Apple snags 50% of handset industry profits ahead of first 100M iPhone year

Discussion in 'Apple, Inc and Tech Industry' started by *LTD*, Jul 8, 2011.

  1. *LTD*, Jul 8, 2011
    Last edited: Jul 8, 2011

    *LTD* macrumors G4

    *LTD*

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    #1
    http://blogs.barrons.com/techtrader...accord-sees-further-north-america-share-loss/

    http://www.macobserver.com/tmo/article/canaccord_bumps_aapl_target_to_500_on_strong_iphone_sales/

    http://www.appleinsider.com/article..._profits_ahead_of_first_100m_iphone_year.html

    Apple snags 50% of handset industry profits ahead of first 100M iPhone year



    In less than four years, Apple went from not making a dime on handset sales to commanding approximately half of the industry's profits, and is now poised to set the bar even higher by shipping 100 million iPhones over a 12-month span, financial experts say.

    Although smartphones running Google's Android OS continue to gain share of total smartphone units sold, when it comes to profits, Apple remains the undisputed king, raking in roughy 50% of the entire handset industry's net earnings during the first quarter of 2011, according to Canaccord Genuity analyst T. Michael Walkley.

    "Our [June] checks indicated continued strong sales of the iPhone 4, as it remained by far the top-selling smartphone at AT&T and Verizon despite the continued popularity of 4G smartphones and several new high-end Android smartphones," he said.

    At Verizon Wireless in particular, Walkley said his checks indicated the iPhone 4 was the #1 selling smartphone during June despite six new high-end Android smartphones from OEMs such as HTC (Thunderbolt – LTE, Incredible 2), Motorola Mobility (Droid X2), Samsung (Droid Charge - LTE), Sony Ericsson (Play), and LG (Revolution – LTE) launching in the last couple months.

    "Further, with Verizon not allowing subsidies to customers that are still under a two-year contract, we anticipate steady upgrades by Verizon customers to the iPhone will continue over the next several quarters," he said. "As a result, we believe the iPhone will remain the top- selling smartphone at Verizon throughout 2011."

    That said, Walkley is forecasting Apple's share of smartphone unit sales to actually fall from an estimated 16.0% in 2010 to just 15.2% by the end of 2012. However, as consumers continue to trend towards smartphones, that 15.2% will equate to just over 100 million units, or roughly 25 million iPhones per quarter.

    During the same period, the analyst estimates that smartphones running Android will see their share of the market soar from an estimated 22.6% to a market dominating 50%, jumping from 67.2 million units to 329 million units.

    [​IMG]

    Still, Apple's iOS installed base is believed to be the key differentiator for Apple, as it runs on the iPad and iPod touch in addition to iPhones. As such, Walkley is modeling the iOS base to rise rapidly from 250 million devices in 2011 to 415 million by the end of 2012, easily outmatching Android to remain the industry's leading mobile operating system.

    The analyst noted that his models assume Apple will not launch a lower-tier iPhone during 2012. Instead, he believes Apple will ship a modest mix of older iPhone versions such as the 3GS and iPhone 4 in order to create a more tiered portfolio. And even with those yesteryear designs, he still sees the company achieving its well-above-average gross margins despite the sub $400 average selling price the models will generate.

    [​IMG]

    However, should Apple decide to introduce a new lower-tiered iPhone, Walkley's forward-looking market share estimates for the company could prove conservative.

    "Perhaps the strong unit market share growth for Android could result in Apple introducing a broader portfolio of iPhones in order to better compete in more price sensitive emerging markets," he said.

    Walkley reiterated his Buy rating on shares of the iPhone maker, raising his price target from $485 to $500 per share.

    ----------------------------------------

    Key takeaway:

    Forget the profits and the top-selling handset news for a moment, and instead focus on the insane proliferation of iOS: a closed, unlicensed OS.

    Food for thought.
     
