“Profit,” MG Siegler writes for TechCrunch. “No point in burying the lede.”
“Four years ago, Apple came out of quite literally nowhere (in the mobile phone space) and completely up-ended the industry. But in the past couple of years, they’ve watched their former ally [Google] take command in terms of market share. This has been the story that everyone keeps talking about — including Apple, which routinely takes thinly-veiled swipes at Google for what they often imply are misleading numbers, like activations-per-day,” Siegler writes. “But part of me wonders if that’s not just Apple applying some very clever reverse-psychology and manipulation. The media is naturally distracted by big numbers, and Apple might be just fine ceding that story (while pretending they care, mind you, to keep us interested) while they take the real prize.”
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Siegler reports, “Apple captured two thirds of available mobile phone profits in Q2. Take a moment to let that sink in. Apple now controls over 66 percent of all the profits amongst the major players in the mobile space. HTC, RIM, LG, Sony-Ericsson, Samsung Motorola, and Nokia combined for the other 33 or so percent of profits in the space (with a few of them: Nokia, Motorola, LG, and Sony actually losing money).”
Much more in the full article here.
Related articles:
Apple officially ousts Nokia as world’s largest smartphone vendor – July 29, 2011
Apple took two-thirds of available mobile phone profits in Q211 – July 29, 2011
Wrap a smartphone with $100 or $500 and you can get a lot of people to pick it up. A assume that would work with dog pooh too!
Responsible owners clean up after their dog.
i love the dada-ist comments on this website!
you mean doo-doo-ist?
I was caught by surprise when I first saw the Motorola buy 1 Android and get the 2nd FREE ad with Verizon. Motorola can ask RIMM how well that is going to work for them.
Others will have to match that FREE Android and maybe raise them another FREE Android to move that crap. This is going to get ugly real soon!
I’m waiting for the buy one get ten free Android promotion to roll out. How will they build tonnage otherwise?
The Android BOGO ads I have seen were for Android 2.1 phones. In otehr words, crap that is obsolete even by Android standards.
But the vendors will provide updates to that Android OS software any day now, right?! lol
Buy an Apple product. They get *better* with time!
Guess you’ve never owned an iPhone 3G. Runs really well with iOS 4. Not.
iPhone 3G is now three years old. Back then, Android didn’t even exist.
Android makers are still making and selling new Android phones with v2.1 (Eclair) of Android. Three newer major revisions came since (2.2, Froyo, 2.3 Gingerbread and 3.0 Honeycomb). And people who buy those phones will never know when (or if) their carrier will allow updating those phones to anything newer.
Actually, my wife has a 3G. It was bought at the 3G launch and it still works pretty well. iOS 4 actually runs a bit better than iOS 3 did.
More interesting than that is that her best friend has a moto droid, not quite 2 years old. It has never worked properly and she has already replaced the battery (and the second is now holding about 3/4 of it’s original charge) And all this time the iPhone keeps humming along… (BTW her friend says she was “duped” by the Verizon sales-guy into beliving that the ‘droid was “just like an iPhone”. She is getting a new iphone when her contract allows.)
And therein lies an interesting phenomenon showing up of first time Android buyers (BOGOF or otherwise) who were duped into buying fake iPhones and now their contracts are up (at last), they’ve been less than impressed by the craptacular Android ecosystem, and the iPhone 5 soon coming out. I’d call that a perfect storm of raging Android defections.
Look out world, iPhone 5 will soon kick ass in maket share ways (both in profit and numbers) we have yet to witness, and we’ve witnessed PLENTY already.
The iPhone 3G was supported with software updates for over 2 years (2.0-3.X.X) not including the iOS 4 inclusion. It also received the updates when the other iPhones received them. The same cannot be said for Android phones.
Rick’s post brought to you today by the fallacy of: Non-sequitor!
