Apple Takes 104% of All Smartphone Profits Following Galaxy Note 7 Recall

[Omega Mac]

He probably meant "meaningful" competition. I think it says a lot when you have to sell your product below cost just to clear inventory. In what bizarro world is it considered a viable business practice to ship at a loss just to achieve volume?

Clearly they can't compete with Apple on anything other than price points of the device and therefore go all in thinking they will win all the while Apple continues to make a profit at their continued expense. It's not a strategy to success, to subsidise your competitions profit by forsaking your own. Steve wouldn't have let that happen ...

It pays to be be positioned either high-end-volume or low-cost-volume, the middle is much tougher to compete in because you are fighting to fronts, the high-end and the low cost.

Apple is really only pitched against itself, it's the only true path.

 

[CEmajr]

And here is the only metric that matters from a business standpoint. Samsung consistently sells more phones but most have little to no margins. The other vendors break even or lose money to create the ever so massive Android market share.

Apple is totally dominating the industry.

 

[Duane Martin]

I call BOGUS. Yet another Rah-Rah-Rah BS article.

Sorry, but a single company earning 104% of profits in a product category is news, regardless of the company.

A win due to someone else's misfortune.

Being struck by lightning is a misfortune. Rushing a product to market without sufficient testing and having a serious technical fault force a mass recall is bad management.

Or to paraphrase Mel Brooks: me cutting my finger is a tragedy; Sumsung having to recall its premium phone because the batteries explode is comedy.

 

[applezulu]

how? when its best competitor has been completely recalled? wait until the pixel catches up in marketing. i own a 7Plus so ive obviously given to its success, but its not an accurate picture of what could of been an what will be accounted to cooks decisions

You are correct that something like the Samsung recall can create a significant swing in the short-term numbers, but you can't just say it doesn't count. Thus far, Tim Cook's decisions include not rushing a phone to market that will self-destruct with enough frequency to warrant a full recall and deep-sixing of the entire model. Apple and Samsung have very different business models and approaches to bringing things to market. Cook's decisions to maintain Apple's more careful and deliberative approach is absolutely a causative factor in these share-of-market-profit numbers.

 

[NufSaid]

I don't have any numbers to back it up, but my sense is that there are many people who prefer "cheap" over iOS, not necessarily "Android". Low-end Android devices have essentially taken the place of feature phones, and there are still plenty of people who simply want a "phone".

But yes, I agree with you that this particular bump was probably due to external circumstances and is most likely temporary.

I think cheap is driving the incentive. I consider myself extremely advanced when it comes to technology but every time I hold any android phone to help people out I don't find it a very enjoyable experience.

I also don't like carriers telling me when and when I cannot upgrade to the next android OS.

 

[myscrnnm]

And Samsung is apparently recalling 2.8 million washing machines: http://www.cnbc.com/2016/11/04/sams...ng-machines-over-risk-of-impact-injuries.html

Apple should enter the washing machine market; I'll bet they'll be able to sell lots and lots of dongles for washing machines! Could even get 104% of the washing machine market ....no matter though that it ends in 100% After all, everything Apple does is "magic"! Especially not including an lightning to usb-c adapter with their new and highly overpriced MacBook Pro's!!!

The 104% does not refer to market share, but to profits. If someone else has negative profit, the percentage can go over 100.

 

[Moorepheus]

And yet despite those high asking prices, tons of people still buy the iPhone. Nobody twisted their arms into getting one. Clearly there is value in an iPhone despite its high price tag, or perhaps, precisely because of it.

Apple's profits is what happens when a company focuses on making the best product possible, then focuses on getting them into the hands of as many people as possible.

Users ARE speaking with their wallets, they are saying they prefer Apple's products and are willing to pay for them. You are free to decide otherwise, but just because Apple doesn't do what YOU or some other people on these forums do, doesn't mean they are wrong, it means they have different priorities than pleasing you. If you don't like it, spend your money elsewhere, thats your choice.

I would be interested in seeing the $ numbers (which will never happen). That is, how much money Apple store made on just phones sold at their stores, and then now much they made from carrier sales. And those sold at the carriers, how much did those carriers give back to the buyer for a trade in, move to that carrier, etc? I traded in my 6s+ 128GB for the 7s+ 256GB. AT&T gave me $650 for my trade in. Yes, Apple still sees 100% of their revenue from AT&T, but I surely didn't pay 100% for it. And this is not just happening at AT&T, it's happening at all the carriers. If it was not for what AT&T gave me, there is no way I was upgrading this year, for the price alone, not to mention the missing headphone jack, which I truly miss, and to tell the truth, not that all impress with the camera (was never impressed with the camera on the 6s either, but that's a different story).

I know a lot here want to believe people buy the iPhone because it's made by Apple and it's the best thing since sliced bread. And don't get me wrong, the iPhone is an awesome device. But I want to say, and this is my opinion only, that most people who upgrade from an old iPhone to a new iPhone do so for the following reasons. 1. They are stuck in the APPLE ECO system, that is, it would cost a lot to move from iOS to Android or any other OS type. 2. When carrier subsides of up to $650, most people are getting a new iPhone for FREE. I know the argument is that Android phones are doing the same thing at the carriers, but look at reason 1. Again, this is just my opinion and have no tangible facts to back this up.

