Apple's Share of Mobile Phone Industry Profits Reportedly Rises to 39%

Discussion in ' News Discussion' started by MacRumors, Sep 21, 2010.

  1. macrumors bot


    Apr 12, 2001


    Fortune reports on a new research note from Canaccord Genuity analyst T. Michael Walkley which compares Apple's performance in the mobile phone industry to that of some of the other major players for the first half of 2010. According to the report, Apple sold 17 million iPhones during the first half of the year, a minuscule fraction of the 400 million handsets sold by top manufacturers Nokia, Samsung, and LG combined. But when looking at industry profits, Apple snagged 39% of the pie while the other three companies combined to take only 32%.
    Walkley goes on to note that Apple "leads the industry in every metric except for unit share".

    The data points to a continuation of a long-standing trend in the mobile phone industry that saw Apple taking 20% of profits in 2008 and 32% of profits in the first half of 2009.

    Article Link: Apple's Share of Mobile Phone Industry Profits Reportedly Rises to 39%
  2. macrumors 65816


    Sep 15, 2009
    Hermitage, TN
    So this proves that Apple is price gouging all of us :(
  3. macrumors 65816


    Jan 5, 2010
    Almost Rock Solid
    Glad to hear it

    Good for Apple! I think we'll be seeing more statistics like that in other areas soon.

    One small nitpick: the profit pie chart is drawn as though the two "slices" add up to 100%, or a whole pie. But in fact 39% + 32% only add up to 71%. So roughly 1/3 of the pie should either be empty or occupied by some other companies' slice...
  4. macrumors 6502a

    Oct 28, 2008
    Hard to say... iPhones are in the same price range as most Android phones, and the total cost over two years is price competitive with others out there.
  5. macrumors member

    Apr 5, 2006
    Bad Chart

    As noted by commenters in the Fortune Report, that 39% takes up more that 50% of the pie.

    They seem to have updated the chart on their end.

    While super impressive, the measure against industry smartphones is really the most appropriate analysis. At least until apple comes out with a low end phone (they won't)
  6. macrumors demi-god


    Jun 9, 2007
    Device engineer 30+ yrs, touchscreens 24+.
    Good thing Apple's making so much money off their customers, since their market share continues to decline in relation to Android.

  7. macrumors 65816


    Aug 29, 2009
    "City of Lakes", MN
    Not surprising since it's the best phone out there :D
  8. macrumors 6502a


    Mar 16, 2006
  9. macrumors 65816


    Jan 8, 2009
    Cue everyone celebrating that apple sell people less phone to people for more:rolleyes:
  10. macrumors 6502

    Oct 22, 2008
    God for Apple, but very unprofessional analysis. As neither of the charts represent the 100% of the market they should have used a bar chart instead of the somehow misleading pie. IMHO the analyst is just a guy trying to have his name in the media, and he has!
  11. macrumors 6502


    Feb 18, 2007
    New York City
    Hardly the case. This is US smartphones only, not worldwide. Android is on several carriers in the US, while the iPhone is only on AT&T.
  12. macrumors 65816

    Sep 29, 2009
    But their unit sales are continuing to increase. Quoting market share numbers like the mean something in such a rapidly expanding market is pointless. You make it sound like Android is hurting Apple in some way, yet what do they report every quarter? Record unit sales and profits.
  13. macrumors 6502a


    Jan 23, 2003
    Apples != Oranges

    Well, wait now. Apple doesn't lead the market in unit sales, but how much of those unit sales numbers are made up of throw-away phones? That is, phones that are either given away under contract or super-cheap pay-as-you-go phones?

    The only reason Apple isn't leading every metric in the mobile market is that they don't play in the low-rent portion of the market. Remarkably similar to their positioning in the PC market as well - they don't make machines that compete with the very cheapest PCs available.
  14. macrumors 68000


    Jul 1, 2009
    The problem Apple has right now is their lock-in with AT&T. They have pretty much dried up that entire customer base for market share. I'm sure that exclusivity contract can't end soon enough for Apple, especially with the pent-up demand among Verizon customers to get their hands on a Verizon iPhone.
    (8 million current Verizon customers would move to the iPhone should it become available on the carrier)

    I still think that Google made a huge error by selling the Nexus-One with T-Mobile instead of with Verizon, but still HTC and Motorola did a good job of capitalizing on that pent-up demand with Verizon customers with the Verizon "Droid" branded phones. The question now is how sustainable that growth is (eventually the pent-up demand will dry up) and how loyal those Android customers are going to be (i.e.: how many got a Droid because they wanted something but could not get an iPhone). Only time will tell, but it will be interesting to see how it all plays out.

