iPhone Accounts for Nearly 90% of Smartphone Industry Profits in Fourth Quarter

MacRumors · Feb 26, 2015

The latest numbers from Strategy Analytics reveal that Apple continued to dominate in global smartphone profit during the fourth quarter of 2014, capturing a record-high 88.7% share of profit during the three-month period ending December. Apple earned quarterly operating profit of $18.8 billion on iPhone sales, up from $11.4 billion during the fourth quarter of 2013.

"Global smartphone operating profit grew 31 percent annually from US$16.2 billion in Q4 2013 to US$21.2 billion in Q4 2014. Android hardware vendors combined took a record-low 11 percent global smartphone profit share, down from 29 percent one year ago. In contrast, Apple iOS captured a record-high 89 percent profit share, up from 71 percent in Q4 2013."

Overshadowed by the success of the iPhone 6 and iPhone 6 Plus, Android suffered a sharp decline in smartphone profit compared to its 29.5% share in the year-ago quarter. Android accounted for a record-low 11.3% share of global profit during the fourth quarter based on $2.4 billion in operating profit. Android had operating profit of $4.8 billion in the year-ago quarter. BlackBerry, Windows Phone and other mobile platforms recorded zero operating profit during the quarter.

These numbers reiterate that the smartphone industry is largely a two-horse race between Apple and Google, whether it be overall platform market share, enterprise market share or smartphone profit share. But if smartphone makers such as Samsung are unable to make decent profits based on the Android ecosystem, Strategy Analytics suggests that vendors may give more attention to alternatives such as Windows, Tizen or Firefox in the future.

Article Link: iPhone Accounts for Nearly 90% of Smartphone Industry Profits in Fourth Quarter

bushido · Feb 26, 2015

not really surprising considering what they charge for it

CFreymarc · Feb 26, 2015

This is why many developers refuse to work on the Adriod platform. Unless you have an ad driven, hardware enhancing or supscription based app, it is not worth it.

Awfisch · Feb 26, 2015

Many people see this as a bad thing because it shows Apple charges absurd amounts for their phones. While they may be expensive, I think it's a good sign. It shows that people actually want to buy iPhones. Other manufacturers are making little to no profits because they have to lower their prices so much in order to get people to buy their phones. Some companies are selling their phones at a loss just to clear inventory.

Nozuka · Feb 26, 2015

bushido said:
not really surprising considering what they charge for it

true, but more importantly people are actually willing to pay that price.

haruhiko · Feb 26, 2015

Samsung charges as much or even more than iPhone for their flagship models. And yet much less people buy them now and their profit dropped 60%+.

Iconoclysm · Feb 26, 2015

bushido said:
not really surprising considering what they charge for it

This is counting the profit for the hardware sold, not the OS.

the-msa · Feb 26, 2015

haruhiko said:
Samsung charges as much or even more than iPhone for their flagship models. And yet much less people buy them now and their profit dropped 60%+.

yes, because people dont HAVE to buy the expensive flagship models if they want android.

if apple would offer 100 or 200$ iphones, the numbers would be very similar.

scuac · Feb 26, 2015

Surely this means that Apple is doomed... sorry, I meant DOOMED, likeso many "experts" have been predicting for the past decade.

Traverse · Feb 26, 2015

Do you know what this means? Their stock will drop.

Wall Street wanted 91% of all profits.

bushido · Feb 26, 2015

Iconoclysm said:
This is counting the profit for the hardware sold, not the OS.

you dont say? i didnt know the OS costs money

macduke · Feb 26, 2015

But…but…but according to like 95% of people online, market share is what matters. Open your eyes sheeple, the end is nigh for Apple! There is no way they can survive on these incredibly massive profits alone if they aren't selling the majority of phones. They are clearly doomed! It's all marketing and hype and overpriced bendy phones. Apple steals all of their ideas from Android, like larger displays, and Steve never would have allowed that. Design isn't that important anyway, and neither is privacy. The only thing that matters are free web services, MOAR megapixels, and OLED even though I don't know what that means. Enjoy your walled garden. My Samsung Nexus One S5 Galaxy Droid is only 99 cents, so get wrecked Apple fanboys!

Did I cover everything?

DanGoh · Feb 26, 2015

iPhone Accounts for Nearly 90% of Smartphone Industry Profits in Fourth Quarter

I was gonna say Google needs to close down it's operating system a bit, and limit who can make an Android phone but that wouldn't help. Android is doomed.

aloshka · Feb 26, 2015

macduke said:
Butbutbut according to like 95% of people online, market share is what matters. Open your eyes sheeple, the end is nigh for Apple! There is no way they can survive on these incredibly massive profits alone if they aren't selling the majority of phones. They are clearly doomed! It's all marketing and hype and overpriced bendy phones. Apple steals all of their ideas from Android, like larger displays, and Steve never would have allowed that. Design isn't that important anyway, and neither is privacy. The only thing that matters are free web services, MOAR megapixels, and OLED even though I don't know what that means. Enjoy your walled garden. My Samsung Nexus One S5 Galaxy Droid is only 99 cents, so get wrecked Apple fanboys!

