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This is demoralizing: Apple scoops up 93% of the mobile industry's profits

This is demoralizing: Apple scoops up 93% of the mobile industry's profits
Apple made about $18 billion last quarter, toppling the largest three-month corporate profit of $16 billion that belonged to the Russian juggernaut Gazprom. How did Apple do it? Well, the iPhone line ASP was $687 for the quarter, marking a $50 increase from last year, due to the fact that Apple now has the iPhone 6 Plus, whose starting price is a Benjamin higher than the breadwinner. 

The average price to make and sell one, however, is about $220, even with the thorough redesign that the iPhones received, so roughly 200% profit on a handset, and Apple sold a record amount, too. As a result, now Apple has about $178 billion in cash to play with, and those can certainly buy you a lot of innovation still to happen.

Exactly how much more profitable is Apple than the other phone brands? Try 93%. Yes, that's the share of mobile industry profits that Apple hauled home (or offshore) in this past quarter, according to research firm Canaccord. They also predict a rapid rise in the iPhones user base in the next three years, here's the full scoop:

We believe the strong iPhone 6 replacement sales should continue during C’15, as we estimate only 15% of the current estimated 404M iPhone installed base has upgraded to the new devices. We also anticipate continued strong share gains for the larger screen iPhones from high-tier Android smartphones during C’15 driving strong growth in the iPhone installed base and model the iPhone installed base growing to 487M subscribers exiting C’15 up 20% Y/Y. Longer term, we anticipate a gradually moderating rate of growth for the installed base from C’16 through C’18 and estimate 650M iPhone users exiting C’18. We note this base would only represent 1/3rd of an estimated 1.82B global premium smartphone subscribers anticipated by C’18. Finally, we anticipate steady long-term iPhone replacement sales within this growing iPhone installed base, and we believe this combined with our modest installed base growth expectations position Apple for steady sales of roughly 210M-215M iPhone units annually between C2015 to C2018.

Samsung grabbed the lion's share of the remaining 7%, while the rest are either scraping by, or directly in the red. Pretty demoralizing.

This is demoralizing: Apple scoops up 93  of the mobile industry's profits

source: Barron's

156 Comments
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posted on 09 Feb 2015, 09:35 13

1. nctx77 (Posts: 2258; Member since: 03 Sep 2013)


Let me break that down. Basically this means that most of the android marketshare is cheap phones. Have a nice day!

posted on 09 Feb 2015, 09:42 29

2. sgodsell (Posts: 4413; Member since: 16 Mar 2013)


If you are proud of the fact that Apple is making a ton of money from the ignorant and blind. Then please be happy for them. But to say android's market share is cheap phones. Just proves how ignorant and blind you really are.

Even blind camera tests proved that Apple does not have the best camera's in their smart phones. Nor does it even have the fastest processors on the market. But the blind will continue to believe Apple has the best to offer.

posted on 09 Feb 2015, 09:46 1

3. theguy2345 (Posts: 1216; Member since: 24 Jun 2014)


No, it means apple at this point has a monopoly. Other manufacturers cannot keep going like this. They are all in the red. Those are the ones that innovate and not Apple. Something needs to be done. It will turn into a duopoly with only Samsung with the little they have and Apple

posted on 09 Feb 2015, 09:46 11

4. jellmoo (Posts: 1895; Member since: 31 Oct 2011)


Is it really necessary to be condescending to those that prefer the iPhone?

posted on 09 Feb 2015, 09:47 4

5. mixedfish (Posts: 1298; Member since: 17 Nov 2013)


Actually what it means is the profit margins are slim compared to Apple products. Which means you're paying more price premium for what's essentially hot air.

But perhaps you value hot air? Good day to you!

posted on 09 Feb 2015, 09:49 10

7. jellmoo (Posts: 1895; Member since: 31 Oct 2011)


That's not what a monopoly is though. Apple isn't controlling the market, their user base is actually smaller than that of Android. They're simply better at making a profit. That's not to say they don't employ shady business practices, but it still doesn't equate to a monopoly.

posted on 09 Feb 2015, 09:54

8. theguy2345 (Posts: 1216; Member since: 24 Jun 2014)


It is killing the other manufacturers. If they all die, they will all have a monopoly. You can't operate always in the red

posted on 09 Feb 2015, 10:01 2

10. Iodine (Posts: 1372; Member since: 19 Jun 2014)


It bassically means that whatever hard android fans want you to believe in that, nobody wants to invest premium from their hard earned money to an android smartphone - that's why high-end phones with android bassically don't sell at all.
No wonder, android has just a sole purpose to cover as many people as possible with as cheap phones as possible bassically ruining any ability of android OEM's to compete with Apple and earn profit.