    If Google can gain enough mind-share with Verizon customers to keep them loyal in order to fend off an Apple iPhone then that will be a major factor in deciding Android's success.
  15. macrumors newbie


    May 12, 2010
    El Cerrito, CA
    Profit does not automatically mean price-gouging

    Only if you believe the value you receive is not equivalent or less than the price you paid *and* if you think Apple should not have resources to spend on R&D.

    I happen to think the price I paid is fair and I want Apple to create future products. I don't think of my phone as a commodity (yet).
  16. macrumors 65816

    Sep 29, 2009
    The charts show 100% of the data they presenting. They are directly contrasting Apples profits against the combined profits of Nokia, Samsung and LG. Between those four companies, Apple has 55% of the profits, which is what the chart depicts.

    It is the proper way of presenting that chart since it is folowing the same rules as the previous one. Percentages are not special, they are data points like anything else. I guess it would have been less confusing if they provided the profits in millions of dollars, but what they did isn't really wrong.
  17. macrumors newbie

    Jul 27, 2010
    True, but by the analysis RIM is doing great as well.
    Their profits are up huge this past quarter.

    I think people are trying to read the tea leaves - not necessarily to say that Apple is going to be unprofitable next quarter - heavens no.

    But that Apple - yes because they aren't on any carriers pay-as-you go options, not even AT&T's, because they aren't on T-mobile and Sprint. Because they aren't on Metro PCS, Cricket or any other regional carrier - for all the excuses made, they are losing marketshare in the U.S.

    It's not that Apple isn't owning the most profitable part of the market, but they aren't taking the 'additional profits' that are available in other segments of the market.

    And in the long run, I think people are watching marketshare, and not just overall profits.

    Google's strategy with Android - does appear to be working in the sense that Android is gaining marketshare at a rapid clip. Will Google make money? Probably, looks that way, although their model for making money is completely different from Apples - and they don't even get included on these charts.

    So...we put out a chart that highlights something positive for Apple - and no doubt it is a positive.

    I'm still interested in the marketshare #'s though, because those pay-as-you go phones, are still phones. Among those phones, some apps will be purchased. The other carriers - are still carriers - among the customers of those carriers, apps will be purchased.
  18. macrumors regular

    Sep 14, 2003

    No it means that selling low end to get market share does not equal profit share.
  19. macrumors demi-god


    Jun 9, 2007
    Device engineer 30+ yrs, touchscreens 24+.
    I agree with you. Share charts, especially while the overall market is growing, certainly don't show how much each company's individual sales are rising (or not).

    They had those things even the first year. Should they have stopped at that original number ? Heck no. There's always room for more.
  20. macrumors 65816

    Sep 29, 2009
    I can't count the number of consecutive record quarters Apple has had on one hand. It's amazing that the likes of HTC, Motorola, Samsung, LG etc. can combine their sales growth to edge out Apple. Perhaps it would be more appropriate to contrast Apple's unit sales in smartphones against other phone manufacturers, since that's what Apple is.

    The only place where marketshare has any significance at all is with apps, and the Android Market is not nearly as profitable for devs as the App Store. I think the mac has shown that you can get pretty good developer support with 5% marketshare, and it doesn't have an advantage like the App Store.

    Yes, a lot of people look at marketshare, because it allows them to thump their ePeens, but the percentage of phones running a free OS vs the percentage of phones running an OS that is sold on one phone is hardly a relevant comparison.
  21. macrumors 68040

    Dec 14, 2006
    somewhere else
    No, it means selling low-end phones isn't very profitable.
  22. Administrator/Editor


    Staff Member

    Jan 20, 2005
    We've added in the revised charts. The initial charts showing only Nokia/Samsung/LG versus Apple in a pie chart format were definitely odd.

    The new ones should be much more clear. :)
  23. macrumors regular

    Sep 7, 2008
    Southwest PA
    As a consumer, I could care less about "profit share" or how much money the company of any product earns... As a matter of fact, no thinking or rational person would buy a product based on the criteria of a manufacture's profit.

    You guys are really brainwashed...
  24. macrumors regular

    Sep 7, 2008
    Southwest PA
    Why would I care as a consumer?
  25. macrumors 6502a

    Apr 25, 2008
    And this is achieved with only one phone model per year. That is awesome.

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