 

[MasterControl]

The whole Apple ecosystem is built on maintaining high profit margins because this is a fight, a fight for survival that Apple almost lost back in '97, and Wall Street investors love high profit margins! They can't resist pouring money into companies that can maintain high profit margins year after year. The Android ecosystem, while quite successful at market share dominance, has tiny profit margins and this will result in pain, the kind of pain that can even bankrupt companies or cause them to stop making handsets, i.e., RIMM and Nokia. I'm not referring to Google, but the other handset makers.

 

[wigby]

And Samsung is apparently recalling 2.8 million washing machines: http://www.cnbc.com/2016/11/04/sams...ng-machines-over-risk-of-impact-injuries.html

Apple should enter the washing machine market; I'll bet they'll be able to sell lots and lots of dongles for washing machines! Could even get 104% of the washing machine market ....no matter though that it ends in 100% After all, everything Apple does is "magic"! Especially not including an lightning to usb-c adapter with their new and highly overpriced MacBook Pro's!!!

Why even bring that up here? They just announced that new Macbook Pros are selling faster than all previous models so you are yelling into the wind.

 

[BlargKing]

I wouldn't count that against him. Every family has someone who makes choices the rest of the family knows is not the best, but you still gotta love em.

My whole family is on Android now. He was the last iPhone user and he came to me to help him choose an Android phone after his 6 got touch disease.

 

[wigby]

I would be interested in seeing the $ numbers (which will never happen). That is, how much money Apple store made on just phones sold at their stores, and then now much they made from carrier sales. And those sold at the carriers, how much did those carriers give back to the buyer for a trade in, move to that carrier, etc? I traded in my 6s+ 128GB for the 7s+ 256GB. AT&T gave me $650 for my trade in. Yes, Apple still sees 100% of their revenue from AT&T, but I surely didn't pay 100% for it. And this is not just happening at AT&T, it's happening at all the carriers. If it was not for what AT&T gave me, there is no way I was upgrading this year, for the price alone, not to mention the missing headphone jack, which I truly miss, and to tell the truth, not that all impress with the camera (was never impressed with the camera on the 6s either, but that's a different story).

I know a lot here want to believe people buy the iPhone because it's made by Apple and it's the best thing since sliced bread. And don't get me wrong, the iPhone is an awesome device. But I want to say, and this is my opinion only, that most people who upgrade from an old iPhone to a new iPhone do so for the following reasons. 1. They are stuck in the APPLE ECO system, that is, it would cost a lot to move from iOS to Android or any other OS type. 2. When carrier subsides of up to $650, most people are getting a new iPhone for FREE. I know the argument is that Android phones are doing the same thing at the carriers, but look at reason 1. Again, this is just my opinion and have no tangible facts to back this up.

You use the word "stuck" in the Apple ecosystem but maybe it's just laziness or preference. The point is that Apple has built much more than good phone. They've built this ecosystem that people are comfortable with. If people were really forced or stuck in Apple's ecosystem it would be illegal and they would face class action lawsuits and anti-trade fines. You and I can leave for Android and or any other ecosystem at anytime. For better or worse, we are comfortable in iOS so we do not leave at a rate as fast as other leave Android to go to iOS. That fact speaks to the incredible sales and profit of iPhone much more than a good quarter for Apple or a bad quarter for Samsung.

 

[jscooper22]

You can change BY more than 100% but I'd really like to see the spreadsheet that shows anything accounting FOR more than 100%.

 

[centauratlas]

And Samsung is apparently recalling 2.8 million washing machines: http://www.cnbc.com/2016/11/04/sams...ng-machines-over-risk-of-impact-injuries.html

Apple should enter the washing machine market; I'll bet they'll be able to sell lots and lots of dongles for washing machines! Could even get 104% of the washing machine market ....no matter though that it ends in 100% After all, everything Apple does is "magic"! Especially not including an lightning to usb-c adapter with their new and highly overpriced MacBook Pro's!!!

It would free up a lot of space in the laundry room to have a washer and dryer that are 0.478 inches thick.

Bold, courage

 

[Shlooky]

My whole family is on Android now. He was the last iPhone user and he came to me to help him choose an Android phone after his 6 got touch disease.

Lord tundering Jesus by!!

 

[iosuser]

Maths was never my strong point.

Could somebody explain this in simple terms? How it's calculated?

I"m far from being a math nerd, but when I saw the headline 104%, I thought it meant that Apple made money while everyone else lost money. I didn't read the whole article, but I'm guessing the combined losses of others equaled to 4% of Apple's profit? Guessing they lumped it into Apple's profit, 104%, to make a point.

 

[indychris]

And 1000% of adaptor profit

LOL. Who would have ever figured that "Courageous Adapter Innovation" could be a business plan?!

