Skip to main content

Apple Owns 92% Of Smartphone Profits

Anyone surprised by the news that Apple makes almost all of the profit in the smartphone market? I can't say I am, although basing it on a number that subtracts other company's losses makes the number look even larger than it really is.
Its easy to see why. The average selling price of an Apple iPhone is three to four times that of the industry average, despite costing little, if any, more to make. Those sky high profit margins ensure that Apple takes 92% of the profits despite selling only around 20% of the handsets.
There are other OEMs making profits, Samsung notably, but also Huawei and other smaller brands. Even Sony has managed to eke out profits from its Xperia smartphones. The profits might be small in comparison to Apple's, but they are profitable. For most OEMs these profits are being generated by selling lots of cheap phones at razor thin margins. For Sony it comes from selling fewer phones at better margins.
Whatever the case, if you aren't Apple - and to a much lesser extent Samsung - you are a niche player in the premium smartphone market and as a result aren't going to be making the sort of margin which allows you to book the enormous profits that Apple does. Samsung covers all bases, managing to sell lots of low end phones without tarnishing its premium brands in the process. Microsoft could potentially do the same, if it were able to drive some momentum behind its Lumia phones.
In the meantime it remains only to stand back and marvel at how Apple has managed to sell its brand of Kool-aid so widely and profitably.


Popular posts from this blog

F1: Robert Kubica Impresses In Renault Test Run

The car may be old but its the performance of the driver that's the story here. Robert Kubica returned to F1, after a fashion, earlier this week with an extensive test run in a 2012 Lotus Renault F1 car at Valencia.
The age of the car and the circuit were likely determined by F1's current rules which ban testing, but the reason for Kubica being in the car is far more interesting. Considered by many to be a potential World Champion and certainly one of the fastest drivers of his generation, Kubica's F1 career seemed to be over after a 2011 crash whilst driving in the Rally of Andora. His Skoda Fabia was penetrated by a guardrail in the high speed accident partially severing his right arm.
Up until last year Kubica has been competing in rallying, with the expectation that the limited movement in his repaired arm would prohibit a return to single seater racing.
So this week's test is both interesting and confusing. Interesting because Kubica completed 115 laps of the ret…

Panos Panay's Defence Of Microsoft Surface Hardware Sounds Eerily Familiar

This weekend I went out with my ten year old daughter to select a laptop for her school year beginning in January. The schools requirements are quite specific, requiring a Windows 10 device, with a preference for a touchscreen and a stylus. She chose a Surface Pro, after trying a large number of different options. Having seen the way I use my own Surface Pro - and tried it herself there was only ever going to be two options - and the other was a Surface Laptop.
I tell you this so that you understand I am a buyer of Microsoft's products through choice, not compulsion. I'm on my third Surface device now. 
So when Panos Panay dismissed reports of the death of the Surface hardware line, I was very interested to see exactly how strong these denials were. Especially how they reflect what has gone before. To whit: Windows 10 Mobile.
Panay claimed that Microsoft is in hardware for the long haul. Almost exactly mirroring the words of Terry Myerson, when he claimed Windows Mobile was g…

WhartonBrooks Indiegogo Windows 10 Mobile Even More Doomed To Failure Than Usual

WhartonBrooks is currently crowd-funding its latest Windows Mobile smartphone on Indiegogo. If crowdfunding isn't already a bad enough idea, a company trying to crowdfund a Windows Mobile device should be warning enough for you.
Not that anyone seems to be taking the project too seriously. With a few weeks left to run the campaign has managed to ensnare just 2% of its $1.1m target.
If you want a better indication of how few Window Mobile loyalists remain I doubt there is one. Of 3,900 Windows Phone enthusiasts Wharton Brooks was seeking for its new phone, it has managed to entice just 50.
Windows for Phones is dead, even if the corpse hasn't stopped twitching yet.