How Completely Apple Has Humiliated The Cellphone Industry

[JustinSaneV2]

You Can't Appreciate How Completely Apple Has Humiliated The Cellphone Industry Until You See These Charts

Yes, we know you know that in the space of three short years Apple's iPhone has humiliated the entire cellphone industry.

But we bet you won't FULLY APPRECIATE just how completely Apple has laid waste to incumbents like RIM, Nokia, and Sony Ericsson until you look at these two charts from Goldman Sachs (via FT).

First, a chart comparing the total handset industry profits since 2005 captured by:

1) Apple (light blue), and
2) Everyone else (RIM, Nokia, HTC, Sony Ericsson, etc.)

That's just astounding. The folks at Nokia, RIM, etc., should hang their heads in shame.
And now consider the next shocking chart. Apple will generate 2X as much handset profit as the rest of the industry combined this year DESPITE SELLING ONLY 3% OF THE HANDSETS BY UNIT VOLUME:

And now, when you finish chewing on that, consider that Apple's iPad might have the same impact on the PC industry.

http://www.businessinsider.com/you-...et-industry-until-you-see-these-charts-2010-7

 

[dejo]

From Daring Fireball:

Actually, it doesn’t appear to be the entire industry — just RIM, Motorola, Nokia, HTC, and Sony Ericsson. So the list doesn’t include Samsung and LG.

 

[Tarzanman]

Or Pantech or kyocera

 

[diabolic]

But even with just RIM, Motorola, Nokia, HTC, and Sony Ericsson, it's still ridiculous.

 

[MozMan68]

Not so ridiculous when you consider my company has to pay $300 to get an iphone for me but only $80 if I wanted the latest blackberry....

 

[diabolic]

Not so ridiculous when you consider my company has to pay $300 to get an iphone for me but only $80 if I wanted the latest blackberry....

And yet, people are buying the iPhones as fast as Apple can make them right now. If they were truly overpriced, sales would suffer. That's obviously not the case.

 

[MozMan68]

And yet, people are buying the iPhones as fast as Apple can make them right now. If they were truly overpriced, sales would suffer. That's obviously not the case.

I wasn't commenting on the popularity, I was commenting on the associated profit margin....RIM may need to sell 5 phones to equal the profit Apple gets for one. I'm not saying that's wrong....

 

[samcraig]

And in the process they've humiliated themselves with the iPhone4 release and their press conference. LOL

Kidding

Mostly.

 

[Rodimus Prime]

More so it should show you how badly Apple rips off their customers.

Also Apple is forcing their carriers to foot the bill on bigger discounts for the phones.

I am waiting for the Others to start demanding the carriers to eat the $400 discount that the iPhone is getting compared to their $300 for other phones.

 

[bigjnyc]

Imagine they were whoring themselves out to every US carrier like droid.

And in the process they've humiliated themselves with the iPhone4 release and their press conference. LOL

Kidding

Mostly.

ironically that's been their best selling iphone yet.... in fact hasn't it been their best selling product launch? someone correct me if I'm wrong.
amazing right? Any other company with so much bad PR around a product launch would have suffered in sales.

 

[Fliesen]

actually those 2 charts display the following:

apple creates HUGE share of revenue with SMALL market share.

that just means, apple's products are WAY more expensive than other phones.

don't get me wrong, i like apple.
It's just that these 2 charts actually serve as proof to the theory that apple phones are quite overpriced.

 

[jp700p]

Its the web stupid.

What was the best web browsing phone before the iPhone? Name a mass produced phone that had a full web browsing experience that was not a pain and slow?

You know what i'm all talking about. All of you remembered when you first used Safari on an iPhone. You fell in love with it, simple.

 

[Eddyisgreat]

More so it should show you how badly Apple rips off their customers.

Also Apple is forcing their carriers to foot the bill on bigger discounts for the phones.

I am waiting for the Others to start demanding the carriers to eat the $400 discount that the iPhone is getting compared to their $300 for other phones.

uhm...Apple sells the iphone for the same price that other smart phones go for (albiet unlocked). Whether you pay $200 for it up front and pay the carrier back over time or $600 outright, the cost is still the same.