 

[Moorepheus]

You use the word "stuck" in the Apple ecosystem but maybe it's just laziness or preference. The point is that Apple has built much more than good phone. They've built this ecosystem that people are comfortable with. If people were really forced or stuck in Apple's ecosystem it would be illegal and they would face class action lawsuits and anti-trade fines. You and I can leave for Android and or any other ecosystem at anytime. For better or worse, we are comfortable in iOS so we do not leave at a rate as fast as other leave Android to go to iOS. That fact speaks to the incredible sales and profit of iPhone much more than a good quarter for Apple or a bad quarter for Samsung.

When I mean stuck, I mean what I posted as my first reason why people don't switch. For me, after 9 years using Apple's eco system, won't change not because of how easy it is to use or how great you might think it is, but because of all the money invested into it, that would have to be re-invested into a new OS Eco system. It really has nothing to do with laziness or preference or comfort. It's really all about the DOLLAR in my pocket, I mean Apples SAFE.

As for your comment on that people are leaving Android to go to iOS is just totally false. In fact, iOS saw a loss in market share this year while Android saw a gain. Just because Apple is making more money than Android doesn't mean that people are leaving the Android market like you make it out to be.

 

[MasterControl]

I have an iPhone 7 Plus. I bought a pair of Beats Solo3 wireless headphones. Now, when I see folks with wired earpods (earbuds) or wired headphones I think of them as living in a quickly ending era that we'll have to explain to kids in a few years. What are those wires, Daddy? Oh, headphones used to be wired to your iPhone! I know! Unbelievable! Ha!

 

[TallManNY]

That's exactly my point. Again, I don't have any numbers to back it up, but I suspect that there is always going to be a lot more interest in a $30 device than a $300 device.

But also, with Android phones being that cheap, I'm not sure there is room in the market to grow adoption of phones priced like the Google Pixel and the S

Hi
The iPhone 10th anniversary has got to be special for me. I so hope it is.
I've been loyal for nine years and would really miss iOS and my apple watch.
The Pixel you mention and no doubt the Galaxy S8 in February 2017 give a compelling case for android.
But good things come to those that wait!

I hope the 10th works for you. Whatever they release will be a huge upgrade from your 6 no matter what. Really the 7 is already a big upgrade from what you have (Force Touch and optical camera stabilizer are both real world very nice upgrades and they are already in the 7). But dropping another $749 for a phone when you already have a good one is an understandable thing to pass on. Right now I'm leaning on riding my 6S for another year. But I'm getting next year's phone no matter what.

 

[MasterControl]

When I mean stuck, I mean what I posted as my first reason why people don't switch. For me, after 9 years using Apple's eco system, won't change not because of how easy it is to use or how great you might think it is, but because of all the money invested into it, that would have to be re-invested into a new OS Eco system. It really has nothing to do with laziness or preference or comfort. It's really all about the DOLLAR in my pocket, I mean Apples SAFE.

As for your comment on that people are leaving Android to go to iOS is just totally false. In fact, iOS saw a loss in market share this year while Android saw a gain. Just because Apple is making more money than Android doesn't mean that people are leaving the Android market like you make it out to be.

Android has been gaining market share for years. This is not a new trend. I like the analogy of buying or leasing a Mercedes Benz. It will never be the global market share leader. That honor belongs to the Toyota Corolla. But, the Mercedes Benz is the premium car in the world and has a very high profit margin. Some folks aspire to own a Benz but are forced into a Corolla. Some folks prefer a Corolla over even a Mercedes Benz!

 

[Rafterman]

All your profit are belong to us.

 

[DVNIEL]

It's all good since Apple is about to lose at least 50% of the notebook market....

#burn

 

[BlargKing]

Lord tundering Jesus by!!

Theres literally no reason for any of us to get an iPhone.

 

[thekeyring]

It’s telling when Apple fanboys--myself included--begin to resent the Apple Tax that accounts for Apple's enormous profits. When something begins to feel expensive, perhaps that something isn’t so special anymore.

With the iPhone - there phones are about as expensive as Samsung's flagship phones. Those are the two companies making profit. Maybe it's that the competition - in this category - is undercharging, not that Apple are over charging.

Apple also has to develop and maintain iOS, where as Samsung get's Android for free.

 

[truthertech]

My whole family is on Android now. He was the last iPhone user and he came to me to help him choose an Android phone after his 6 got touch disease.

I hope you steered him away from the Note 7. That could be very dangerous for him and the rest of your family, and would prevent him from flying on any airplanes with it. I hope you also prepared him for the loss of privacy since every one of his emails, with his most intimate thoughts, sent and received will be scanned and saved by Google, every search he makes will be recorded forever, every movie he watches and every post he makes on any topic will be recorded forever, every place he drives and every document he creates, everything heard by Google Assistant, every photo he takes of his family, etc., all will be saved in a dossier on him and owned by Google, and available to the government, hackers and advertisers.

 

[brsboarder]

woooohooo, they can continue to make crappy products and still make money.