posted on 09 Feb 2015, 10:05 12

12. Doakie (Posts: 2170; Member since: 06 May 2009)


Yup. Be a snob and make stupid comments get stupid comments back at you. iPhone owners don't hold exclusive rights to making stupid generalized totalitarian comments. Sorry bud.

posted on 09 Feb 2015, 10:19

17. RebelwithoutaClue (Posts: 3240; Member since: 05 Apr 2013)


Depends on your definition of the market. When it's smartphones, then no. But looking at iOS devices, then it's a big yes :)

posted on 09 Feb 2015, 10:23 5

18. RebelwithoutaClue (Posts: 3240; Member since: 05 Apr 2013)


You are mixing two things here. Expensive phones and high-end phones. Why pay top dollar for an high end phone if you can have it for less money.

posted on 09 Feb 2015, 10:33 3

20. FlyingDutch (banned) (Posts: 97; Member since: 30 Jan 2015)


By your logic, every software should be free since it costs nothing copying them.

posted on 09 Feb 2015, 10:49

27. lyndon420 (Posts: 4840; Member since: 11 Jul 2012)


Very well said bud.

posted on 09 Feb 2015, 11:03 4

33. VZWuser76 (Posts: 4669; Member since: 04 Mar 2010)


It also means that you're giving Apple more in profit than you would if you went with another company's product. I said this the other day, why do Apple fans tout Apple's profits like it's a good thing? If they were using more premium materials, that should mean that their profits would be less, not more. And their product price isn't much more than comparable Android devices.

Another factor that seems to be lost on many people, if they are in fact making 200% profit on these devices, they could sell for much less than they are now, and still make more profit than their competitors while at the same time being more competitive price wise to consumers. But if they know you'll pay for it, why not make all that they can off you? And their fans support that, proudly. Seriously, how does that profit benefit their customers? If it were any other company people would call it for what it is, a money grab.

It'd be one thing if they sunk back most of their money into R&D or even charity, but they don't. It sits in a cash pile and does nothing but make them money on interest. With all that money if they put it into R&D, imagine what they could actually innovate compared to what their competition does with far less capital to draw from. But they don't and essentially stay on par with their competition, technologically speaking.

posted on 09 Feb 2015, 11:06 2

34. mrochester (Posts: 605; Member since: 17 Aug 2014)


These other manufactures need to figure out how to make money then.

posted on 09 Feb 2015, 11:20 3

40. rd_nest (Posts: 1646; Member since: 06 Jun 2010)


No need to be condescending towards those who buy Apple products. They are already idiots, they need our support.

posted on 09 Feb 2015, 11:35 3

49. TechieXP1969 (Posts: 12988; Member since: 25 Sep 2013)


Is it really necessary to be condescending to those that don't?

posted on 09 Feb 2015, 11:42 1

55. TechieXP1969 (Posts: 12988; Member since: 25 Sep 2013)


Samsung isn't operating in the red, neither is HTC or Lenovo. Sony? Maybe!

posted on 09 Feb 2015, 11:52

61. boosook (Posts: 1442; Member since: 19 Nov 2012)


Who cares...

posted on 09 Feb 2015, 12:07 9

73. TechieXP1969 (Posts: 12988; Member since: 25 Sep 2013)


Apple makes easy money because A) They charge 4 to 6 times the cost of what it costs them to make a device. $220 to make an iPhone sold for $750 to start. That is just over 3 times their actual cost.

I mean what idiot would pay an extra $100 for a device where the hardware is essentially identical to the previous model? Obviously a lot of them.

Apple is the only OEM who consistently uses 2 year old hardware in their tablets, phones and computers and gets away with selling them at a premium. While other OEM's use the latest greatest, sell it at less cost because of competition using the same software.

Using the same software everywhere vs having your own, takes away the profit because you either have to keep up of be beaten. Apple has IOS. If another OEM had iOS the tables would be far different.

Example, imagine iOS on a Samsung device with the same capabilities as a Samsung device has now. You think the iPhone would see the same? I say it wouldn't.

Most people who buy an iPhone have no choice but to keep buying them because you are forced to be locked into Apple once you spend so much money because if you try to move you lose everything. Most people know this and a know they are stuck. Am glad I got out early. But I still put more than $3000 into the brand and I have nothing to show for it. With Android, if I get tired of a brand, I move to another and lose nothing on my investment. In fact I get a huge return.

posted on 09 Feb 2015, 12:12 1

74. AfterShock (Posts: 3698; Member since: 02 Nov 2012)


Lol
We need them to spend with OEM that are innovating for a larger footprint then one fruit/vegetable stand can offer or will.

