Apple's iPhone reaps dominant 92% of handset industry's profits

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Comments

  • Reply 21 of 90
    gatorguygatorguy Posts: 23,252member
    kevt wrote: »

    This is the other reason the "profit" analysis is so flawed. Someone is making significant profits from the sale of Android phones and it's Google.

    <span style="line-height:1.4em;">What makes the iPhone (or Mac) experience outstanding is that Apple do both the hardware and software/services so they are well integrated and optimised. When you buy an android smartphone you are buying a Samsung-Google, LG-Google, HTC-Google hybrid device. Sure Google go about taking their pound of flesh with a different privacy-invasive ad-serving business model. But their profits (not in the same </span>
    league<span style="line-height:1.4em;"> as apple</span>
    ;) <span style="line-height:1.4em;">) should still be weighed in the scheme of things to make any percentage profit figures meaningful.</span>
    Why should anyone who's not an investor care at the moment?

    If there's companies building smartphones for year after year and still doing so then common sense would say in most cases they do so because it's profitable to their overall business. I've read in recent articles that Samsung, LG, Sony, Xiaomi, ZTE, and Lenovo all claim to have profitable smartphone businesses. That's probably why they're still in it. Others may be break-even on handsets but making things profitable with related accessories, services or app revenue. Then there's some who may not be seeing any profit at all or perhaps even losses. Unless they're in it for competitive reasons that benefit their other businesses then I'd imagine they'll dispose of the smartphone divisions at some point, and probably no one will even notice.

    In any event buyers see benefits from increased competition bringing improved features and hardware along with moderate retail pricing, so having numerous players is a good thing isn't it? IMO if 950 of the currently estimated 1000 smartphone companies exit the business then it's time for concern perhaps. Thus far it hasn't seemed to harm the pace of innovation.
  • Reply 22 of 90
    kevt wrote: »
    rmb0037 wrote: »
    THIS is what matters. Keep your marketshare. I'd rather have the profits so when the market craps out Apple will still be standing strong.

    Matters to whom? To shareholders, obviously. Maybe also to the countries receiving tax revenue on profit.
    But, simply as a user of I'd prefer to see marketshare than profit. Marketshare means greater support for a device by developers, third parties, it means that the device becomes the standard.

    By your logic Samsung should offer better support with developers rushing to write for Samsung HW and Samsung being some kind of "standard."

    The funny thing is all those statements belong to Apple! This isn't the 1980s. Apple is the standard to beat, Apple is the platform to write for. While Apple makes the bulk of the profits, they also spare no expense to make the best hardware while not priced much above other shit-phones to be competitive as well.
  • Reply 23 of 90
    tmaytmay Posts: 5,457member
    Quote:

    Originally Posted by kevt View Post

     

     

    Matters to whom? To shareholders, obviously. Maybe also to the countries receiving tax revenue on profit.

    But, simply as a user of I'd prefer to see marketshare than profit. Marketshare means greater support for a device by developers, third parties, it means that the device becomes the standard.

     

    In fact it's kind of perverse for non-shareholding customers to take joy in how much profit a company is making out of them!

     

    This story (and those like it we've endured) are deeply flawed in the way they treat loss as negative profit, which gives silly figures. Most people would understand "percentage profit", as that proportion of profits made - loss isn't profit so it would not be included in the calculation.

     

    Apple do well enough in these figures anyway.

     

     

     

    This is the other reason the "profit" analysis is so flawed. Someone is making significant profits from the sale of Android phones and it's Google.

     

    What makes the iPhone (or Mac) experience outstanding is that Apple do both the hardware and software/services so they are well integrated and optimised. When you buy an android smartphone you are buying a Samsung-Google, LG-Google, HTC-Google hybrid device. Sure Google go about taking their pound of flesh with a different privacy-invasive ad-serving business model. But their profits (not in the same league as apple ;)) should still be weighed in the scheme of things to make any percentage profit figures meaningful.




