“A report was just released from Canaccord Research and in combination with research from IDC, we get these utterly absurd results,” Ophir Gottlieb reports for CMLViz.com. “Apple accounted for only 13.5% of total smartphones shipped globally. Apple takes home 94% of the total smartphone industry profit.
“Yes, while Apple sells 1 out of every 8 smartphones, it takes essentially all of the profit from the entire industry with just that market share,” Gottlieb reports. “[Business Insider reports], ‘Canaccord says it anticipates continued high-end smartphone market share gains for the larger screen iPhone 6/6S devices as our surveys indicate a greater mix of Android smartphone consumers are switching to the iPhone from Android.'”
“Note that Samsung earned 11% of smartphone worldwide profits,” Gottlieb reports. “Apple earns more than 800% (8-fold) Samsung’s profit from the industry.”
Source: CMLViz.com
Read more in the full article here.
MacDailyNews Take: Revolutionary.
• “[iPhone] just doesn’t matter anymore. There are now alternatives to the iPhone, which has been introduced everywhere else in the world. It’s no longer a novelty.” – Eamon Hoey, Hoey and Associates, April 30, 2008
• “We are not at all worried. We think we’ve got the one mobile platform you’ll use for the rest of your life. [Apple] are not going to catch up.” – Scott Rockfeld, Microsoft Mobile Communications Group Product Manager, April 01, 2008
• “Microsoft, with Windows Mobile/ActiveSync, Nokia with Intellisync, and Motorola with Good Technology have all fared poorly in the enterprise. We have no reason to expect otherwise from Apple.” – Peter Misek, Canaccord Adams analyst, March 07, 2008
• “[Apple should sell 7.9 million iPhones in 2008]… Apple’s goal of selling 10 million iPhones this year is optimistic.” – Toni Sacconaghi, Bernstein Research analyst, February 22, 2008
• “What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much… Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious.” – Laura Goldman, LSG Capital, May 21, 2007
• Motorola’s then-Chairman and then-CEO Ed Zander said his company was ready for competition from Apple’s iPhone, due out the following month. “How do you deal with that?” Zander was asked at the Software 2007 conference. Zander quickly retorted, “How do they deal with us?” – Ed Zander, May 10, 2007
• “The iPhone is going to be nothing more than a temporary novelty that will eventually wear off.” – Gundeep Hora, CoolTechZone Editor-in-Chief, April 02, 2007
• “Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.” – John C. Dvorak, Bloated Gas Bag, March 28, 2007
• “Even if [the iPhone] is opened up to third parties, it is difficult to see how the installed base of iPhones can reach the level where it becomes a truly attractive service platform for operator and developer investment.” – Tony Cripps, Ovum Service Manager for Mobile User Experience, March 14, 2007
• “I’m more convinced than ever that, after an initial frenzy of publicity and sales to early adopters, iPhone sales will be unspectacular… iPhone may well become Apple’s next Newton.” – David Haskin, Computerworld, February 26, 2007
• “There’s an old saying — stick to your knitting — and Apple is not a mobile phone manufacturer, that’s not their knitting… I think people overreacted to it — there was not a lot of tremendously new stuff if you think about it.” – Greg Winn, Telstra’s operations chief, February 15, 2007
• “Consumers are not used to paying another couple hundred bucks more just because Apple makes a cool product. Some fans will buy [iPhone], but for the rest of us it’s a hard pill to swallow just to have the coolest thing.” – Neil Strother, NPD Group analyst, January 22, 2007
• “I can’t believe the hype being given to iPhone… I just have to wonder who will want one of these things (other than the religious faithful)… So please mark this post and come back in two years to see the results of my prediction: I predict they will not sell anywhere near the 10M Jobs predicts for 2008.” – Richard Sprague, Microsoft Senior Marketing Director, January 18, 2007
• “The iPhone’s willful disregard of the global handset market will come back to haunt Apple.” – Tero Kuittinen, RealMoney.com, January 18, 2007
• “[Apple’s iPhone] is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine… So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.” – Steve Ballmer, Microsoft CEO, January 17, 2007
• “The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant… Apple is unlikely to make much of an impact on this market… Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.” – Matthew Lynn, Bloomberg, January 15, 2007
• “iPhone which doesn’t look, I mean to me, I’m looking at this thing and I think it’s kind of trending against, you know, what’s really going, what people are really liking on, in these phones nowadays, which are those little keypads. I mean, the Blackjack from Samsung, the Blackberry, obviously, you know kind of pushes this thing, the Palm, all these… And I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong, but I think Apple can do wrong and I think this is it.” – John C. Dvorak, Bloated Gas Bag, January 13, 2007
• “I am pretty skeptical. I don’t think [iPhone] will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed.” – Jack Gold, founder and principal analyst at J. Gold Associates, January 11, 2007
• “Apple will launch a mobile phone in January, and it will become available during 2007. It will be a lovely bit of kit, a pleasure to behold, and its limited functionality will be easy to access and use. The Apple phone will be exclusive to one of the major networks in each territory and some customers will switch networks just to get it, but not as many as had been hoped. As customers start to realise that the competition offers better functionality at a lower price, by negotiating a better subsidy, sales will stagnate. After a year a new version will be launched, but it will lack the innovation of the first and quickly vanish. The only question remaining is if, when the iPod phone fails, it will take the iPod with it.” – Bill Ray, The Register, December 26, 2006
• “The economics of something like [an Apple iPhone] aren’t that compelling.” – Rod Bare, Morningstar analyst, December 08, 2006
• “Apple is slated to come out with a new phone… And it will largely fail…. Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits… When the iPod emerged in late 2001, it solved some major problems with MP3 players. Unfortunately for Apple, problems like that don’t exist in the handset business. Cell phones aren’t clunky, inadequate devices. Instead, they are pretty good. Really good.” – Michael Kanellos, CNET, December 07, 2006
• “We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.” – Ed Colligan, Palm CEO, November 16, 2006
Wonderful ABSURDITY!.