  2. kdarling macrumors demi-god

    kdarling

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    #2
    My first thought was:

    Wow! 660 million smartphones to be sold in 2012 alone.

    My second thought was:

    Microsoft gets Exchange Activesync royalties on 560 million of those, WinMo licenses on 70 million, plus patent fees on 330 million Android phones.
     
  3. KingCrimson macrumors 65816

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    #3
    If that many people can afford $80-$90/month smartphone plans then the economy must be roaring! But that doesn't jive with the latest jobs news! :confused::confused:
     
  4. TheSideshow macrumors 6502

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    #4
    How about we focus on what benefits us, the consumers.
     
  5. Rodimus Prime macrumors G4

    Rodimus Prime

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    #5
    To me that is really meaningless unless the iPhone out sold all 6 of them combined. The 6 Android phones are going to split the sells among each other. Putting 2 Android models means each will only get 50% of the sales and at most you might see a 10% increase in total sells.
    Now you have 6 phones split roughly the same total number of possible sales.

    People keep making that argument that I quoted but really it means nothing because you have to remember sales are divide up among 6 players.
     
  6. BaldiMac macrumors 604

    BaldiMac

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    #6
    Why do Android phones have to be compared by OS? Why can't they be compared by manufacturer or handset models? Like we do in practically every other market. Whether or not a comparison is meaningless depends on the meaning that is attempted to be conveyed.
     
  7. Jagardn macrumors 6502a

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    #7
    But Apple stock will more than likely outperform Microsoft. :D
     
  8. Rodimus Prime macrumors G4

    Rodimus Prime

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    #8
    1) People tend to choose the phone based on the OS first.

    2) the article compared it based on OS but tried to divided it up among 6 different phones.
     
  9. *LTD* thread starter macrumors G4

    *LTD*

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    #9
    Why should this be the case? Isn't there at lease ONE Android phone out there that can compete on its own as the total package? How is it that one model of iPhone outsells each Android device? Imagine if there was only a single Android phone? Total disaster.
     
  10. BaldiMac macrumors 604

    BaldiMac

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    #10
    Seems to me, most people choose carrier first, but whatever.

    How does that change the fact that "his checks indicated the iPhone 4 was the #1 selling smartphone during June"? That's just as meaningful as Android smartphones outselling iPhones in June.
     
  11. KingCrimson macrumors 65816

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    #11
    Also don't forget that all Android phones are cheap junk. Poor displays, poor battery life, malware-infested. I can't wait to get my WP7!
     
  12. Rodimus Prime macrumors G4

    Rodimus Prime

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    #12
    Because unlike the iPhone Android users do not have to make as many compromises to get the phone they want.
    Go look at our message board of different screen sizes people want for example.

    Or how many people want SAMLOD compared to LCD.
    On Android you have choices.
    Want a 4.5 in screen sure no problem
    4.5 in way to big well there is 4 in and some 3in ones out there.
    Want a built in game controller well we got that.
    Want a hardware keyboard well there is a Android phone for that.

    Not everyone wants to be limited to only what choices Apple provides. For iOS you have to settle more on the phones hardware design.
    People are very different. I can point to an example of Infuse vs Atrix. I know plenty of people wanted the infused for the larger screen SAMLOD . Other went with the atrix because it was a smaller 4in. Hell I choose the Atrix because it was 4in. A nice sweet spot for me.

    Just point out there are choices so you do not have to settle on things hardware wise you do not like.

    If there was a single Android phone it sells would be really high and willing to bet competting head to head with the iPhone.
     
  13. KingCrimson macrumors 65816

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    #13
    Yet despite the "lack of choices" iPhones dominate the industry completely and totally. People know that the iPhone "Just works" and isn't malware-infested junk like Android.
     
  14. Rodimus Prime macrumors G4

    Rodimus Prime

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    #14
    The malware-infested Android is FUD. Relatively few Android phones ever get infected with Malware.

