A Graphical Look at Apple's Share of Mobile Phone Industry Profits

Discussion in 'iOS Blog Discussion' started by MacRumors, Sep 24, 2010.

  1. macrumors bot

    MacRumors

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    #1
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    Earlier this week, we noted that Apple's share of mobile phone industry profits had risen to 39%, topping that of the top three handset manufacturers (Nokia, Samsung, and LG) combined. Asymco expands on that topic of discussion to offer an interesting graphical look at how Apple's share of profits has grown over time, primarily at the expense of the previously-dominant Nokia.
    The report asks whether the Android platform will be able to shift the profit distribution over time, seeing as how Apple, Research in Motion, and Nokia make up the lion's share of profits and are unlikely to adopt Android in the future.

    The graph demonstrates that Motorola and Sony Ericsson have both managed to return to profitability as they step into the Android platform but the report notes that they also face the challenge of smaller local brands such as China's ZTE and other emerging markets as likely competitors for profit share as they all push forward on Android while the primary profit makers continue to differentiate themselves with their unique platforms.

    Article Link: A Graphical Look at Apple's Share of Mobile Phone Industry Profits
     
  2. macrumors 68040

    elppa

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    Nov 26, 2003
    #2
    As the red and purple blocks all but disappear for most of the graph, I take it that means LG and Sony hardly make any profit at all from their phone divisions?

    I also find in interesting that the mindshare/brand awareness of HTC has increased dramatically in the time of the chart, yet their profits have barely increased.
     
  3. macrumors 65816

    SkippyThorson

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    Utica, NY
    #3
    I send my commendations to the one who drew that magnificent graph in Microsoft Paint, and chose to use 2 greens and 2 blues as opposed to including brown / black / orange / pink / etc... :)
     
  4. macrumors demi-god

    kdarling

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    #4
    The graph doesn't show the fact that the overall market is growing and that each individual company is probably making more each year and is not losing anything it would've have had anyway.

    Apple has created a large part of the current smartphone market income. In other words, Apple's share is mostly smartphone income that wouldn't have existed before at all.

    We need a percentage share graph that itself grows larger with the overall totals.
     
  5. macrumors regular

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    Jul 12, 2007
    #5
    Remember, profit isn't the same as sales.

    Apple has a high margin and fewer models that are refreshed yearly. Fewer models with less frequent refresh means their R&D dollars are concentrated, and a higher margin means they need to sell fewer of them the recoup the R&D budget.

    Most of the competition, especially HTC and Motorola, have a wide array of models that are refreshed frequently and tend to sell with a lower margin due to direct competition (notice all the "Buy two for the price of one" deals on Android phones earlier this year?). This means that models need to sell like wildfire to recoup their R&D budgets.

    Meanwhile, 2 year contracts with expensive "buy outs" mean that the pool of consumers at any given point in the product lifecycle is pretty small. Apple, due to its much critiqued tight relationship with AT&T, negotiated a relaxation of contract requirements for its existing customers, increasing the size of the consumer pool.

    I think we'll eventually see phone manufacturers backing off a bit, and releasing fewer devices at wider intervals. Does it really make sense to pump out the Hero, Eris, Aria, Desire, Incredible and EVO all within a year?
     
  6. macrumors member

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    Feb 3, 2004
    #6
    No profit isn't the same as sales, but it is far more important. Because not only does the profit show Apple's explosive growth and better manufacturing and margins now, it is a far greater predictor of future dominance than sales graphs.

    With this kind of profit, Apple will be able to plow this back in to all kinds of minutia, patents, software, ecosystem, peripherals, app store, developer relations, data centers, back ends, etc. Improvements that on the whole dwarf anything their competitors can offer.

    Can I do something really geeky and powerful with the Droid that I can't do with an iPhone. Heck yeah. Do I want to spend my life hacking and maintaining release after release and app after app to get the right combinations and form an overall user experience on a Droid? Hell no. And I am a technical user. For the vast majority it's an even stronger HELL NO.

    User experience matters.
     
  7. macrumors regular

    7o7munoz7o7

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    Bay Area
    #7
    yeah i see the same. maybe its because they have so many specials, buy one get one free....they cant be making too much when they give their phones away....i know thats not a direct result to the phone manufacturer, but could have something to do with it
     
  8. macrumors 65816

    res1233

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    Brooklyn, NY
    #8
    My thought exactly. The world "Available" is even spelled wrong. Not the best graph I've ever seen. :p
     
  9. macrumors 65816

    Dhelsdon

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    Canadian Eh!
  10. macrumors 65816

    SkippyThorson

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    #10
    I lol'd. :D
     
  11. macrumors 6502a

    swarmster

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    Jun 1, 2004
    #11
    Exactly. I'd like to see this accurately scaled (meaning, the right side of the graph would be much taller than the left side). It looks to me that RIM has managed to at least keep pace with the ballooning profit-market, which is impressive for a previously-entrenched company. Nokia's clearly been far more stagnant, but it's absolutely impossible to tell if their profits have gone up or down, and by how much.
     
  12. macrumors regular

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    May 2, 2008
    #12
    Give them a break!
    Come on people round of applause to the Jefferson Elementry kinder garden class :p
     
  13. macrumors newbie

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    Jan 30, 2009
    #13
    I'd take higher profit over units sold 7 days a week.... I think what you mean to say is profit margin...
     
  14. macrumors 6502a

    Lostanddamned

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    #14
    I'm pretty colourblind and I kinda thought that this was my mistake...
     
  15. macrumors 68000

    deannnnn

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    #15
    I can't believe Nokia still exists. Most of their sales are overseas, I guess they just gave up on America.
     
  16. macrumors member

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    Location:
    Finland
    #16
    Nokia 2nd most profitable?

    It looks like Nokia is still making more profit than any of the companies that adopted Android - only Apple doing better.

    Android has turned HTC into a household name but they are not doing any better than they did before Android.
     

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