Did I cover everything?

no you pretty much got it

----------

DanGoh said:
I was gonna say Google needs to close down it's operating system a bit, and limit who can make an Android phone but that wouldn't help. Android is doomed.

Google pushed privacy and ads too much and I think people might be noticing (I think). I'm opened minded and was actually going to buy a nexus 6 yesterday but when I played around with it in the store I noticed Google maps now has a bar that gives you "suggestions" e.g. Paid ads of what is around an area. I thought for a close to $700 phone I don't want to see that. 100 dollar phone sure, but not a premium flagship.

2457282 · Feb 26, 2015

Maybe I'm off here, but Android slipping in profit makes sense. With a two horse race in OS and assuming people choose based on OS, once they have chosen android, what their next choice? To me it seems obvious that it would be price, so android devices are quickly becoming commodities. This will drive margins lower. If instead of buying based on the OS, people buy purely on price, they will end up buying an Android and again this makes the Android devices commodities. Apple's walled garden seems to ensure that they are never viewed as a commodity.

bwillwall · Feb 26, 2015

Hmm sounds like its time to reduce profit levels so they can actually sell at reasonable prices. Maybe they can take more of the market while still making just as much if they actually sold a phone that was cheaper than $450 off contract.

Traverse · Feb 26, 2015

bwillwall said:
Hmm sounds like its time to reduce profit levels so they can actually sell at reasonable prices. Maybe they can take more of the market while still making just as much if they actually sold a phone that was cheaper than $450 off contract.

Hehehehe. You're adorable. Reasonable prices...BWAHAHAHAHAHAHAHAHAH.

i do agree with you, but it won't happen.

MrXiro · Feb 26, 2015

macduke said:
Butbutbut according to like 95% of people online, market share is what matters. Open your eyes sheeple, the end is nigh for Apple! There is no way they can survive on these incredibly massive profits alone if they aren't selling the majority of phones. They are clearly doomed! It's all marketing and hype and overpriced bendy phones. Apple steals all of their ideas from Android, like larger displays, and Steve never would have allowed that. Design isn't that important anyway, and neither is privacy. The only thing that matters are free web services, MOAR megapixels, and OLED even though I don't know what that means. Enjoy your walled garden. My Samsung Nexus One S5 Galaxy Droid is only 99 cents, so get wrecked Apple fanboys!

Did I cover everything?

What is with the recent trend of typing with a stutter? It's like the online version of the ever annoying "vocal fry".

CEmajr · Feb 26, 2015

One has to wonder how long the multitude of Android vendors can last in the long term with near zero profits and losses. Sony is already considering exiting the market. Apple is absolutely crushing the industry. They really need to back to the drawing board and figure out what they're doing wrong.

MrXiro · Feb 26, 2015

bwillwall said:
Hmm sounds like its time to reduce profit levels so they can actually sell at reasonable prices. Maybe they can take more of the market while still making just as much if they actually sold a phone that was cheaper than $450 off contract.

Yeah... cause the smart plan after making boatloads of money while selling their product at high prices is to lower prices...

Someone needs to take a Business 101 class.

----------

CEmajr said:
One has to wonder how long the multitude of Android vendors can last in the long term with near zero profits and losses. Sony is already considering exiting the market. Apple is absolutely crushing the industry. They really need to back to the drawing board and figure out what they're doing wrong.

Well that's simple; too many options at too many varying price points. Samsung alone can be blamed for this... but when you add in ZTE, ASUS, MOTOROLA, HTC, LG and the hundred of other brands floating around on the Android hardware market you've basically built a 711 or similar competitor on every street corner...

taxiapple · Feb 26, 2015

macduke said:
Butbutbut according to like 95% of people online, market share is what matters. Open your eyes sheeple, the end is nigh for Apple! There is no way they can survive on these incredibly massive profits alone if they aren't selling the majority of phones. They are clearly doomed!

OMG, 90% of the profits, 700 Billion company and you think they are "clearly doomed"

macduke · Feb 26, 2015

taxiapple said:
OMG, 90% of the profits, 700 Billion company and you think they are "clearly doomed"

The joke -> ~~~WHEEEEE

Your head ->

Me ->

agsystems · Feb 26, 2015

CEmajr said:
One has to wonder how long the multitude of Android vendors can last in the long term with near zero profits and losses. Sony is already considering exiting the market. Apple is absolutely crushing the industry. They really need to back to the drawing board and figure out what they're doing wrong.

Exactly you just read my mind - even if you take Apple out of the industry - nobody is making any money.

Tankmaze · Feb 26, 2015

30% OS Share with 90% profit... not many companies can do that.

Mockenrue · Feb 26, 2015

Nozuka said:
true, but more importantly people are actually willing to pay that price.

Which is a shame, but inevitable when there's not competing iOS device maker. Apple can continue to increase profit margin by keeping certain key specs at a minimum (e.g. 1 GB RAM on iPhone 6), or by charging much higher prices for the simplest parts like increased storage. Yet, these profit stories always seem to elicit cheers and "take that Android" sentiment. Very puzzling to me...

iPhone Accounts for Nearly 90% of Smartphone Industry Profits in Fourth Quarter

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