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[ZD] Apple Takes 89% Of All Smartphone Profits Worldwide

7K views 118 replies 63 participants last post by  [seandotcom] 
#1 ·
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http://www.zdnet.com/article/apple-takes-89-percent-of-all-smartphone-profits-worldwide/
Quote:
A record quarter following the launch of the iPhone 6 and iPhone 6 Plus has left Apple in control of nearly all profits in the smartphone business.

According to Strategy Analytics, with $18.8bn in operating profits for Q4 of last year, Apple took a record-breaking 89 percent share of the $21bn the smartphone industry made in profit that quarter.

While Apple's premium pricing combined with strong sales of iPhone 6 and iPhone 6 Plus helped drive its share of profits, Android handset makers slid to just 11 percent of all profits made by the industry, down from 29 percent in the corresponding quarter a year ago.

Over the period, Android handset makers' total profits declined from $4.8bn to $2.4bn.
 
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#2 ·
The Android smartphone market is even more unhealthy than the PC industry which has notoriously low margins. The problem is the vast majority of Android hardware manufacturers / phone makers don't make any profit at all. Its an unhealthy situation. At some point there will be a change and the Android ecosystem will see smaller companies go out of business and some serious consolidation into fewer, large companies.
 
#4 ·
Android makers just don't make as much $$ from their phones. They sell a hell of a lot more phones than apples does though.

Apple just overprices their phones, and knows people will buy them regardless of price.

When you can buy android phones packed full of more premium hardware, for cheaper than a iPhone. You know profit margins were sacrificed.
 
#8 ·
Quote:
Originally Posted by raghu78 View Post

The Android smartphone market is even more unhealthy than the PC industry which has notoriously low margins. The problem is the vast majority of Android hardware manufacturers / phone makers don't make any profit at all. Its an unhealthy situation. At some point there will be a change and the Android ecosystem will see smaller companies go out of business and some serious consolidation into fewer, large companies.
Android kinda needs that to happen right now. There's just a few too many small companies making too much crap. It's giving Android a bad rep.
 
#9 ·
Quote:
Originally Posted by DzillaXx View Post

Android makers just don't make as much $$ from their phones. They sell a hell of a lot more phones than apples does though.
Which might be good for Google or whoever has interest in expanding the Android ecosystem numerically, but doesn't change the fact that they don't make any money! I mean, selling 10x more phones and making 10x less money = super failure
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Quote:
Originally Posted by DzillaXx View Post

Apple just overprices their phones, and knows people will buy them regardless of price.
So, those are not overpriced. Overpriced = don't sell.

People don't pay for an ARM chip with 1GB RAM, they pay for being part of the "cool kids" that hold a fancy iphone, much like ppl that buy a Porsche don't weigh the steel and leather, nor go for HP/$ spend. You buy a "club membership" with that money, the device or car is just the "key" to the club.

I could care less for iPhones and I am kinda anti-Applish as far as the ways they try to fortify their business, abuse & shush smaller companies through litigation etc, but man, hats off!
 
#10 ·
Quote:
Originally Posted by pcfoo View Post

Which might be good for Google or whoever has interest in expanding the Android ecosystem numerically, but doesn't change the fact that they don't make any money! I mean, selling 10x more phones and making 10x less money = super failure
tongue.gif

So, those are not overpriced. Overpriced = don't sell.

People don't pay for an ARM chip with 1GB RAM, they pay for being part of the "cool kids" that hold a fancy iphone, much like ppl that buy a Porsche don't weigh the steel and leather, nor go for HP/$ spend. You buy a "club membership" with that money, the device or car is just the "key" to the club.

I could care less for iPhones and I am kinda anti-Applish as far as the ways they try to fortify their business, abuse & shush smaller companies through litigation etc, but man, hats off!
Google couldn't really care less actually. Google doesn't make money off of Android handset sales as far as I know, they make money off of people buying things through the app store. So more phones out there is more beneficial for Google.
 
#13 ·
Quote:
Originally Posted by darealist View Post

I went from android to ios. Never going back. Feels way more secure thanks to superior fortress-wall design--- as if I'm safe in my own castle. Going back who be like living in open fields, waiting for the mongols to raid.
You mean you're safe inside Apple's castle... as long as you keep giving Apple money.
 
#14 ·
Quote:
Originally Posted by darealist View Post

I went from android to ios. Never going back. Feels way more secure thanks to superior fortress-wall design--- as if I'm safe in my own castle. Going back who be like living in open fields, waiting for the mongols to raid.
If you're that concerned about security neither iOS or Android are secure at stock.

Consider Blackberry or a Black Phone.
 
#16 ·
Android market is competitive but not in an unhealthy way. The smartphone market is growing really fast and if you're the first to reach first time users they usually stick with that brand.

Apple is reaping profits while everyone else is investing.
 
#18 ·
frick, i think that is probably your best avatar yet
 
#19 ·
They also take 89% of their customers' wallets worldwide.
Quote:
Originally Posted by pcfoo View Post

That's what I'm saying: Google might be happy as their userbase / data collection / play store etc increases and at any rate they make their money indirectly though increased phone sales, but phone makers having such small margins, cannot be good.
I wouldn't really say they have "small margins," they most likely just have what a "normal" profit margin is expected to be. Apple's profit margin per product sold is just enormous in comparison, hence why so many people rightfully label them as overpriced. I believe the iPhone 6's profit margin is in the ballpark of 70%.
 
#23 ·
Quote:
Originally Posted by Tsumi View Post

With Android, you get more for less. With Apple, you get less for more. That's how it works.
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This sums it up well
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Quote:
Originally Posted by smithydan View Post

So true, with Android you do get more for less lol... more bloatware, more spyware, more headache, more cleaning, more freeing up memory, more inconsistency, more people changing back over.
With Apple, you get more ignorant rambling, confirmation bias, fanboyism, and a tendency to ignore facts... Lets also not forget about the sunk cost fallacy...
 
#24 ·
Quote:
Originally Posted by raghu78 View Post

The Android smartphone market is even more unhealthy than the PC industry which has notoriously low margins. The problem is the vast majority of Android hardware manufacturers / phone makers don't make any profit at all. Its an unhealthy situation. At some point there will be a change and the Android ecosystem will see smaller companies go out of business and some serious consolidation into fewer, large companies.
It was the quarter that apple launched the first true upgrade for the iphone in years and one that brought it up to par in screen and form with current industry offerings. Of course they have had record sales and profits. The question is how will they be able to replicate this success.
 
#25 ·
Here is the actual chart from Strategy Analytics:



What should be more interesting is why Android profits were cut in half from Q4 2013...
 
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