    Also the "lack of choice" has nothing to do with how well it is doing.
    All the "lack of choice" means is people have to settle more to get iOS. People like iOS there is no denying that but if there was some real choice at the same price point you would see sales of a individual model drop. Total sells would increase yes but they would not double.
     
  15. BaldiMac macrumors 604

    BaldiMac

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    #15
    So, you want to have your cake and eat it, too! Android's biggest feature is the wide variety of options. But you think if you eliminated those options, it would be just as big as the iPhone. I'm not following this logic.
     
  16. Rodimus Prime macrumors G4

    Rodimus Prime

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    #16
    You still have option. A huge number of option are in the OS itself.
    Do not like the stock SMS get another one
    Same for email client, browser, launch ect. There are option there.
    That is a huge selling point is option in the OS. I was just point out people have option in the hardware as well.
     
  17. BaldiMac macrumors 604

    BaldiMac

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    #17
    Where do you think those options came from? I'm thinking the support of multiple manufacturers had a bit to do with Android's success. With only a single manufacturer, I doubt it gains a significant enough foothold in the industry to even have those option developed.

    And you are kidding yourself if you think the ability to customize the OS is a significant advantage of Android over iOS among consumers. Android's "open" has only ever been about manufacturers, carriers, and tech geeks.
     
  18. LethalWolfe macrumors G3

    LethalWolfe

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    #18
    Kinda funny thing to say since Mac market share is usually compared to Windows market share and not the market share of individual computer manufacturers. I mean, the 'great battle' is Apple vs MS, not Apple vs Dell, Gateway, HP, Sony, Acer, etc.,.


    Lethal
     
  19. KingCrimson macrumors 65816

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    #19
    No the "Great battle" is Apple vs WinTelDellHPSonyAcer. Yup Apple is soon going to be rid of Intel processors.
     
  20. BaldiMac macrumors 604

    BaldiMac

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    #20
    Not really "kinda funny" unless you misinterpret what I said. I don't have a problem with either comparison. Apple vs Dell. Apple vs Microsoft. Apple vs Android. Apple vs HTC. All valid comparisons. Rodimus was the one trying to limit comparisons.
     
  21. Rodimus Prime macrumors G4

    Rodimus Prime

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    #21
    Valid yes but the article did not compare them that way. It tried to spin it that it was iOS vs Android and tried to make it look iPhone is outselling all of Android. It just has to be understood when you go iPhone vs *Blank* Android phone is that the Android phone market is forced to be shared by quite a few other high end phones. In Android case you have over 6 high end phone dividing up the market.
     
  22. Stella, Jul 8, 2011
    Last edited by a moderator: Jul 9, 2011

    Stella macrumors 604

    Stella

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  23. ChazUK macrumors 603

    ChazUK

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    #23
    Poor displays? Doesn't Samsung use the same SAMOLED screens on their Galaxy S phones alongside their WP7 counterparts? Even my cheap ZTE Blade has a stunning AMOLED display. What phones specifically have poor displays?

    The advantage to putting these displays on Android hansdets is that they actually shift more than a few units, look at the SGS II for instance. I guess it'll be a long time until Samsung matches sales of the SGS II with any WP7 hardware.

    Battery life and malware doesn't seem to be an issue for me either.

    Perhaps Mango will propel WP7 into a credible compeitior. Everyone seems to be saying Mango is the answer to WP7's poor reception.
     
  24. *LTD*, Jul 9, 2011
    Last edited: Jul 9, 2011

    *LTD* thread starter macrumors G4

    *LTD*

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    #24
    The answer to WP7's poor reception is a time machine and a pink slip to the CEO.
     
  25. rdowns, Jul 9, 2011
    Last edited by a moderator: Jul 9, 2011

    rdowns macrumors Penryn

    rdowns

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    #25

    Really? I thought the problem was posts like yours. Get off the guy's case. If you don't like his threads, don't read them.
     

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