Roger Fingas
Though the iPhone is just 20 percent of the overall smartphone market, Apple's handset accounted for a colossal 92 percent of the industry's operating income during the March quarter, according to new research.
That share is up from 65 percent a year ago, according to a Canaccord Genuity memo obtained by AppleInsider on Monday. Samsung, Apple's chief rival, claimed 15 percent of income. Their combined figure surpassed 100 percent because other companies in the top eight either took losses or broke even.
BlackBerry, for instance, held a flat zero, while Lenovo hit -1 percent. Microsoft declined to a 4 percent share, and will be radically altering the way it tackles phones as it cuts up to 7,800 jobs and writes off its Nokia acquisition.
Even Samsung recently forecast a 4 percent drop in operating profits for the June quarter, something a Wall Street Journal source blamed on a botched Galaxy S6 launch. Although the phone is selling, the company initially produced too many regular S6 units and too few Edge models.
Apple's iPhone is thought to account for less than 20 percent of worldwide smartphone unit sales, meaning that its control of industry profits is mostly due to higher margins off each customer. The iPhone's major competion comes in the form of Android devices, which because of their shared platform have to compete on either cost or hardware features, reducing profit margins.
Canaccord noted that the income estimate didn't factor in privately-held firms like China's Xiaomi, but argued that such companies were unlikely to skew figures in a meaningful way.
Apple is due to announce June-quarter financial results on July 21. A conference call is scheduled for 5 p.m. Eastern time that day, during which Apple executives will share results with investors, analysts, and the media. AppleInsider will break the results as soon as they're available.
Amber Neely
Andrew Orr
William Gallagher
Christine McKee
AppleInsider Staff
Chip Loder
90 Comments
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. Fantastic news. What a Monday.
Dang, Apple need to try harder! :D Of course Wall Street will crucify AAPL as this shows they have reached saturation so no where to go whereas poor Scammy has lots of room to grow! :no:
Just a bit of historical perspective, it would delightful to see more of this in journalist reporting. A simple score card on journalist, analysts, blogger, pundit, etc., performance over time would be sobering and I think improve reporting overall. The simple fact, Apple is utterly unprecedented and generally completely misunderstood as a company and business. BGR, ".... Apple and Samsung combined to pull in 100% of mobile profits in Q1 By Dan Graziano on May 7, 2013 at 6:00 PM ... Samsung has slowly eaten away at Apple’s profits over the past few quarter. The research firm notes that Samsung is now on track to surpass Apple for the largest share of smartphone industry profits within the next few months. “During the June quarter, we believe softer iPhone sales combined with strong Samsung Galaxy S4 sales could result in Samsung surpassing Apple for the top share of handset industry profits,” Walkley said. ..." Business Insider "... Apple Has 53% Of The Smartphone Industry's Profits, Samsung Has 50%, Everyone Else Is Negative Or Zero JAY YAROW Jul. 31, 2013, 10:47 AM 5,091 15 FACEBOOK LINKEDIN TWITTER For the longest time, Apple's supporters had an easy retort to anyone that said the iPhone was getting crushed in market share. They could just say, "Yes, it only has 15% of the smartphone market share, but it has the majority of its profits." They're probably going to have to start thinking up a new defense because Apple is about to lose its lead in smartphone industry profit share. ..." "... FromeDome By Dan Frommer. From the SplatF archives. Tuesday, November 15, 2011 at 1:26 pm. Why Apple’s iPhone market share actually matters Tim CookWhile Google Android’s share of the smartphone market soars, Apple’s is drooping. Last quarter, Android represented 53% of smartphone shipments, according to Gartner — some 60 million devices shipped worldwide. That represented three times more Android shipments than the year-ago period (21 million), and twice as much market share (25%). Meanwhile, Apple’s market share dropped to 15%, down from 17% a year ago and 18% during the prior quarter. Overall shipments grew, but not nearly at the rate as Android’s. ..." "... Daring fireball.net, Gruber, APPLE’S SHARE OF PHONE HANDSET INDUSTRY PROFITS CLIMBS TO 92 PERCENT ? Shira Ovide and Daisuke Wakabayashi, reporting for the NYT: Roughly 1,000 companies make smartphones. Just one reaps nearly all the profits. Apple Inc. recorded 92% of the total operating income from the world’s eight top smartphone makers in the first quarter, up from 65% a year earlier, estimates Canaccord Genuity managing director Mike Walkley. Samsung Electronics Co. took 15%, Canaccord says. Apple and Samsung account for more than 100% of industry profits because other makers broke even or lost money, in Canaccord’s calculations. […] Apple’s share of profits is remarkable given that it sells less than 20% of smartphones, in terms of unit sales. At just 20 percent of unit sales, Apple isn’t even close to a monopoly. At 92 percent profit share, they have a market dominance that rivals any actual monopoly the tech industry has ever seen. We don’t even have a term for this situation, it’s so unusual. Profit monopoly? ..."
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.
There is no way to know how much the iPhone rip offs make in foreign markets. Presumably, that they continue to sell iPhone rip offs is a good indicator they [B]are[/B] making money.