When the money is not all controlled by one OEM, we'll all benefit.

posted on 09 Feb 2015, 12:42 5

78. jellmoo (Posts: 1895; Member since: 31 Oct 2011)


I agree that making a stupid comment will result in a shot back. That's fine. But is it necessary to not just insult the OP, but also a large group of other people based on their buying habits simply because you don't agree with them?

posted on 09 Feb 2015, 12:57 1

86. ILikeBubbles (Posts: 525; Member since: 17 Jan 2011)


Love this.

posted on 09 Feb 2015, 13:01

88. ILikeBubbles (Posts: 525; Member since: 17 Jan 2011)


well statistically a larger base of lover profits will easily equal or surpass a smaller base with higher profits... Apple may have the highest profits from it's slightly smaller customer base but it's not exactly black and white to calculate android vs ios profits either because there are so many more OEMS to report from .. etc.. and in the end every os available (except for forked Android i think) is necessary to continue to innovate for the customer. so bring it on WP10. :D

posted on 09 Feb 2015, 14:15 2

93. HansGoneInsane (unregistered)


It is not the hardware that puts Apple ahead of the competition, it is the software.

I tried Android with Sony Xperia Z2 and Z3 compact. From hardware side I could not complain. But from software side, Android lagged the comfortability and the beautiful design of iOS.

That is Apple's secret. I think that only Microsoft can challenge Apple since they have the resources so build up a closed Eco System like Apple with high quality software combined with good looking hardware.

posted on 09 Feb 2015, 15:17 3

97. mrochester (Posts: 605; Member since: 17 Aug 2014)


That's exactly it. Some of the Android hardware is absolutely lovely. But it's just severly gimped because it runs Android.

posted on 09 Feb 2015, 15:20

98. mrochester (Posts: 605; Member since: 17 Aug 2014)


If Apple use the same software as everyone else we would:

A) have a far less competitive market. We need more smartphone operating and ecosystems, not less.

B) Apple's profits would decline masively as they'd no longer have a competitive advantage.

All in all, it's a pretty silly idea.

posted on 09 Feb 2015, 15:46 6

105. mrochester (Posts: 605; Member since: 17 Aug 2014)


It's the insecure Android crew who think they are better than everyone else.

posted on 09 Feb 2015, 16:54

116. AlikMalix (Posts: 7103; Member since: 16 Jul 2014)


You're an idiot. Sorry, but perception of value based on just hardware offering is dumb. Hardware = nothing if you can't utilize it properly. I didn't pay $200 for my iPhone 5s when it came out - I paid $200 for my experience with Apple devices - that's the experience that many are willing to pay for.

GET THIS THRUGH YOUR 12 year old HEAD --- if Apple devices were too expensive - no one would buy one. The fact that it sells well regardless of how much it cost manufacturer to make one (which in reality is about the same as any flagship android). iOS is just a better experience for a large number of people - there's no one who's just trapped in any ecosystem proven that millions are switching back and forth among all platforms if they wish.

I tried android with S4 - it required extra effort to do what Ive done on iOS easily. File manager was useless, and the benefits of SD cards are diminished by how much slower itbis compared to built in options that Apple offers up to 128gb.

Android is the one overpriced if no one is willing to buy it enough to make the company any profit. You really thing your precious HTC, Sony, lg and Samsung is kindly keeping their devices at low/none profit margins? You're delusional. They'd charge you $1000 bucks in an instant if you were willing to pay for it - but no one seems to be willing to.

Another thing - Apple makes its own OS and designs their own hardware, hires third party manufacturers (providing some profit for your precious Samsung in the process, you're welcome) Apple also provides free face to face assistance and a largely regarded ecosystem by app developers as well as accessory, automotive and home automation enterprises. ANDROID OEM's just slap some hardware together, install freeware OS from Google, skin it and suck on googles free ecosystem tit that they don't need to worry about maintaining, supporting, expanding.

I guess some people recieve value differently, shocker isn't it? To you it's the sum of parts - to others it's experience.

posted on 09 Feb 2015, 17:58 1

120. joey_sfb (Posts: 6402; Member since: 29 Mar 2012)


Apple trolls are a unique bunch. Proud of getting rip-off.

Most of my colleague will moaned about the expensiveness of Apple phone but they stay there because their data are lock in.

Only trolls make Apple huge amount of profit on them a status symbol and wear it like a badge. LOL!

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