    1) Apple sells more than 200 million iPhones, and iOS devices probably near 300 million, per year. That's a big enough market to sustain and provide the benefits to developers.

     

    2) Google isn't making much of anything from Android, and even the mobile advertising income is pretty weak, so it's probably a tossup of whether Samsung or Google makes more from Android. My money is on Samsung, even as their market is tanking, to actually generate the highest level of Android os income, followed by Google, and MS (IP licensing).

  • Reply 24 of 90
    He is here. Prepare this thread to be boarded.
  • Reply 25 of 90
    schlackschlack Posts: 708member
    if they have 92% of the profits...how do they increase their revenue substantially from here?
  • Reply 25 of 90
    schlackschlack Posts: 708member
    if they have 92% of the profits...how do they increase their revenue substantially from here?
  • Reply 27 of 90
    radarthekatradarthekat Posts: 3,399moderator
    kevt wrote: »
    Matters to whom? To shareholders, obviously. Maybe also to the countries receiving tax revenue on profit.
    But, simply as a user of I'd prefer to see marketshare than profit. Marketshare means greater support for a device by developers, third parties, it means that the device becomes the standard.

    In fact it's kind of perverse for non-shareholding customers to take joy in how much profit a company is making out of them!

    This story (and those like it we've endured) are deeply flawed in the way they treat loss as negative profit, which gives silly figures. Most people would understand "percentage profit", as that proportion of profits made - loss isn't profit so it would not be included in the calculation.

    <span style="line-height:1.4em;">Apple do well enough in these figures anyway.</span>


    This is the other reason the "profit" analysis is so flawed. Someone is making significant profits from the sale of Android phones and it's Google.

    <span style="line-height:1.4em;">What makes the iPhone (or Mac) experience outstanding is that Apple do both the hardware and software/services so they are well integrated and optimised. When you buy an android smartphone you are buying a Samsung-Google, LG-Google, HTC-Google hybrid device. Sure Google go about taking their pound of flesh with a different privacy-invasive ad-serving business model. But their profits (not in the same </span>
    league<span style="line-height:1.4em;"> as apple</span>
    ;) <span style="line-height:1.4em;">) should still be weighed in the scheme of things to make any percentage profit figures meaningful.</span>

    Profits allow a company to dream big, to plow money into R&D, to utilize prohibitively expensive manufacturing processes that result in better build quality, to power their data centers with renewable energy, to create initiatives like ResearchKit, to develop a new and efficient and rapid development environment like Swift, then open source it for competitors to use, to advance mobile technologies like the first 64-bit processor in a smartphone, like Metal for higher graphics processing performance, like handsets that deliver smooth performance at meaningfully lower power requirements, and by producing those in quantities of hundreds of millions thereby conserving enormous amounts of energy versus the power required for the daily charging of the same number of competing phones. Etc.

    As to including Google's profits, then you'd need to also include Apple's profits from iTines, from the App Store, etc, all of which are due to hardware sales. Should we also include part of FedEx's profits for having delivered my iPhone to my door? Absurdism.
  • Reply 28 of 90
    tmaytmay Posts: 5,457member
    Quote:

    Originally Posted by Gatorguy View Post





    Why should anyone who's not an investor care at the moment?



    If there's companies building smartphones for year after year and still doing so then common sense would say in most cases they do so because it's profitable to their overall business. I've read in recent articles that Samsung, LG, Sony, Xiaomi, ZTE, and Lenovo all claim to have profitable smartphone businesses. That's probably why they're still in it. Others may be break-even on handsets but making things profitable with related accessories, services or app revenue. Then there's some who may not be seeing any profit at all or perhaps even losses. Unless they're in it for competitive reasons that benefit their other businesses then I'd imagine they'll dispose of the smartphone divisions at some point, and probably no one will even notice.



    In any event buyers see benefits from increased competition bringing improved features and hardware along with moderate retail pricing, so having numerous players is a good thing isn't it? IMO if 950 of the currently estimated 1000 smartphone companies exit the business then it's time for concern perhaps. Thus far it hasn't seemed to harm the pace of innovation.

