“Apple captured 87% of smartphone industry profits in the fourth quarter, despite accounting for only about 18% of total units sold in the period, a Wall Street firm estimated Wednesday,” Patrick Seitz reports for Investor’s Business Daily. “Apple’s profit margins are the envy of the industry, thanks to premium handsets like the iPhone X and iPhone 8 series, according to Canaccord Genuity. Apple’s share of smartphone profits increased from 72% in the September quarter, it said.”
We believe strong sales and mix of the iPhone X will sustain strong gross margin dollars (for Apple) given the high price points and likely improving manufacturing efficiencies,. Apple continues to grow its leading market share of the premium-tier smartphone market, with double-digit growth of its installed base during the (fourth) quarter, and believe the iPhone installed base exceeded 635 million exiting calendar 2017. — Canaccord analyst T. Michael Walkley
Seitz reports, “Samsung came in second in smartphone operating profits with 10% of total industry profits [on 18.2% unit share].”
Read more in the full article here.
MacDailyNews Take:
Little Mikey had a lemonade stand. Okay, it was a kiosk. He sold 100 (8 oz.) cups yesterday for 10-cents each. He spent 11-cents per cup for artificial lemon flavoring, corn syrup, and the paper cups. He used tap water because it was free. Threw it all together in a big plastic pail. He’s out a buck for all of his trouble. Boy, that was a lot of work for less than nothing!
Around the block, little Steve runs a lemonade stand, too. It’s all blonde wood and very clean. He sold 50 (24 oz.) glasses yesterday for 50-cents each. He spent 20-cents per glass on fresh-squeezed lemons, pure cane sugar, spring water (mixed with the utmost care), and some very nice glassware (he buys in bulk and gets a good price). He took home $15 yesterday. He’s currently building his newest stand right where Mikey’s used to be. – MacDailyNews, April 23, 2009
SEE ALSO:
Apple iPhone took more than half of worldwide smartphone revenue share in Q417, a new record – February 15, 2018
Strategy Analytics: Apple has shipped 1.2 billion iPhones in the past 10 years; $760 billion in global revenue to date – September 8, 2017
Apple took 83% of smartphone market profits in calendar first quarter – May 16, 2017
How important is Apple’s iPhone market share? – May 29, 2017
With 51% worldwide revenue share in Q4, I would bet that Apple’s profit share was actually higher than 87%…
Take home message, people will pay for quality. Thank you Apple.
That’s still not good enough for Wall Street. All analysts ever talk about is market share percentage. It seems the big investors feel the same way. Apple with 18% market share is seen as barely hanging on by a thread. It just seems as though Wall Street believes that consumers will suddenly wake up one morning and decide not to buy iPhones anymore. I honestly don’t understand that reasoning but why else would Apple always be considered as a doomed company.
What really puzzles me is how all those Android smartphone companies manage to keep staying in business. Based on Apple and Samsung’s profits, there would be almost nothing left for all those smaller smartphone companies. Exactly what are they getting out of the smartphone market for them to keep coming back year after year and taking losses.
When Amazon says it may go into a particular market, Wall Street immediately says all rival companies will be ruined. Apple seems to have cornered most of the smartphone profits but I don’t hear anyone on Wall Street saying Apple is killing off all smartphone rivals. Wall Street is always saying how smaller smartphone rivals are threatening Apple. Wall Street is basically saying entering a new market works in favor of Amazon, but owning a market doesn’t work in favor of Apple. Does that make any sense?
Apple is soon going to have an awful lot of repatriated cash to spread around and it would seem that Apple could really put a pounding to rival smartphone manufacturers but Wall Street doesn’t see it that way, at all. It’s always being said how Apple can’t do anything to improve its situation in the smartphone market or any other market and I don’t know why.
Se also: The Smartphone Endgame: Who wins once shipment volumes peak?
https://goo.gl/PVuNM7
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