Why Apple’s iPhone keeps raking in the majority of mobile phone profits

“Apple continues to collect the lion’s share of the smartphone’s industry’s profit,” Puneet Sikka writes for Market Realist. “According to Asymco, out of the $215 billion net operating profits earned in the last six years, Apple has raked up about 62% of the industry’s operating profits.”

“According to the same report, Samsung had a profit share of 26%, Nokia’s share was less than 10%, HTC’s share was 2.8%, and BlackBerry’s share was 1.9%,” Sikka writes. “This report re-confirms our belief that Apple’s innovation has helped the company gain an edge over its competitors in terms of what matters most for a company—profit.”

“Although Google’s Android is the most popular smartphone operating system, the [below] chart suggests that there’s no comparison to Apple’s domination when it comes to profitability,” Sikka writes. “According to IDC, Android share in the global smartphone operating system market in terms of shipments increased from 69.0% in 2012 to 78.6% in 2013. Android dominates this market in terms of shipments, but it pales in comparison to Apple in terms of profitability.”

Apple's iPhone keeps raking in the majority of smartphone profits

“Apple has always concentrated on innovation, which enables the company to sell the iPhone at a much higher price than competitors,” Sikka writes. “For example, in the U.S., Apple has tied in with telecom operators such as Verizon and AT&T, which sell the iPhone at a highly subsidized price to customers in lieu of two-year contracts. However, Apple gets the full price for the iPhone from telecom providers that it sells to, which is upwards of $500. This isn’t only true of developed markets, but also emerging markets.”

Much more, including “why Apple dominates the Chinese high-end smartphone market,” how “Apple converts brand desirability into real emerging market sales,” “why Android fragmentation in China is good news for Apple,” and how “an earlier iPhone 6 launch would help Apple avoid Samsung’s threat” in the full article here.

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

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18 Comments

  1. There is a very good reason for this. Apple simply makes great products. Are there any dedicated Samsung fans? (Other than the paid shills of course.) Apple is the Michael Jackson of phones, and Android/Windows/Whatever is the Justin Bieber.

  2. So this article is about total profits from sales of only the smartphone HW over a 6 yr period to date. How is this a surprise when everyone knows Apple’s profit margin on devices is higher than other OEMs and of the OEMs listed on the chart has been at it longer during the same 6yr period? Would be a more relevant chart if it showed only the last year or did a chart for each of the 6 yrs to compare changes.

  3. This is sorta off-topic, but since the article is about how great iOS devices are, and how AWFUL non-Apple devices are, I’ll say it anyway. Today, I was at a friends house. I left my iPad at home because I didn’t need it at the time…or so I thought. So I asked my friend if I could borrow her Samsung Galaxy Tab for a few minutes. What do I see when I log on to MacDailyNews? A pop up that says “MacDailyNews has given your Android tablet a virus. Tap OK to remove it.” This went downhill from there, and her tablet is now junked. Thanks MDN, my friend now hates me because of you! I know we are all anti-Android here, but that was low, and quite dickish. After experiencing this…I really don’t know what to think of MDN now.

      1. You act as if Apple created Windows, Internet Explorer, and ripped of the Dreamcast to create the original Xbox, which isn’t all that great anyway. Dreamcast had the brilliant Sonic Adventure, while Xbox had the silly Sonic Heroes. But I’m going of a tangent: Do you really hate Apple with a passion only reserved for Micro$oft?

    1. Are you kidding me!! She could have gotten this so called virus any number of ways! With 97% of the malware written for android; this might have been inevitable! Tell your friend to get a life and buy products from companies that have a better track record at keeping their customers happy and secure!

    2. ‘Flloyd’: Do you have ANY details regarding this incident?

      Q: What exactly stated ‘MacDailyNews has given your Android tablet a virus’ etc? That could be from a variety of causes, including the Android tablet already being infected.

      Q: What does ‘here tablet is now junked’ mean? Could you attempt to be something other than vague please?

      Q: Is this supposed to be humor?

      I don’t see any implications against MDN here. I see only an attempt to implicate MDN with bizarre story telling.

      BTW: I work with computer security. I think I can deal with all the details you can toss at me. So please do.

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