RISKY Absurdity.
This is exactly why Apple’s P/E is so low. Say what you will about Wall Street, but they are a conservative bunch. And having all that disproportionate profit in ONE product is high-risk.
Why do you think Apple is so desperate to diversify into things like giant iPads, cars, music streaming, tv apps, etc. Yes, the iPhone is a great device. But, that doesn’t mean it will continue to rake in excessive profits.
As a shareholder, I, for one, would love to see them drop their profit margin. While it would affect overall profits, it would put downward pressure on other handset manufacturers. Samsung could not justify charging large amounts for their phones if a new iPhone is $600.
There really is no GOOD reason for the iPhone to continue to have such high margins. Do you remember when Apple used to announce price DROPS in its products? It’s been a while since we’ve seen that. Instead, we’ve seen a stingier Apple, using techniques such as keeping a 16GB iPhone around to push consumers to higher margin products.
I get that Apple is trying to transition to a luxury brand, but they used to be affordable luxury. Every person’s computer. THAT is more of a revolution to me.
@bluemeansgo: “…having all that disproportionate profit in ONE product is high-risk.”
Only for Apple though. Other companies that are based almost entirely on one product are given a pass by Wall Street.
By the way, don’t you just love how Wall Street ignores Apple’s $80 BILLION in annual revenue it earns from non-iPhone products? How stupid…
Usually those other companies have a significant market share to match the disproportionate profit in ONE product.. Apple is pretty unique in profiting so greatly from a single product that holds such a small proportion of the market share.. I think that’s where WS is looking and perceiving to be high-risk.
True, they earn a lot of money… but that money is dispersed among a lot of people. And a failure or a problem with iPhone affects a LOT of people’s pocketbooks… which is why Wall Street is more cautious.
I don’t like Wall Street any more than anyone else.
Other companies that consist of one product aren’t widely held in huge portfolios. They’re also high-risk, but investors don’t usually hold millions of dollars in them.
“And having all that disproportionate profit in ONE product is high-risk.”
Umm, the disproportion the article is talking about isn’t an issue for Apple, it’s an issue for everyone else. No-one else knows how to make any money. Their stock should be dropping.
Apple simply ISN’T as dependent on one product as others are on their main products. Google makes more than 90% on ads. MS still majors on Windows and Office.
Let’s put this in perspective. I just read how the REST of Apple’s businesses are HUGE. One of the others, Mac, I think, makes more revenue than ALL of Google. Forget iPhone, most companies would die for the revenues and profits Apple has in ANY of its businesses: Mac, iPad, Apps, Media, Services…
I agree. But that doesn’t matter. It doesn’t matter that the $ amount is larger than other companies. Stocks trade on % revenue gains, not $ gains. The more money invested simply means it’s usually dispersed among more people.
As a stock goes up, most investors will get rid of some of it once it makes up part of the portfolio.
A fund manager may make 10% of his portfolio AAPL. If Apple’s price increases 9x, while the rest of the portfolio only increases 4x, AAPL is now worth 25% of the portfolio and represents risk. So, 60% of the AAPL stocks are realized ( sold ) to reduce risk. The stockholder now owns a smaller share of the company, but it still consists of 10% of his portfolio. He gave 60% of his ownership up to other stock holders.
You take your profits when you can.
What I’m trying to say is that as a company grows, its stock price grows, gets sold, and gets dispersed among a wider audience of traders. As such, the size of the company in relation to other companies has little effect on the ticker price.
It’s all about how much increased growth is going to happen.
This is perhaps the stupidest comment I’ve ever read…
As you were
Booooooooooooom…….
Is this an euphemism for saying that Apple’s profit margin is 64 times that of the other smartphone makers?
Why is Apple reluctant to completely wipe out the other smartphone makers by reducing profit margins by half?
