'An incredible money-making machine:' Apple's iPhone captures record 51% of global smartph...
For the first time ever, Apple's iPhone captured more than half of all global smartphone revenues in a single quarter, outperforming the rest of the industry on the strength of the premium-priced iPhone X.
Market tracking firm Strategy Analytics on Thursday issued its latest estimates on the smartphone space, finding that the global market hit an all-time high of $120 billion in the fourth quarter of 2017. Leading the way was Apple, which captured a record 51 percent global smartphone revenue share.
"Apple iPhone's average selling price is approaching $800 and almost three times higher than the overall industry average," Strategy Analytics Executive Director Neil Mawston said. "Apple iPhone is an incredible money-making machine."
Notably, while Apple's average selling price surged, the rest of the industry also saw their ASPs grow by 18 percent year over year. This was helped by the fact that the other revenue leader in the market, Samsung, grew ASP by 21 percent.
Last quarter Apple sold 77.3 million iPhones with an average selling price of $796.42, driving revenue to $88.3 billion. The best selling model in the quarter was the iPhone X, which carries a starting price of $999.
Notably, the holiday 2017 quarter was a full week shorter than the year prior, meaning the numbers would have been even more impressive with a direct comparison.
The results of that strong quarter pushed Apple to carry the lion's share of smartphone industry revenues worldwide. Repeated studies have shown that while Apple and Samsung turn a profit from mobile devices, many competitors operate at a loss, resulting in what is essentially a two-horse race.
Still, making some headway has been Chinese handset maker Huawei, which generated $8 billion in global smartphone revenue. That was enough to make it the third-largest vendor in the holiday quarter.
Still, Apple's revenues are seven times greater than Huawei, which focuses on low-end handsets with an average selling price of $205. Strategy Analytics Director Woody Oh said that if Huawei wants to grow its worldwide pricing revenues, it needs to find a way to grab additional marketshare in the lucrative U.S. market.
Market tracking firm Strategy Analytics on Thursday issued its latest estimates on the smartphone space, finding that the global market hit an all-time high of $120 billion in the fourth quarter of 2017. Leading the way was Apple, which captured a record 51 percent global smartphone revenue share.
"Apple iPhone's average selling price is approaching $800 and almost three times higher than the overall industry average," Strategy Analytics Executive Director Neil Mawston said. "Apple iPhone is an incredible money-making machine."
Notably, while Apple's average selling price surged, the rest of the industry also saw their ASPs grow by 18 percent year over year. This was helped by the fact that the other revenue leader in the market, Samsung, grew ASP by 21 percent.
Last quarter Apple sold 77.3 million iPhones with an average selling price of $796.42, driving revenue to $88.3 billion. The best selling model in the quarter was the iPhone X, which carries a starting price of $999.
Notably, the holiday 2017 quarter was a full week shorter than the year prior, meaning the numbers would have been even more impressive with a direct comparison.
The results of that strong quarter pushed Apple to carry the lion's share of smartphone industry revenues worldwide. Repeated studies have shown that while Apple and Samsung turn a profit from mobile devices, many competitors operate at a loss, resulting in what is essentially a two-horse race.
Still, making some headway has been Chinese handset maker Huawei, which generated $8 billion in global smartphone revenue. That was enough to make it the third-largest vendor in the holiday quarter.
Still, Apple's revenues are seven times greater than Huawei, which focuses on low-end handsets with an average selling price of $205. Strategy Analytics Director Woody Oh said that if Huawei wants to grow its worldwide pricing revenues, it needs to find a way to grab additional marketshare in the lucrative U.S. market.
Comments
The LTE iPad Pro I am typing this on was just a little under $1,100 and O cannot see spending that much on a phone. I would much rather the combination of LTE iPad and LTE Apple Watch and no iPhone. At some point, the general public may well realize the iPhone is soon to be redundant. Not yet, but soon.
With that said even the "garbage products" will generally allow texting, phone calls, web browsing, casual game playing, posting Facebook/Twitter, "other" social sites and a camera with video. I'd guess that pretty much covers what most folks use a smartphone for.
