Apple continues to dominate with massive 86% share of handset industry profits
A new analysis of third-quarter handset industry operating profits estimates that Apple accounted for a massive 86 percent share, blowing away the competition as rivals such as Samsung saw their profit levels dip.
Analyst Michael Walkley of Canaccord Genuity issued a note to investors on Tuesday, a copy of which was provided to AppleInsider, in which he revealed his latest research, based on company reports and estimates. Walkely said that Apple's estimated 86 percent share of industry profits was simply "remarkable."
Apple's gains came at the cost of competitors, most notably Samsung, which was estimated to have accounted for just 18 percent of the industry's profits. That's the lowest total for Samsung since 2011, Walkley said.
Still, Apple and Samsung combined for more than 100 percent of the industry's total profits, because competitors such as Motorola and Microsoft actually lost share. In fact, other than Apple and Samsung, the only other company to have a positive value share in the September quarter was LG with 2 percent, according to Walkley.
HTC and BlackBerry are estimated to have accounted for 0 percent share in the quarter, essentially breaking even. And Motorola with an estimated mobile operating loss of $185 million is said to have accounted for -2 percent, while Microsoft's $341 million estimated lost in handsets gave it -4 percent of the industry's profit value share.
In all, Walkley estimates that the handset industry saw operating income drop 17.3 percent year over year. The analyst did note that the increasing popularity of Chinese smartphone makers are not included in his estimates, due to a lack of available data on sales and profits.
Walkley also conducted a series of surveys in October in the U.S. which revealed that the iPhone 6 and iPhone 6 Plus were by far the top selling smartphones at all four major American carriers. The survey also found that users are gravitating toward higher-capacity iPhone models, which he believes will bode well for the device's average selling price in the current December quarter.
"We believe Apple is experiencing a record iPhone 6 upgrade cycle due to very strong replacement sales as well as from high-tier smartphone market share gains from Android," he said. "We believe these trends should result in very strong (fourth quarter of calendar 2014) smartphone sales and share gains for Apple.
Canaccord Genuity has maintained its $120 price target and "buy" rating for AAPL stock.
Analyst Michael Walkley of Canaccord Genuity issued a note to investors on Tuesday, a copy of which was provided to AppleInsider, in which he revealed his latest research, based on company reports and estimates. Walkely said that Apple's estimated 86 percent share of industry profits was simply "remarkable."
Apple's gains came at the cost of competitors, most notably Samsung, which was estimated to have accounted for just 18 percent of the industry's profits. That's the lowest total for Samsung since 2011, Walkley said.
Still, Apple and Samsung combined for more than 100 percent of the industry's total profits, because competitors such as Motorola and Microsoft actually lost share. In fact, other than Apple and Samsung, the only other company to have a positive value share in the September quarter was LG with 2 percent, according to Walkley.
HTC and BlackBerry are estimated to have accounted for 0 percent share in the quarter, essentially breaking even. And Motorola with an estimated mobile operating loss of $185 million is said to have accounted for -2 percent, while Microsoft's $341 million estimated lost in handsets gave it -4 percent of the industry's profit value share.
In all, Walkley estimates that the handset industry saw operating income drop 17.3 percent year over year. The analyst did note that the increasing popularity of Chinese smartphone makers are not included in his estimates, due to a lack of available data on sales and profits.
Walkley also conducted a series of surveys in October in the U.S. which revealed that the iPhone 6 and iPhone 6 Plus were by far the top selling smartphones at all four major American carriers. The survey also found that users are gravitating toward higher-capacity iPhone models, which he believes will bode well for the device's average selling price in the current December quarter.
"We believe Apple is experiencing a record iPhone 6 upgrade cycle due to very strong replacement sales as well as from high-tier smartphone market share gains from Android," he said. "We believe these trends should result in very strong (fourth quarter of calendar 2014) smartphone sales and share gains for Apple.
Canaccord Genuity has maintained its $120 price target and "buy" rating for AAPL stock.
Comments
Yeah but analyst
Touché.
Clearly, the solution is for Android makers to price their phones even cheaper!
That ought to generate more profit for them!
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Their bottom of the barrel strategy is not working out for them. They obviously need to race to the bottom even quicker than before!
Clearly, the solution is for Android makers to price their phones even cheaper!
That ought to generate more profit for them!
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Their bottom of the barrel strategy is not working out for them. They obviously need to race to the bottom even quicker than before!
What's the age old saying;
They'll make it up in volume. /s
Of course. iOS leads in every single metric EXCEPT market share. More App revenue for developers, more developer interest, more App downloads, domination of Enterprise usage, more online shopping, more content purchases. Yup, basically everything that counts.
And by the way. Apple is just going to kill it this holiday season, with the new iPhones, new iPads etc.
I was reading a few reviews of the Nexus 9 yesterday, what complete garbage! It's laggy and stutters and the back case is flexible. It feels cheap and yet again, Fandroids the world over have been overhyping the device, and yet again, it turns out that what they were claiming was complete BS!
STILL the only major company in tech that doesn't have its head up its ass.
Consistently dominating all the right metrics.
The iPhone and iOS also lead in many areas of market share.
Eventually Apple will have 103% of the profits and they’ll be sued by the European Union for temporally relativistic tax evasion.
It's not impossible that Apple might have more than 100% of the profit share eventually. That's insane, really.
I have a solution for companies other than Apple: stop making phones. They're not profitable for you. Make something else.
In other words, a stellar Android tablet.
I think Google Play might be leading in app downloads. Otherwise I think you've nailed it.
-Steve
I think Google Play might be leading in app downloads. Otherwise I think you've nailed it.
Only of you include malware downloads in the google play figures...
/s
What a total and utter lie. Saying the Nexus matches the Air2 in performance. Does not matter though. People vote with their $$$. I was almost tempted to comment in the article but refused knowing the author would get 10 cents from my comment.
He's obviously totally clueless or perhaps a paid shill.
I have read at least three reviews that backs up my claims of it being not a good device at all.
If you read the comments sections of those reviews, like on the Verge, it's full of very angry Fandroids.