Reading all the quotes listed by MDN regarding the demise of the iPhone is like reading the transcript for one of the R or D debates. Nothing but bullshit that is 100% wrong.
This information should be used in a college course. The comments and prognostications are so wonderfully serious and so absurdly in error, and this is only a subset of the never-ending story of terrible pundits and analysts.
Beware before you pay any of these idiots or their organizations to manage your money. Learn about personal investment and handle it yourself. If you invest in low-cost, no-load index funds, you will outperform the vast majority of the managed funds over the long term. The reduction is fees relative to an actively managed fund almost guarantees that outcome.
I have said it before an it bears repeating — if an analyst is any good, he or she should be independently wealthy using their own investment guidance. In that case, why would they bother to pimp themselves for your money? These organizations and analysts make money from your money, even if you lose money.
I never tire and always chuckle a bit reading quotes from Colligan/Palm, Zander/Moto, Dvorak/Bloated Self, & Ballmer/Adams Family. I would love to get them all in a room to “review” their statements.
Also, though I’m passionate about Apple products and the related business, these kind of statements are instructional to me. Without personal vigilance/awareness, it’s possible for anyone to become a mindless, blind and pompous minion, or fanboy.
I wonder how many of the guys that were quoted are actually using an iPhone..
Fix your numbers. 87 + 14 = 101%.
A little thing called “rounding.” the 14% is actually 13.5% according to the text. But the message is the same.
A little thing called round to even:
http://mathematica.stackexchange.com/questions/2116/why-round-to-even-integers
86.5% should be rounded down to 86%.
Wow. After years of this reality, how can you not know that, other than Apple and Samsung, everyone else combined is LOSING money. In other words, >100% of industry profit by Apple and Samsung is real. Just had to pull the “I’m smarter than you” card?
Ack! I see you were (also wrongly) criticizing the unit sales.
Hoist by my own petard, it seems. 🙂
Charts like this make it easy for analysts to look intelligent when they wave it, point out Apple’s lack of market share and chant.
Apple is doomed, Apple is doomed (I won’t say it three times cause apparently if you do you lose half your mind and that leaves you with slim career options though you can still be a jouranalist.
The best MDN take in years!
Apple acquired a couple Israeli camera tech companies over the last few years and rumors of a major leap in camera for the iPhone 7 have popped up. If true, and coupled with Android security concerns, the dominance could easily turn into a chasm for Android.
Wow, and people can still quote this guy? Without an asterisk*?
“Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.” – John C. Dvorak, Bloated Gas Bag, March 28, 2007
John C. Dvorak got one thing right for his readers, “I’d advise people to cover their eyes. You are not going to like what you’ll see.” 🙂
Yeah, thats what she said! lol
Now if Cook would just stop single handedly destroying the company.
Ohhhhh, I get it. Armchair quarterbacks that second guess what’s going on are proven wrong 8 years later. If any of your opinions were worth anything I’d copy them and send them back to you in 2023. What these guys did not understand and what the critics on this site don’t understand is that the product you see today is the foundation for the product tomorrow. These guys saw an overpriced phone. What they did not see was a computer in your pocket. Or that a phone is used to communicate and there are more ways to communicate than through speech. The iPhone fundamentally changed not only the cell phone business but it also changed the computer industry. The first iPhone was only the first step and a lot of people questioned the technological decisions in that phone and many iterations after that.
Supply constraints at the launch of a new product are not an issue. Quality issues at the launch are. No one cares today about the supply constraints of first iPhone. No one seems to remember that at launch the iPhone had to be purchased outright at full price and than a few months later they changed to the subsidized model and had to give money back to all those who paid full price in the form of an Apple gift card. Talk about a botch! They gave store credit!
At MDN you are revisionists. There were no issues before Tim Cook. The iPhone was always great. It was born great. There were no missteps. Bull shit. The reality is that you make mistakes and you course correct. That is what happened then and that is what happens now.
What am I missing? Apple gets 94% of the profit and Samsung gets 11%. Whereas other than Apple, all other smartphone makers’ profits total 6%, yet Samsung gets 11%.
So there is more than 100% total profits for smartphone sales, according to this article – right? And samsung makes more than twice the …. cannot be.
Most bit players are loosing money. When you add in the losses you get to zero.
Please read the article before pulling out the keyboard…..
Skip ahead 2 or 3 years and I can’t wait to see the same types of comical quotes about the Apple Watch that we’ve been hearing for the last year. As a marketer I’ve witnessed the lack of understanding of how business works and good marketing strategy by my colleagues for years. Low price is not a good long term strategy. Making great products is. It continues to crack me up that people don’t understand how Apple does things and why they are successful.
Android:
iPhone:
https://youtube.com/watch?v=cSTEB8cdQwo
Any Questions?
So, Apple has to sell 14% of product to make 94% of profit where as the other guys make 6% of profit from only 87% of product? Seems like Apple has to sell a lot more product, twice as much, for only 7% more profit… :b