..and all this was possible even before the first iPhone. Doesn't mean they aren't garbage, relative to an iPhone (performance, build quality, OS, support, security, etc).
Those quarterly profits are impressive, but hardly reason to gloat, imo, given three premium Apple phones rolled out for holiday. Suffice it to say, I’m glad Apple is taking pause to clean up iOS. When I rummage around my iPhone X settings, it seems a hodgepodge, courtesy of a dozen committees with no head architect, and with some aspects of a casino (e.g. many defaults set to opt you in). But I appreciate the candor of the explanations of tradeoffs for iAds or Siri or iCloud interactions.
To me this is one of greatest challenge Apple faces. You get the feeling it wants to be more like Tencent and better monetize social networks and such. As a stockholder I say YES, finally! But as a customer, I wish for example they were some options to declutter Messages if you know you don’t wish to buy stickers games etc. when you have that open. (I'm especially pissed since attempted to back up Music Memos to iCloud and lost data locally in iPhone X and in cloud and app no longer working. Hopeful Apple Store can remedy tmrow.)
Long ago Apple recognized that, like everything else, the handset market will achieve saturation. From that point forward growth would be driven by stealing customers from competitors. This is the way of all product evolutions.
The problem with stealing customers from competing handset manufacturers is that Apple doesn't want that class of customer, and already has a lock on the high end. So what to do?
Develop an accessory ecosystem of products that augment/expand the mobile experience, with each new product doing SOMETHING better than the iPhone, thus expanding sales opportunities to iPhone customers.
Apple's Other Products revenue is projected to grow 30+% YoY during FY2018. That's a higher growth rate than Services. The combination of the two they became the #2 (behind the iPhone) revenue stream for Apple during FY2015, and as a category have been growing since at 20+% YoY.
Today the point of selling iPhones is to sell more premium Services and premium Other Products.
We may see iPhone unit sales growth in the future, but it won't be much (2% - 3%). ASPs on the other hand will grow organically (an additional $100 over the next 3 years without raising prices) as less expensive LED iPhones are flushed out of the iPhone product lineup.
Apple's share of handset revenue and profits is going to increase greatly over that 3 year period.
What Apple is doing makes a lot of financial sense by skimming the most profits and letting other companies have the leftovers. Wall Street simply doesn't like that type of passive thinking. Wall Street greed is always about one company becoming the dominant player which means having the largest market share percentage. Market share percentage puts the big investors into that guaranteed winner's zone. All Apple does with that smallish market share percentage is constantly generate "investor doubts" about whether Apple can survive and ultimately causes that low P/E. Apple can't even hold that P/E above 18 before it comes crashing down from all those "doubts." Apple needs to create at least one strong product or service with dominant market share. Greedy investors always have "doubts" unless they know they're working with a deck stacked in their favor. Apple never seems to acquire that stacked deck. Amazon is playing with a fully stacked deck where investors believe they can't possibly lose which accounts for that 230 P/E.
Eventually, Amazon is going to pass Apple in market cap value because of Amazon's investor confidence. They'll keep pouring money into Amazon because they're anticipating that huge payoff when Amazon puts all other retailers (and other sectors) out of business. Meanwhile, Apple's revenue growth will continue to stagnate and any potential Apple investor will look elsewhere for better growth. I suppose Tim Cook doesn't care much about Apple's continued growth as he's got other things that are more important to him. He's no Jeff Bezos.
I don't think anyone on Wall Street believes that considering Apple's P/E of 16.x. That's not the sort of major tech company P/E driven by investor confidence. As far as I can tell, that's a zero growth P/E being given to Apple. Basically, a pure lack of confidence. Look at any other major tech company and you'll see what type of P/Es they're generating. Nothing close to Apple's loser-class P/E. Apple's P/E is closer to HPQ than it is to MSFT or GOOG. That's telling you what Wall Street thinks of Apple's gains.
Of course, Warren likes value.