Apple Captured 79% of Global Smartphone Profits in 2016

[MacRumors]

The iPhone captured 79 percent of global smartphone profits in 2016, according to new research from Strategy Analytics obtained by The Korea Herald. Global smartphone profit stood at $53.7 billion, with Apple's iPhone profit accounting for $44.9 billion.

Apple held 14.5 percent global smartphone marketshare in 2016, second behind Samsung's 20.8 percent global marketshare. For comparison, Samsung, which posted an $8.3 billion profit, accounted for 14.6 percent of global profits in 2016.

The Cupertino company typically dominates global profit share despite not holding a large amount of marketshare in the smartphone segment. In the first quarter of 2015 alone, Apple accounted for 92 percent of global smartphone profit on 20 percent of actual smartphone sales. Similarly, in the fourth quarter of 2014 Apple captured nearly 90 percent of smartphone profit.

Much of Apple's success in late 2014 and early 2015 can be attributed to the popularity of the iPhone 6 and 6 Plus, sending Android global profit share down to 11.3 percent during the fourth quarter of 2014, down from 29.5 percent in the fourth quarter of 2013.

The popularity of the iPhone 7 and 7 Plus helped bolster a .5 increase in smartphone shipments year-over-year in the fourth quarter of 2016, edging Samsung to make Apple the world's top smartphone maker in the quarter.

Article Link: Apple Captured 79% of Global Smartphone Profits in 2016

 

[sblemmy]

"Winning for Apple is not about making the most..."

This should silence the Cook-haters for a day or so.

 

[Christian 5G]

I will now be able to bring this up in my technology class next time.

 

[otozuz]

Wow, that's a lot

 

[realeric]

I don't like this news. Apple is greedy.

 

[tillsbury]

I don't like this news. Apple is greedy.

So, you believe that the reason Samsung only made $8b profit last year is because they were being altruistic? I don't get it...

 

[v0lume4]

Not surprised. Apple's supply chain prowess and ability to command a 40-50% markup is unmatched. It really is remarkable -- I can't name another company pulling in similar margins. It sucks for us, the consumer, since iPhones cost ~$700+. But we keep buying.*

* we - The general public

 

[Cole Slaw]

Well this is good news.
I'm hoping the next iPhone costs at least $1500 so they can make even more money!

 

[fyun89]

In other words, we're paying for our iPhones with mark ups way higher than other phone companies..

It's understandable as Apple is a corp and need to make money to sustain and make investors happy. The fact that people would still buy the expensive phone means that it's worth the premium.

However, I feel the suppliers are the ones feeling the pain out of this.. I really hope Apple could some how make them happy as well.

 

[macfacts]

... The Cupertino company typically dominates global profit share despite not holding a large amount of marketshare in the smartphone segment. ... Much of Apple's success in late 2014 and early 2015 can be attributed to the popularity of the iPhone 6 and 6 Plus, ... The popularity of the iPhone 7 and 7 Plus helped bolster a .5 increase in smartphone shipments year-over-year in the fourth quarter of 2016, ....

Popularity has nothing to do with Apple's success. Popularity means most market share. It is the huge profit margin that makes Apple the leader in profits.

The introduction of the plus model increased the profit margin, that lead to Apple's increased success. Nothing to do with popularity. Maybe the correct word would be fashionable.

 

[DUIduckSAUCE]

Popularity has nothing to do with Apple's success. Popularity means most market share. It is the huge profit margin that makes Apple the leader in profits.

The introduction of the plus model increased the profit margin, that lead to Apple's increased success. Nothing to do with popularity. Maybe the correct word would be fashionable.

In 2016 iPhones accounted for two of the top three selling mobile phones worldwide. Apples flagships are more popular than other companies flagships. Flagships are where the profits are. I'm not sure where they stood in 2017.

 

[now i see it]

Since when is making excessive profit at the expense of all of us a good thing? It's kind of a nasty statistic. Hooray hooray, Apple gouges its customers deeper than anyone else.

 

[Cole Slaw]

Since when is making excessive profit at the expense of all of us a good thing? It's kind of a nasty statistic. Hooray hooray, Apple gouges its customers deeper than anyone else.

It's the way Apple has always operated.
Tim's just honed it into a fine, and very lucrative, art.
I expect that Tim will push this even harder this year ($$$) with the iPhone X (8?) to see just how far up the bum consumers will be willing to take it.

 

[can$rules]

Isn't 79% kind of low for Apple, when it was about 90% in the past? Is this the beginning of a trend to reduced profitability?

If they lose their big margins they'll be in trouble as they don't have the market share anymore.

 

[fitshaced]

Isn't 79% kind of low for Apple, when it was about 90% in the past? Is this the beginning of a trend to reduced profitability?

If they lose their big margins they'll be in trouble as they don't have the market share anymore.

There's always more smartphones on sale year on year and so the market percentage will typically shrink as more competitors join the race. 10 million more smartphone sales above last year could still see your market percentage decline.

I agree with all those seeing this as non news, unless you are an Apple shareholder.

 

[Abazigal]

Only 79%?!?

