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Isn't Counterpoint Research a company owned by Apple?
No, seriously, Tim Cooks works the night shift for Counterpoint Research.
No, no, seriously, the iPhoneX is doomed this year. Too many people already own it and Apple can't take anymore market share profits.
Seriously, good on Apple.
I am glad they are not above 100% anymore. That was hurting my head.
If this is based on that same "measurement" where you offset the losses for everyone else in the industry then that means Apple is losing ground. I hope that's not the case. I don't recall where that 100%+ came from, but I thin it's been several years since I've read them on this site.
You may be correct with your losing ground idea.
Chinese brands are pushing their profits up and that is at the expense of someone (probably a bit from everyone).
This article (link below) is also from Counterpoint and, more importantly, wasn't from a peak quarter:
From the 100%+ numbers, Apple seemed to be losing ground quite quickly (60% Q317 per Counterpoint above) but has rebounded a little it seems due to the X. Meanwhile, sales remain largely flat YoY. As the iPhone X was only on sale for 8 weeks in the quarter, some leftover demand may have spilt over into the quarter that is ending now.
This is news but I'm not sure it's good news for some users who may be paying simply to keep profits up. That's something each user has to evaluate and decide for themselves.
It would be nice to have a link to the source, I couldn't find one in the article although it wasn't hard to find online but only the cover statement is available without a subscription.
Where are they getting this data from considering Apple doesn’t provide sales, revenue or profits by iPhone model? Also how do they know what the profits are for the smartphone industry? What companies provide profit data just for their smartphones?
Same place they get their predictions of doom, supply chain checks. I guess they can also monitor which phones are on the network at any given time. Either way it’s just SWAG and not a very good one to boot.
The iPhone X failure narrative seems to be predicated solely on the belief that people are unwilling to pay a higher price for something they want. I think it fair to assume that a large portion of Apple's existing market share is not sensitive to price. Wall Street seems unable to wrap their collective heads around this, which is strange as they don't seem to have that problem with high end car markerS. Patiently sitting on a bunch of call options waiting for reality to bear its fruits.
Goes to show how overpriced the iPhone X is compared to bill of materials.
Apple know how to cream in the money from the public, but these profit margins can't last, just a short term ploy to increase revenue to counteract sliding sales volumes.
How much of that apple profit goes to suppliers though, which would include a large chunk to Samsung?
Based on your post, time to take some basic econ classes. Since you are desperately flailing to find something to bash Apple about in this news, you've got some work to do. Let us help you out. First, none of Apple's profit goes to suppliers. Profit is net income determined after expenses, e.g. what they paid to suppliers. You're confusing profit with revenue. Second, the reporting period was a week shorter this past quarter, so when you compare comparable periods, sales actually increased. Oops. Finally, when a company has maintained historically high "profit margins" for decades, you won't be a very convincing basher when you call it a "short term" ploy and predict "it can't last."
Goes to show how overpriced the iPhone X is compared to bill of materials.
Apple know how to cream in the money from the public, but these profit margins can't last, just a short term ploy to increase revenue to counteract sliding sales volumes.
How much of that apple profit goes to suppliers though, which would include a large chunk to Samsung?
Profit is profit...what you mean "goes to suppliers". Suppliers' cost is a part of fixed cost (expense) which was already factored in...Econ 101, man.
Goes to show how overpriced the iPhone X is compared to bill of materials.
Apple know how to cream in the money from the public, but these profit margins can't last, just a short term ploy to increase revenue to counteract sliding sales volumes.
How much of that apple profit goes to suppliers though, which would include a large chunk to Samsung?
Profit is profit...what you mean "goes to suppliers". Suppliers' cost is a part of fixed cost (expense) which was already factored in...Econ 101, man.
I have the same thoughts on both counts. Assuming the numbers are accurate, they are quite impressive. Part of me says "that's a great profit margin for Apple, so good for them" and part of me says "wait - that also tells me they are way over-priced." Like you say, though, Apple is free to price their phones how they like and we are free to buy them how we like. If the IPX isn't worth it to you then you can get an 8 or a 7 or a 6s. Or a Samsung, or a used windows phone. Ultimately, you should buy the phone that fits your needs both in terms of functionality and price.
The other postive aspect of this for Apple is that if sales are off, they have room to drop the price while still making a profit.
Goes to show how overpriced the iPhone X is compared to bill of materials.
