Apple Takes 92% of Smartphone Profits in Q1 with Just 20% of Sales: WSJ
The Wall Street Journal reports Apple again is dominating smartphone industry profits, based on data from Canaccord Genuity, which noted the iPhone maker took 92% of industry profits, by selling just under 20% of smartphones:
Apple Inc. recorded 92% of the total operating income from the eight top smartphone makers in the first quarter, up from a 65% a year earlier, estimates Canaccord Genuity managing director Mike Walkley. Samsung Electronics Co. took 15%, Canaccord says. Apple and Samsung together account for more than 100% of industry profits because other makers broke even or lost money.
Apple’s rivals are feeling the pain from the iPhone, as Samsung’s profits are down (7 consecutive quarter of decline), Microsoft wrote down 80% value ($7.6 billion plus 7,800 layoffs) of its Nokia smartphone business and HTC’s last quarter saw a loss.
Back in 2007 when the iPhone launched, Canaccord estimates Nokia took two-thirds of industry profits at the time. By 2010, Apple and BlackBerry, along with Nokia dominated industry profits. Two years later, it was just Apple and Samsung splitting industry profits 50-50, but now the iPhone maker sits alone on top. Meanwhile, BlackBerry, is still releasing phones with physical keyboards.
Last week it was reported Samsung is said to launch its Note 5 early in August, to beat the upcoming ‘iPhone 6s’ to market, in an attempt to grab more marketshare.
Apple’s massive profits are obtained by its high-selling prices, which according to Strategy Analytics, saw last year’s global iPhone average at $624, versus $185 for Android smartphones. Apple’s latest quarterly earnings saw it sell 43% more iPhones than last year, at a higher selling price, increasing $60 thanks to surging iPhone 6 and iPhone 6 Plus sales.
Denny Strigl, former chief operating officer of Verizon Communications Inc., said in an interview “The dominance of Apple is something that is very hard to overcome,” noting “Apple has to stumble somehow or another, and I don’t think that’s going to happen.”
Remember, as Apple’s news ads stated last week, “if it’s not an iPhone, it’s not an iPhone.”