BOGO offers are almost never done by the phone makers. They are almost ALWAYS done by the carriers. Manufacturers are still paid full negotiated price by the carriers, who often stuff their channels with Blackberries and Androids, and then need to discount them in order to move them.
Keep in mind, that BOGO offer is in reality no more than 15% discount. An Android (or a Blackberry) that sells for $100 with contract has an actual full price $450 (when subsidy is added to the price). So, when they sell two of those for $800 instead of $900, ($100 plus two subsidies) all they’re doing is discounting the two devices by some 12%.
I agree BOGO dealers are almost never done by phone makers. The article is about device manufacture profits yet you base your calculations on carriers – “paid full negotiated price” and “actual full price $450”.
Do you really think device manufacturers get $450 per phone sold to a carrier? Carriers know to move these phones they will need to heavily incentivize them. This results low average wholesale prices, probably closer to $200 or $250. With no need for incentives Apple is able to maintain a high price point to carriers. Keeping the higher price point allows Apple to generate more profit per device even with higher manufacturing costs.
I disagree with you on this “all they’re doing is discounting the two devices by some 12%”. While off topic about the article I’ll bite.
The carrier is not “discounting” anything. In fact, the discount they are offering to a consumer is 88% off a no contract price for 2 phones (based on your numbers). The 88% carrier subsidy is spread over the 2 year. Compare this to an iPhone with a no contract price of $650 and a 2 year contract price of $199 and the carrier discount is only 70%. Purchasing an iPhone at $199 means a consumer pays 30% of the no contract price.
It’s ugly now…for RIMM
bwahahahaha
Look no further than PC OEMs. They slash each other’s throat to capture 0.1% market share. Even now, every quarter some idiot market research firms will release a market share report such and such about 0.1% market share change regardless of what is the profit. Smartphone OEMs will plunge into the same idiot mindset, market share over profit. Meanwhile, Apple cries all the way to bank with mountains of cold hard cash, laments about not gaining greater market share.
I hope Techcrunch credits Asymco.com (Horace Dediyou) as the source for this analysis..
Was another result expected?
It seems pretty obvious that when you split profit between 2 devices (BOGO offers) you are only going to receive 50% of your profit potential. I guess this is the cost of keeping mind share and pushing devices no one really wants except APPL haters.
As I said above, BOGO offers are not truly BOGO. The actual discount is less than 15% (check my explanation above).
You will have to forgive JonM for his lack of understanding. Not only is he an Android user but he also has only ever used Internet Explorer on his Dell.
Exactly what don’t I understand? Can you please enlighten me with your other worldly wisdom?
Here’s a little info about me. I only use an HP because I have a corporate job. I can’t stand IE so I use portable versions of Firefox and Chrome. All other devices are Apple which currently include iMac, MacBook Air, 2 iPads (I wasn’t going to share mine), AppleTV Gen 2, Wifi, and a few more.
No stop trolling!!!
Your explanation above sucks.
How can u compare android to apple there is so many android phones even on metro so yes they are going to do more activations a dAy.
Old joke: “Sure, we lose money on every unit we sell, but we’ll make it up in volume.”
“Apple’s revolutionary iPhone has absolutely no competition where it matters most”
Neither does the Mac, iPad, iPod and Apple TV. In my opinion.
Apple, please allow T-Mobile to join the iPhone tsunami.
They already do: Apple offers unlocked iPhones and T-mobile offers sims to fit in them.
Granted that is edge only, but I don’t know that it makes a lot of sense for Apple to change the iPhone to work in the T-mobile 3/4G spectrum with the impending AT&T buyout.
I have the same conversation with my brother every time I see him. He has an iMac and iPod, but for some reason I cannot fathom, has an Android phone. I always tell him he should have gotten an iPhone (especially after he had to replace his phone 2 months after he got it), but both he and my SIL always spew back some crap about the guy at the store saying the android phone are really better than the iPhone. There are sooooo many moer apps and more things you can do with it. I always tell him it’s a load of crap, but I guess he will just have to learn the hard way.