Apple know how to cream in the money from the public, but these profit margins can't last, just a short term ploy to increase revenue to counteract sliding sales volumes.
How much of that apple profit goes to suppliers though, which would include a large chunk to Samsung?
Profit is profit...what you mean "goes to suppliers". Suppliers' cost is a part of fixed cost (expense) which was already factored in...Econ 101, man.
I have the same thoughts on both counts. Assuming the numbers are accurate, they are quite impressive. Part of me says "that's a great profit margin for Apple, so good for them" and part of me says "wait - that also tells me they are way over-priced." Like you say, though, Apple is free to price their phones how they like and we are free to buy them how we like. If the IPX isn't worth it to you then you can get an 8 or a 7 or a 6s. Or a Samsung, or a used windows phone. Ultimately, you should buy the phone that fits your needs both in terms of functionality and price.
The other postive aspect of this for Apple is that if sales are off, they have room to drop the price while still making a profit.
The decade-long success of the iPhone not only tells me the iPhone isn't overpriced, but it's arguably underpriced considering how long it can take before supply and demand balance out for new devices with presages in the millions. While this concept isn't new, the rising ASP supports my hypothesis.
Goes to show how overpriced the iPhone X is compared to bill of materials.
Apple know how to cream in the money from the public, but these profit margins can't last, just a short term ploy to increase revenue to counteract sliding sales volumes.
How much of that apple profit goes to suppliers though, which would include a large chunk to Samsung?
Profit is profit...what you mean "goes to suppliers". Suppliers' cost is a part of fixed cost (expense) which was already factored in...Econ 101, man.
I have the same thoughts on both counts. Assuming the numbers are accurate, they are quite impressive. Part of me says "that's a great profit margin for Apple, so good for them" and part of me says "wait - that also tells me they are way over-priced." Like you say, though, Apple is free to price their phones how they like and we are free to buy them how we like. If the IPX isn't worth it to you then you can get an 8 or a 7 or a 6s. Or a Samsung, or a used windows phone. Ultimately, you should buy the phone that fits your needs both in terms of functionality and price.
The other postive aspect of this for Apple is that if sales are off, they have room to drop the price while still making a profit.
The decade-long success of the iPhone not only tells me the iPhone isn't overpriced, but it's arguably underpriced considering how long it can take before supply and demand balance out for new devices with presages in the millions. While this concept isn't new, the rising ASP supports my hypothesis.
I am frankly more comfortable with 86% than 103%, as the latter didn't make much sense.
If all other device makers - with some exceptions - continue to make few or no profits you will expect a reduction in the number of device manufacturers. And this may well be Apple's medium term strategy, to see the rest of them exit leaving a few fairly high end competitors.
I believe in fact Apple has two distinct strategies, as distinct from their sole flagship days of yesterday and last years model.
Firstly increase the price of the top end model as update cycles lengthen. This keeps profit per year fairly safe. Secondly introduce a lower end model to sweep up the medium priced models ( by the standards of the market) to maintain share. Thats the SE. Marketshare is important for a company whose growth will be allied to services in the future.
Of course this means there needs to be a fairly wide differentiator between the capability of the two models, or it results in cannibalisation. For that reason Apple won't for a while, and maybe never, have a low end device which has the full screen X look and feel.
Goes to show how overpriced the iPhone X is compared to bill of materials.
Apple know how to cream in the money from the public, but these profit margins can't last, just a short term ploy to increase revenue to counteract sliding sales volumes.
How much of that apple profit goes to suppliers though, which would include a large chunk to Samsung?
Profit is profit...what you mean "goes to suppliers". Suppliers' cost is a part of fixed cost (expense) which was already factored in...Econ 101, man.
I have the same thoughts on both counts. Assuming the numbers are accurate, they are quite impressive. Part of me says "that's a great profit margin for Apple, so good for them" and part of me says "wait - that also tells me they are way over-priced." Like you say, though, Apple is free to price their phones how they like and we are free to buy them how we like. If the IPX isn't worth it to you then you can get an 8 or a 7 or a 6s. Or a Samsung, or a used windows phone. Ultimately, you should buy the phone that fits your needs both in terms of functionality and price.
The other postive aspect of this for Apple is that if sales are off, they have room to drop the price while still making a profit.