Where's my 104%?!?

 

[djcerla]

I can't name another company pulling in similar margins. It sucks for us, the consumer, since iPhones cost ~$700+. But we keep buying.*

* we - The general public

Yes?

A Samsung high end phone costs basically the same, but after 2 years it's worthless.

An used iPhone keeps an unbelievable value, because 1) Apple never discounts phones at mid life like all others and 2) iPhones are in high demand.

Sticker price is only a part of the equation.

 

[polee]

Now why am I not surprised that Apple has made such a high margin of profits and why this will continue as long as we keep buying the iphone.

 

[err404]

I am assuming that this percent has nothing to do with Apple's margins on the iPhone. That amount is not it public information. They are referring to sales. Essentially all this means is that majority of the competition is very inexpensive (aka low end) smartphones.

 

[69Mustang]

A Samsung high end phone costs basically the same, but after 2 years it's worthless.

An used iPhone keeps an unbelievable value, because 1) Apple never discounts phones at mid life like all others and 2)

You're making points that have nothing to do with @v0lume4 quote nor the topic of the article.

This is about profits and percentages of said profits. The resale value of used iPhones and Galaxies have nothing to do with those profits. In fact, each sale of one of those "used iPhone keeps an unbelievable value" actually takes profit away from Apple.

Apple never discounts phones at mid life? Uh, that's not true. Outside of the debut period, iPhones can be found discounted as low as BOGO (buy one get one) pricing through multiple carriers. I think AT&T is still running that promo now. Speaking of AT&T, they're one of Apple's biggest customers. Not you and me. The vast majority of Apple's iPhone profit comes from their primary customers: telcos, big box retailers, etc. For the most part, Apple doesn't get paid when you go into a store to buy a phone. Apple was paid long ago when that phone was put on a boat, truck, or plane and shipped to their customers.

 

[djcerla]

You're making points that have nothing to do with @v0lume4 quote nor the topic of the article.

This is about profits and percentages of said profits. The resale value of used iPhones and Galaxies have nothing to do with those profits. In fact, each sale of one of those "used iPhone keeps an unbelievable value" actually takes profit away from Apple.

Apple never discounts phones at mid life? Uh, that's not true. Outside of the debut period, iPhones can be found discounted as low as BOGO (buy one get one) pricing through multiple carriers. I think AT&T is still running that promo now. Speaking of AT&T, they're one of Apple's biggest customers. Not you and me. The vast majority of Apple's iPhone profit comes from their primary customers: telcos, big box retailers, etc. For the most part, Apple doesn't get paid when you go into a store to buy a phone. Apple was paid long ago when that phone was put on a boat, truck, or plane and shipped to their customers.

Apple never discounts phones mid-life. Go to their Apple website and you will find no discounts, other than the refurbs.

As for the consumer, which is the point of the post I replied to, Apple's profit margins are a non-issue as long as they keep the device in good conditions and resell it to, again, an unbelievable residual value with no peer in the consumer electronic industry.

As IBM, Disney et al happily discovered with the Mac, the Apple product can be less expensive (and arguably, much better) than the competition when TCO is evaluated.

 

[H2SO4]

Didn't they capture 110% of industry profits not so long ago?

 

[69Mustang]

Apple never discounts phones mid-life. Go to their Apple website and you will find no discounts, other than the refurbs.

A bit disingenuous don't you think? Apple's website. Okay. If we're going to do that, then you can say no OEM discounts their phones.

As for the consumer, which is the point of the post I replied to, Apple's profit margins are a non-issue as long as they keep the device in good conditions and resell it to, again, an unbelievable residual value with no peer in the consumer electronic industry.

That's a pretty big caveat. Some people resell their phones. Just as many people pass their phones down to family members, friends, etc.

Apple's profit margins are a non-issue because Apple charges what the market will bare. Period. As long as their pricing is acceptable to the market why would they charge any less? It's a for profit, public company with a fiduciary responsibility to it's shareholders. Nothing more, nothing less.

As IBM, Disney et al happily discovered with the Mac, the Apple product can be less expensive (and arguably, much better) than the competition when TCO is evaluated.

Where are you going with this and what does it have to do with iPhones?

 

[keithtae]

Didn't they capture 110% of industry profits not so long ago?

Omg yes! And I remember it used to be 90+% and now it has dropped to 79%

 

[H2SO4]

A bit disingenuous don't you think? Apple's website. Okay. If we're going to do that, then you can say no OEM discounts their phones.


That's a pretty big caveat. Some people resell their phones. Just as many people pass their phones down to family members, friends, etc.

Apple's profit margins are a non-issue because Apple charges what the market will bare. Period. As long as their pricing is acceptable to the market why would they charge any less? It's a for profit, public company with a fiduciary responsibility to it's shareholders. Nothing more, nothing less.


Where are you going with this and what does it have to do with iPhones?

Round in circles and nothing. This guy has never had any Apple product go wrong.
[doublepost=1488982707][/doublepost]

Omg yes! And I remember it used to be 90+% and now it has dropped to 79%

My bad. It was 104%, and here’s the link.