73% of quarterly smartphone and tablet profits belonged to Apple
While Samsung shipped roughly double the amount of smartphones Apple did last quarter, market share still isn't translating into profit share, as Apple retains an absolutely massive 73% share of smartphone and tablet profits. And that was during a slow quarter where people started anticipating the next iPhone. John Paczkowski reports for All Things D:
So while Samsung outselling the iPhone 2-to-1 is a nice milestone and no doubt a point of pride for the Korean company, it’s not the financial victory that it might first appear. Samsung might be the mobile industry’s king, but Apple still rules overall in the most important metric of all: Profit.
What's more astounding is that's 73% of profits (and 43% of revenue) based on 6% of smartphone and tablet shipments. Every year to date, Apple has sold more iPhones than all previous years combined. iPhone 3GS sold more than iPhone and iPhone 3G combined. iPhone 4S is selling more than iPhone, iPhone 3G, iPhone 3GS, and iPhone 4 combined. Next quarter is the big one, with a new iPhone, perhaps an iPad mini and more to drive holiday sales. If Apple can continue growing at that scale, and they can do it without significantly increasing costs and decreasing margins, how much profit share can they capture? How high can Apple go?
At the same time, while Samsung is doing fine, how long can the HTC, LG, Nokia, and BlackBerry's of the world continue to fund innovation and competition when they're profit neutral or negative? Does it leave the doors open for alternative business models, like Amazon's content-subsidized Kindle, or for new players, like Facebook?
Source: All Things D
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With the ridiculously high profits they make with charging for I phones it makes sense.
Sounds like the people who follow this site pay too much for their iStuff.
Let's say you work twice as fast as anyone else in your company, and get your work done in half a day instead of a day. Should your boss only pay you half as much as people who take a whole day to do the same work?
Apple has figured out how to make phones and tablets cheaper than their competition, and/or get carriers to pay higher subsidies for them than their competition.
If you did that at your job, wouldn't you be termed a success? If you're an Apple shareholder, wouldn't you term it a success?
I'm not saying it's not successful, I'm just saying they could have charged me a little less on the iPhone and three iPads I own!
Rene, using your rationale, people are paid to work each day. If they somehow manage to get the job done in half the time than anyone else, then there is a problem. They still should be working the rest of the time, not chit chatting or taking long breaks. So, yes, if they get the job in half the time, they should be paid for the number of hours they actually work ;)
Mine was free. Subsidized, they cost less than some Androids. So the price of the iPhone isn't an issue. People are buying them because they serve the user experience, functionality, and app needs of users, worldwide. Looking at people in the stands at the Olympics, I didn't see a single person with an S3 but I saw many with iPhones. Sell more phones and make less profit or make more profit selling phones. Someone is winning here and it isn't Samsung.
Get your eyes checked the S3 is all over the olympics and I'm not just talking about the commercials. I also don't expect to see as many GS3's given the device has been out for a few months compared to the 4s which has been out for almost a year.
And it gets even better. online media is saying Samsung is now offering up to $300 in a trade-in rebate for your old smartphone. I sure hope Samsung's board of directors have enough sense to know this is a stupid idea. Almost giving away something just to have bragging rights that they have the most market share is simply ridiculous. OTOH, I guess it's one way to get people to jump on the Android bandwagon.
As far as Apple goes, everyone I know has paid the going rate for an iPhone. On Boxing Day (in Canada) like US Black Friday, Best Buy had the iPhone 4S for $0.00 but that was a one day sale only. People will pay for ease of use and simplicity plus second to none repair and extended warranty even though the hardware is second rate.