Apple Captures Record 91 Percent of Global Smartphone Profits: Research (cnbc.com)

Apple has captured a record share of profits in the global smartphone industry in the third quarter, according to new research, despite grappling with falling iPhone sales. From a report on CNBC:Third-quarter smartphone operating profit reached $9 billion globally of which Apple took 91 percent of the share, Strategy Analytics said in a note on Tuesday. This amounts to $8.19 billion for the U.S. technology giant. Apple has the highest profit margins in the smartphone industry thanks to a loyal brand following and the ability to price its iPhones at a premium. And the figures come even after Apple reported three straight quarters of iPhone sales declines. Sat a long way behind Apple is China's Huawei which managed to grab 2.4 percent of global operating profit share in the smartphone market, accounting for $200 million, according to Strategy Analytics. Chinese start-up brands Vivo and OPPO are in third and fourth place, both capturing 2.2 percent of global smartphone profit each.

Comments

Sigh.

[ledow]

You DO NOT want the company you are buying things from to make record profits.

It means that they are taking a higher percentage of your money than any of their competitors.

You might want the company to have the greatest sales figures (not true of Apple), or the greatest proportional re-investment (not true of Apple), or the greatest customer base even (not true of Apple).

But, like walking through Las Vegas... all that show and money to blow on things comes from one source... people like you paying over the odds for their products.

Re:Sigh.

[vux984]

If 2 companies are splitting the profits taken in a market 50/50 and one does a recall that wipes out their profit for a quarter, then the other company is making the same amount of money... but now has "100%" of the profit.

This news is just a reflection of Samsung taking a giant loss on the Note7.

Re:Sigh.

[Oswald McWeany]

Apple products are never broken, they're just held incorrectly.

Re:Sigh.

[vux984]

"Canaccord Genuity analyst Michael Walkley said in a research report Sunday that Apple captured 75% of smartphone industry profits in the second quarter. But that's down from 84% in Q1 and 91% in Q2 2015, he said.

Apple's share of smartphone profits fell because of Samsung's improving profitability driven by streamlining its product lines along with strong demand for the Galaxy S7, Walkley said. Samsung's strong results are expected to continue in the third quarter ahead of the September launch of Apple's iPhone 7, he said."

"Samsung's share of smartphone industry profits improved to 31% in Q2, up from 22% in the first quarter and 19% in Q2 2015."

http://www.investors.com/news/...

Apple's profit share of the smartphone market was in steady decline, and Samsung and others were in ascension. The ONLY reason Apple is back up to 90%+ in Q3 is that Samsung's profit share evaporated in Q3 due to the recall expense. It's that simple.

"Sorry, yes."

Value for money

[sjbe]

You DO NOT want the company you are buying things from to make record profits.

As long as I'm getting what I consider good value for money I don't care at all if they are making a big profit. The only way Apple or any company makes a big profit is if people like what they are getting for the price. If it wasn't worth the price then they would be forced to charge less. Apple products are a completely discretionary purchase.

It means that they are taking a higher percentage of your money than any of their competitors.

Which is irrelevant if I am getting a higher value for my money as well. Obviously a lot of people think Apple gives better value for the money than the alternatives. You don't have to agree with them for yourself but that doesn't mean they are wrong.

But, like walking through Las Vegas... all that show and money to blow on things comes from one source... people like you paying over the odds for their products.

Clearly people don't find that to be a problem. Yes Vegas wasn't built on winners but people keep coming so obviously they feel they are getting good value for what they spend. If it's not your thing then do something else and I assure you nobody will care or think less of you for it.

Re:Value for money

[chipschap]

>The only way Apple or any company makes a big profit is if people like what they are getting for the price.

What a naive way of thinking. Either that or Apple uses predatory tactics to trap people and trick them into using their products.

Monopolies or near monopolies can easily be predatory, but that requires very limited consumer choice. I can't see how smartphones fall in that category.

In my view Apple charges a lot for what they deliver. But I don't have to buy Apple and I don't. Others feel Apple is a value, whether based on quality, functionality, or simply perceived prestige. They buy Apple. That's how the market works.

I suppose there is some lock-in, in that if you've spent a fair amount on Apple apps, you can't switch and take them to Android, whereas on Android, you can take your apps to a different brand of phone or tablet. But that doesn't seem like a predatory practice on Apple's part.

Face it: Apple is expensive but many people are willing to pay Apple's prices. Apple makes a lot of money that way. What's the problem?

Yeah, well look at Apple's INSANE markup.

[Noishkel]

Digital Trends work worked out a while back that Apple makes about $288 in profit for each iPhone sold. The average Android device... well it varies very widely. But According to 'Pocketnow' it works out to only about $25 of actual profit per device.

Honestly... Apple is really REALLY screwing it's customer base by selling them last years hardware in every new phone and just pocketing the profits. And for some reason people STILL flock to them.

Re:Yeah, well look at Apple's INSANE markup.

[RightSaidFred99]

Look, I hate Apple. I hope they go out of business, sell their headquarters, and the land where it stood is razed and salted.

That said, the "last year's hardware" comment is a bit silly. I can be a hater and still be rational enough to say they make good hardware. Their hardware is cutting edge when released and their CPUs top shelf. Being in denial helps no one.

Not all customers are equal

[sjbe]

91% of the profits share, would be fine, if they also had 91% of the market share, sadly they have ~40% of the market share.

Why is that sad? Not all customers are equally profitable. Companies that presume otherwise usually find themselves in a bankruptcy court rather quickly.

So either their product is more expensive than their competitors, or they have massive efficiencies that their competitors don't... (or some combination).

Apple phones ARE relatively expensive. This has never been a debate. Obviously most people that buy them find them to be good value for the money. The fact that they charge more than some others is irrelevant. If a company cannot sell something for enough money to make a profit then it is an indisputable fact that people don't value what they are selling.

And yes Apple does realize some cost efficiencies from their size which few others in their market can match.

An important note missing about that 91% figure...

[NarcolepticPenguin]

From the article: Apple's closest rival Samsung does not feature in the Strategy Analytics report.

Economic theory [Re:Sigh.]

[Geoffrey.landis]

You DO NOT want the company you are buying things from to make record profits.

Standard economic theory says that they will make record profits if and only if their customers believe that they are providing a superior product. So, yes, actually you do want to buy from a company making record profits: this is a sign that their customers like them; and, in this case, iPhones have been around long enough that it is a sign that their customers are repeat customers.