Apple utterly dominates mobile device market with 6% market share – and 77% of the profits

“Samsung shipped about 50 million smartphones last quarter — about double the number Apple sold and, according to IDC, the largest number of units ever shipped by a handset vendor in a single quarter,” John Paczkowski reports for AllThingsD. “But does it matter? No.”

“Because when you look at the broader mobile industry, Apple, thanks to the higher gross margins of the iPhone and iPad, far outshines its rivals in both revenue and operating profits,” Paczkowski reports. “Though it shipped only about 6 percent of the industry’s smartphones and tablets in the second quarter, Apple captured about 43 percent of the industry’s revenues, according to Raymond James analyst Tavis McCourt. And it generated an astonishing 77 percent of the industry’s operating profits. This, even in a seasonally weak period for iPhone sales.”

Paczkowski reports, “McCourt writes, ‘Until Samsung starts generating more profits than Apple, we would not be overly concerned with who has the unit share lead. Remember, HP and Dell still sell a lot more PCs than Apple sells Macs, but does it matter?”

The full article, with McCourt’s charts illustrating APple’s utter dominance, here.

MacDailyNews Take: In February of the is year, Asymco’s Horace Dediu reported that Apple, with a newer iPhone model, had 8.7% market share of the mobile market while reaping 75% of the profits. Now, pre-mnext-gen iPhone, it’s 6% of the market and 77% of the profits! Apple is moving like a tremendous machine!

[Thanks to MacDailyNews Reader “GetMeOnTop” for the heads up.]

Related articles:
Apple takes lion’s share of mobile profits; Samsung unit sales estimates cloud market share picture – May 1, 2012
Apple remains #1 global smartphone leader; Samsung overtakes beleaguered Nokia for cellphone lead – April 27, 2012
With 8.7% market share, Apple reaps 75% of mobile phone profits – February 3, 2012

19 Comments

    1. or slightly lower iPhone margins. If the carrier subsidies were a little lower and the newest iPhone started at $149, Android would be wiped off the map here in the US.

      1. You can already get an iPhone 4 for $99.

        Everyone I know who went against my advice and got a droid has regretted it.

        Those of them who’s contracts have ended switched to the iPhone immediately.

  1. I think Apple’s small mobile market share does matter to Wall Street and Apple is being valued less on that small amount of market share which is definitely hurting the share price of the company. Even though Apple only has 6% market share there are still concerns about their mobile device growth which is currently being pegged to be nearly zero. The media is constantly mentioning about how badly Samsung is beating Apple in the smartphone industry. Somebody must be taking that very seriously about what Apple has to do to change that poor situation.

    As long as Apple is being undervalued for only having minor mobile market share, I would say it’s definitely a problem for shareholders. Apple is definitely being punished by Wall Street for low market share no matter what this guy says. Android is still perceived as an unbeatable threat to iOS.

    1. That is probably true. However, I suspect that many of the Android handset sold by Samsung and others are “smart” in name only. The bottom-end units are simply the modern versions of feature phones and are not used for any significant degree of internet activity. The people buying at the low end are generally not interested in paying a bunch of extra money for mobile data services. That is why I do not have an iPhone.

      That said, it is unlikely that Apple can maintain a 77% profit share indefinitely, regardless of Apple genius in product design or supply chain management. Eventually, Apple will have to accept lower margins on iPhones. AT&T and Verizon are already doing their best to weaken Apple’s stranglehold, probably in a vain hope that they will then be able to regain some control and stop the plunge towards “dumb pipe” status.

    2. the day when apple starts running its business like its competition and and worry about share price will be the first day of it’s demise. 2 things stand out about apple’s performance:

      1) making $ is not on the top of their list
      2) conventional wisdom does not apply (def: wisdom you use when you are too dumb to come up with your own answers)

      there is great risk when you have too much market share. you cannot be nimble, and a small market course change can scuttle your ship. you need not look further than MS, Nokia, and RIM. SJ and apple understood this. battling MS for all these years for their own survival taught them the new game they now play. apple does not play the market share game, only analysts and CEOs who dumb down the room when they walk in do.

      apple is about forming new markets or sectors where there is clean air (read “blue ocean strategy”). they may leverage some of their existing products, but i think this is part of the grand scheme. their natural family of products makes more sense than anyone else’s artificial family. they may end up creating “clean air” in the smokey room called TV by reinventing how you use it. apple did not invent photos, music, video, books, periodicals, or aspiration, but they have changed how we relate to them.

  2. Ok so let me get this right.

    Samsung SHIPPED 50 million phones
    Apple SOLD about 3 million phones

    So that means that Samsung have about 48 million phones gathering dust, and denying warranty on the other 2 million phones. Ok. Got it.

    F U Samsung. Die in hell you thriving mongrel bastards!! Apple has the balls and the money to protect their patents this time. They won’t roll over and get ass raped like Microsoft did to them in the 80’s.

  3. Ok. Explain this. I walk down the street and just about EVERY phone (about 80%) is an iPhone. I have NEVER seen a Samsung Galaxy S3 outside of a store.

    1. I have seen a few Androids. Once I even saw that most elusive of phones in the wild – a Windows phone with the Metro interface. As long as the competition is fair, Apple is likely to remain a strong presence in the smartphone market for a long time to come. However, Samsung has already shown that copying Apple is the next best thing to actually being Apple, and they are actually making a bit of profit unlike the rest of the crowd.

  4. Compared to profit, unit sales are meaningless.

    Last time I checked, hot dogs outsold filet mignon at the local grocery.

    Interesting sidecar, my spell checker on the iPhone 4S did not recognize the correct spelling of mignon.

    Revenge of the Veggies? 😉

  5. Apple is just doing what they have always done. Making great products that cost a little more, but are worth it, and caring less about actual market share. They just want to keep the business running so they can do what they love, without using dirty practices to corner a market.

    Most of the world is used to using photocopied, clunky, buggy, and malware vulnerable operating systems. They gravitate to what feels familiar, thus Android does well.

    I will be happy as long as Apple continues to earn enough profits to keep making the products that I love to use and own. Could care less about market share, and I don’t like being one of the sheeple.

    1. Well put.

      I felt the same way after reading the original and thinking MDNs panties are showing again; doing those utterly terrific cheers.

      The comments section over @D has a couple of kids fighting over who’s daddy is the strongest. I give the edge to the nutjob, cause the geek has shit for brains.

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