    The players are all waiting for all the other guys to exit; then profit!

     

    For China and a few other nations, even a "profitless" company is still employing people, so as long as it can sustain and or grow marketshare, why have them exit. Doesn't change the fact that the bulk of "innovations" touted by Android OEM's are really just feature differentiators, with little technical prowess in evidence. 

  • Reply 29 of 90
    fallenjtfallenjt Posts: 4,034member
    Quote:
    Originally Posted by JBDragon View Post



    This is really just getting silly!!! Why would all these company continue making Android phones when there's NO MONEY to be made doing it? Are they all hoping others would quit and then they could raise prices enough to start making money in the future?



    The only company that wins with Android is Google and I think they still make more money from iOS users then Android.



    These fandroids still don't seem to get it about Market Share. If all things were being equal, then sure, it would matter. If company's were making near the same profit as Apple, then Apple would only have around 20% of the Smartphone profits according to Market Share, right? Yet now it's gotten up to 92% of the profits while only have 20% of the Global Market Share. That's really pretty sad for Android!!! 92%!!! Most of the rest goes to Samsung and they're dropping fast. Think about it, LG, Motorola, HTC and all the rest fighting over around 2%.



    People really thing if Nokia went with Android instead of Windows that things would be different? LOL!!! Windows has the same issues, but at least you have more of a chance because there's not a flood of Windows phones like with Android. If Windows took off, it wouldn't last either. Everyone else would jump on board and what profits were being made would disappear also.

    All android phones are flops...Selling at cost or even lost and make up by other means.

  • Reply 30 of 90
    fallenjtfallenjt Posts: 4,034member
    Quote:

    Originally Posted by jungmark View Post



    DOJ to investigate because Apple.



    Apple not only gets 92% of the profit but gets that without releasing cheap ass hardware that Wall Street inexplicably likes.

    And I was on CNET earlier on the  same news, Fandroids were just so quiet in there. It's funny that fandroids always had big mouths of everything related to Apple.

  • Reply 31 of 90
    gatorguygatorguy Posts: 23,252member
    fallenjt wrote: »
    And I was on CNET earlier on the  same news, Fandroids were just so quiet in there. It's funny that fandroids always had big mouths of everything related to Apple.
    The spelling is Phandroids. ;)
  • Reply 32 of 90
    fallenjtfallenjt Posts: 4,034member
    Quote:
    Originally Posted by schlack View Post



    if they have 92% of the profits...how do they increase their revenue substantially from here?

    Why not, profit can go above 100% meanings some can have negative profit too. Got it?

  • Reply 33 of 90
    radarthekatradarthekat Posts: 3,399moderator
    schlack wrote: »
    if they have 92% of the profits...how do they increase their revenue substantially from here?

    That's a reasonable question. The answer is, not by merely taking market share from other vendors, which they will, but by taking that market share while selling to those former Samsung, HTC, LG, Lenovo/Motorola, etc customers a higher quality product that carries a higher average selling price than the products they were previously purchasing. Apple will, as it has all along, increase the total spend in the smartphone market as more consumers come to see the greater value of an iPhone over competing smartphones.
  • Reply 34 of 90
    danielswdanielsw Posts: 906member
    Quote:

    Originally Posted by JBDragon View Post



    This is really just getting silly!!! Why would all these company continue making Android phones when there's NO MONEY to be made doing it? Are they all hoping others would quit and then they could raise prices enough to start making money in the future?

     

    Because there are a lot of people who buy them, misguided as they are. Applarently, few are considering future viability.

  • Reply 35 of 90
    danielswdanielsw Posts: 906member
    Quote:

    Originally Posted by schlack View Post



    if they have 92% of the profits...how do they increase their revenue substantially from here?



    As if there's a set amount of profit to be made? Nope. It's 92% of the profit currently being made, which is not to say that more profit can't be made. Even if Apple were making 100% of the profit, that doesn't mean that they can't make more money—simply by making more and more sales.

