that Apple dominates profits. I'm disputing how you put together your argument. The OP asked for ONE company making 'serious profit'. To provide an answer, serious profit would have to be defined first but then you jumped in with both feet with unsupported and insupportable 'facts' so I put Huawei on the table.
I suggest you wait for Huawei's 2016 Annual (of course, audited) Report then see if your 'facts' have any bearing on reality.
As a heads up I will provide you with some info that may be of use.
In the middle of last year Huawei took a strategic decision to focus on profit instead of volume as they had largely met the market share goals they had set. The new focus was to be on premium (higher margin) phones. That strategic decision is what handed the volume crown to Oppo. Estimates put the run up to the end of 2016 as around 60% of Huawei sales in the higher end (higher margin) segment so let's wait and see what they reveal in their statement nof earnings for 2016. All of this without even having a real presence in the US. Not too shabby.
Apple has a complete and independent ecosystem from Android OS, and so far, these "strategic decisions" by a particular Android OEM don't seem to make much difference in the profit capture split between the two ecosystems. Ultimately, targeting the premium segment is necessary, but leads to more of the same race to the bottom, this time in all the segments, top to bottom. That can't be good for OEM's.
To follow up regarding Huawei (for whatever reason the system won't let me quote my previous post)...
Huawei's annual report is out. When it comes to its consumer business (which is mostly its smartphones), it reported more or less what we were expecting. Revenue was up 44% YoY and smartphone units were up 29% YoY. That suggests that its product mix continued to improve, but I question to what degree it did as Huawei didn't mention what portion of its smartphone sales were mid-range or high-end. In the past Huawei has given a percentage on that to emphasize its growth in those markets. Huawei also didn't give a number for total device shipments, which suggests to me that devices other than smartphones (e.g. tablets and wearables) didn't grow as much as smartphones did.
Total consumer business revenue was $26 billion, with 139 million smartphones shipped. Probably $20 billion or so of that total revenue came from smartphones (that number isn't given, but we can ballpark it within a couple billion or so). As for smartphone profits, we or course don't know what they were. I'd guess that they are still pretty small. Does that mean a few hundred million or a billion or so? Who knows? But based on changes in Huawei's company-wide gross margins as revenues from its consumer business have grown as a portion of its total revenues, I don't think its gross margins from its consumer business could be much higher than 20%, and I suspect they are lower. At this point Huawei is selling a fair number of mid and high-tier smartphones, but it's still selling a lot of low-end smartphones which would have lower margins and bring the aggregate margin down.
Huawei's company-wide profits were pretty much flat, despite significant revenue growth. That is in part because Huawei's R&D spending continued to be very high. That and high SG&A spending keeps its operating margin pretty low. For comparison, Huawei spent more on R&D in 2016 than Apple did (in its FY 2016) even though Huawei had only about a third of Apple's total revenue. Much of that R&D spending no doubt has to do with Huawei's carrier business rather than its consumer business. But those operational expenses (R&D and SG&A) more so than gross margins is what separates Apple from companies like Huawei and Samsung when it comes to overall profitability. Their (company-wide) gross margins are similar, but Apple's operating margins are much better. Huawei spent 14.6% of its total revenue on R&D and another 16.6% of it on SG&A. Apple spent 4.7% and 6.6%.
Comments
eg, let's say I put out an app called "Slap the Troll", and simultaneously drop about a million dollars in advertising so that it's the #1 best selling app in the app store that month, beating out various crappy clones of candycrunch,goldfarmville,and testybirds. All things considered equal, I get 1 million downloads on iOS and 1 million downloads on Android, of which 85% of the players on iOS drop at least $10 to play the full version, and only 5% of Android Amazon and 10% Google Play users do. Everyone else over 1 million on Android has pirated the game and isn't paying for it.
You can see this readily online with every popular game. Games that have monetization schemes typically are pirated by Android users and then hacked to have unlimited in-game currency so they can just beat the game in about 5 minutes.
This is also why any real investment in games (eg Nintendo) on mobile segregates the iOS and Android users so that the Android users don't destroy their profitable iOS users who are more likely to continue to pay money for their game. It's in the best interests of iOS developers to not even port their games to Android unless they have an online component that doesn't work with pirated copies.
Huawei's annual report is out. When it comes to its consumer business (which is mostly its smartphones), it reported more or less what we were expecting. Revenue was up 44% YoY and smartphone units were up 29% YoY. That suggests that its product mix continued to improve, but I question to what degree it did as Huawei didn't mention what portion of its smartphone sales were mid-range or high-end. In the past Huawei has given a percentage on that to emphasize its growth in those markets. Huawei also didn't give a number for total device shipments, which suggests to me that devices other than smartphones (e.g. tablets and wearables) didn't grow as much as smartphones did.
Total consumer business revenue was $26 billion, with 139 million smartphones shipped. Probably $20 billion or so of that total revenue came from smartphones (that number isn't given, but we can ballpark it within a couple billion or so). As for smartphone profits, we or course don't know what they were. I'd guess that they are still pretty small. Does that mean a few hundred million or a billion or so? Who knows? But based on changes in Huawei's company-wide gross margins as revenues from its consumer business have grown as a portion of its total revenues, I don't think its gross margins from its consumer business could be much higher than 20%, and I suspect they are lower. At this point Huawei is selling a fair number of mid and high-tier smartphones, but it's still selling a lot of low-end smartphones which would have lower margins and bring the aggregate margin down.
Huawei's company-wide profits were pretty much flat, despite significant revenue growth. That is in part because Huawei's R&D spending continued to be very high. That and high SG&A spending keeps its operating margin pretty low. For comparison, Huawei spent more on R&D in 2016 than Apple did (in its FY 2016) even though Huawei had only about a third of Apple's total revenue. Much of that R&D spending no doubt has to do with Huawei's carrier business rather than its consumer business. But those operational expenses (R&D and SG&A) more so than gross margins is what separates Apple from companies like Huawei and Samsung when it comes to overall profitability. Their (company-wide) gross margins are similar, but Apple's operating margins are much better. Huawei spent 14.6% of its total revenue on R&D and another 16.6% of it on SG&A. Apple spent 4.7% and 6.6%.
EDIT: To add a link to Huawei's annual reports.