The decade-long success of the iPhone not only tells me the iPhone isn't overpriced, but it's arguably underpriced considering how long it can take before supply and demand balance out for new devices with presages in the millions. While this concept isn't new, the rising ASP supports my hypothesis.
I am frankly more comfortable with 86% than 103%, as the latter didn't make much sense.
If all other device makers - with some exceptions - continue to make few or no profits you will expect a reduction in the number of device manufacturers. And this may well be Apple's medium term strategy, to see the rest of them exit leaving a few fairly high end competitors.
I believe in fact Apple has two distinct strategies, as distinct from their sole flagship days of yesterday and last years model.
Firstly increase the price of the top end model as update cycles lengthen. This keeps profit per year fairly safe. Secondly introduce a lower end model to sweep up the medium priced models ( by the standards of the market) to maintain share. Thats the SE. Marketshare is important for a company whose growth will be allied to services in the future.
Of course this means there needs to be a fairly wide differentiator between the capability of the two models, or it results in cannibalisation. For that reason Apple won't for a while, and maybe never, have a low end device which has the full screen X look and feel.
That's basically my view too. Go as high (or higher) as the market will allow without taking your eye off the middle and lower ground. I also think the SE serves an important market. Large screen phones were late coming for Apple and the main revenue generators but there are a lot of people that don't want large screens and the price point of the SE is attractive for many.
Where are they getting this data from considering Apple doesn’t provide sales, revenue or profits by iPhone model? Also how do they know what the profits are for the smartphone industry? What companies provide profit data just for their smartphones?
But Apple does give values like ASP (Average Selling Price) and total units sold. People then combine this data to form various equations like (%iPhoneX * medianPrice) + (%iPhone8 * medianPrice) + (%iPhone7 * medianPrice) + (%iPhoneSE * medianPrice) = ASP; %iPhoneX+%iPhone8+%iPhone7+%iPhoneSE=100%. They make some educated guesses based on web analytics and come up with a range of potential values.
So it’s basically all a guess. Which is what I assumed. What is the point of analysis like this that depends so much guessing and estimating?
Comments
Chinese brands are pushing their profits up and that is at the expense of someone (probably a bit from everyone).
This article (link below) is also from Counterpoint and, more importantly, wasn't from a peak quarter:
https://www.counterpointresearch.com/chinese-brands-mobile-handset-profit-crossed-us1-5-billion-first-time-single-quarter/
From the 100%+ numbers, Apple seemed to be losing ground quite quickly (60% Q317 per Counterpoint above) but has rebounded a little it seems due to the X. Meanwhile, sales remain largely flat YoY. As the iPhone X was only on sale for 8 weeks in the quarter, some
leftover demand may have spilt over into the quarter that is ending now.
This is news but I'm not sure it's good news for some users who may be paying simply to keep profits up. That's something each user has to evaluate and decide for themselves.
It would be nice to have a link to the source, I couldn't find one in the article although it wasn't hard to find online but only the cover statement is available without a subscription.
https://www.counterpointresearch.com/iphone-x-alone-generated-35-total-handset-industry-profits-q4-2017/
Looking at just one quarter, and especially Apple's peak quarter provides a rather distorted image. Annual numbers would give more insight.
From the above linked statement:
- Huawei was the leading brand among all the Chinese brands, withprofit increasing 59% YoY.
- With an increased mix of flagship sales for key Chinese brands, we expect profit share of Chinese players to grow in the coming quarters.
Huawei also saw a massive jump in sales YoY.The other postive aspect of this for Apple is that if sales are off, they have room to drop the price while still making a profit.
If all other device makers - with some exceptions - continue to make few or no profits you will expect a reduction in the number of device manufacturers. And this may well be Apple's medium term strategy, to see the rest of them exit leaving a few fairly high end competitors.
I believe in fact Apple has two distinct strategies, as distinct from their sole flagship days of yesterday and last years model.
Firstly increase the price of the top end model as update cycles lengthen. This keeps profit per year fairly safe.
Secondly introduce a lower end model to sweep up the medium priced models ( by the standards of the market) to maintain share. Thats the SE. Marketshare is important for a company whose growth will be allied to services in the future.
Of course this means there needs to be a fairly wide differentiator between the capability of the two models, or it results in cannibalisation. For that reason Apple won't for a while, and maybe never, have a low end device which has the full screen X look and feel.
• https://en.wikipedia.org/wiki/Economic_equilibrium