  • Reply 36 of 90
    brucemcbrucemc Posts: 1,541member
    Quote:

    Originally Posted by schlack View Post



    if they have 92% of the profits...how do they increase their revenue substantially from here?

    Well - moving aside the fact that this study isn't exactly "hard science" - this is only referring to % profit in current state.  Taking the data in this article, Apple only has 20% market share, so clearly room to grow overall sales, which increases revenue of course.  And build out the ecosystem.

     

    As more consumers in countries move up in class, the market for higher-end phones grows.

     

    Apple is making some huge increases YoY with iPhone 6 (sometimes as high as 50%), and this trend will continue with 6s, as the upgrades move to the larger phones.  After that, it will taper off, but Apple should still be able to grow iPhone business over next few years at an "average" rate of 15%/year or greater.

  • Reply 37 of 90
    chadbagchadbag Posts: 1,501member
    Quote:

    Originally Posted by kevt View Post

     

     

    Matters to whom? To shareholders, obviously. Maybe also to the countries receiving tax revenue on profit.

    But, simply as a user of I'd prefer to see marketshare than profit. Marketshare means greater support for a device by developers, third parties, it means that the device becomes the standard.

     


     

    Apple actually has a higher marketshare on premium smartphones than any other company or Android as a whole, as well, I believe.  Samsung sells the majority of premium Android smartphones and their sales numbers are much lower than the iPhone.  All the other premium Android device are just noise in the numbers.

  • Reply 38 of 90
    sirlance99sirlance99 Posts: 1,278member
    apple ][ wrote: »
    This 92% figure is just amazing! Certain people are always boasting about Android activation numbers and boasting about the numbers of garbage Android devices being sold? 

    Why even bother? They should all just throw in the towel. Everybody else besides Apple is not making a lot of profit. If Apple has 92% of ALL of the profits, then everybody else is just desperately fighting over the few crumbs that are left.

    They should all exit the business! Leave it to the professionals and the only people who know how to make great devices, like Apple! 

    Android should be abanonded as a useless and worthless experiment that didn't work out, and there should be no more Android devices manufactured ever again, because what's the point? There is no money in it.

    It's like running a soup kitchen for homeless people. Does anybody expect to get rich doing that?

    What a boring fucking world that would be to only have Apple to choose from for a mobile device. Extremely boring. To the point of the 1984 ad Apple is so famous for being against. I know in your small little bubble of a world that you only think Apple can do anything good and only use Apple but there are still billions of people who get along just fine without Apple or never want to use Apple. Competition is a good thing. Apple wouldn't be where they are today if it wasn't for other companies inventing the tech they use to make Apple products.

    I want Apple to continue to do well but no way in hell would I ever want them to be the only one. Plus the other companies are still making money otherwise they wouldn't continue to be building phones year after year.
  • Reply 39 of 90
    steven n.steven n. Posts: 1,225member
    kevt wrote: »
    This is the other reason the "profit" analysis is so flawed. Someone is making significant profits from the sale of Android phones and it's Google.

    <span style="line-height:1.4em;">What makes the iPhone (or Mac) experience outstanding is that Apple do both the hardware and software/services so they are well integrated and optimised. When you buy an android smartphone you are buying a Samsung-Google, LG-Google, HTC-Google hybrid device. Sure Google go about taking their pound of flesh with a different privacy-invasive ad-serving business model. But their profits (not in the same </span>
    league<span style="line-height:1.4em;"> as apple</span>
    ;) <span style="line-height:1.4em;">) should still be weighed in the scheme of things to make any percentage profit figures meaningful.</span>

    There is little indication Google is making any significant profits from Android and lots of data indicating they make significantly more off of iOS than Android even after TAC.
  • Reply 40 of 90
    asterionasterion Posts: 109member

    Er... Headline says "profits". Article says "operating income".

     

    These are not the same...

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