There are several reasons why Apple is able to get customers to purchase their handsets as well as an equal number of reasons that Apple is able to bring down the per unit cost to what, much less than $200/unit (minus R&D). If other manufacturers want to sell product @ $.50 superspecialdiscount on a phone that costs $.49 cents to make, that's their issue.

Not having to focus on 30 different phone models and distribution to every cell phone store on the block is part of those reasons.

 

[Vihzel]

One word: marketing

 

[JustinSaneV2]

More so it should show you how badly Apple rips off their customers.

Also Apple is forcing their carriers to foot the bill on bigger discounts for the phones.

I am waiting for the Others to start demanding the carriers to eat the $400 discount that the iPhone is getting compared to their $300 for other phones.

Because it's not like the carriers are more than capable of stomaching the bill without there being a huge dent in their overall profits or anything.

 

[Pressure]

actually those 2 charts display the following:

apple creates HUGE share of revenue with SMALL market share.

that just means, apple's products are WAY more expensive than other phones.

don't get me wrong, i like apple.
It's just that these 2 charts actually serve as proof to the theory that apple phones are quite overpriced.

Or that the average iPhone user uses vastly more money than other phone users.

App store and initial price.

 

[mlts22]

Its the web stupid.

What was the best web browsing phone before the iPhone? Name a mass produced phone that had a full web browsing experience that was not a pain and slow?

You know what i'm all talking about. All of you remembered when you first used Safari on an iPhone. You fell in love with it, simple.

+1

I have used Pocket Internet Explorer and Opera Mini/Mobile for years. It got the job done, but was "meh" at best. Then moved to Google's browser and Dolphin on Android. Decent.

Safari on the iPhone is worlds apart when it comes to usability. Part of it is because it is a well polished browser. I'm sure another part of it is because websites make sure their pages render well with the mobile device. Either way, it doesn't make browsing tolerable on the device, but actually quite usable.

 

[randomerratum]

The iPhone is the only smart phone that you know exactly how to use after watching a 30 second commercial... no other smartphone is that approachable (certainly not in 2007) Apple has schooled the industry on making advanced functionality easy and accessible to anyone... the iPhone is EASIER to use then most "dumb phones" - forging an entirely new market of general uses that have been completely ignored to this point.

The iPhone's success is largely due to *new* smartphone buyers, rather then seasoned smartphone users. Apple is the only tech company to approach their products from a user standpoint rather then a developer standpoint, which makes them the best at what they do.... and people are really starting to understand that.

Yes, IMO the entire consumer electronics industry should be embarrassed... if they're not now, they will be.

 

[Carniphage]

One word: marketing

But Apple spend *less* on marketing. As a proportion of revenue they spend about a half what Microsoft spends.

C.

 

[WiiDSmoker]

I believe this is actually including iPod Touch and iPad revenue as well, so it's quite flawed.

 

[Carniphage]

I believe this is actually including iPod Touch and iPad revenue as well, so it's quite flawed.

I am not sure if that is the case. It was possible to extract iPhone revenue from the non-iPhone revenue because of the different accounting practices Apple uses for the iPhone and the AppleTV.

C.

 

[apprunner]

Its iPhone only. iPod touch are embedded in the iPod P&L and isn't broken out. iPhone is much more transparent in analyst reports and Apples earnings reports.

 

[Sun Baked]

If Apple follows the same path in the smartphone market as they did with the iPods.

Expect the current high end phone situation to last until they get a majority of the market, then they will crush everyone else by adding in an old fasioned iPhone Classic, and then a midrange iPhone Nano, and then a standard low end iPhone Shuffle.

 

[WiiDSmoker]

If Apple follows the same path in the smartphone market as they did with the iPods.

Expect the current high end phone situation to last until they get a majority of the market, then they will crush everyone else by adding in an old fasioned iPhone Classic, and then a midrange iPhone Nano, and then a standard low end iPhone Shuffle.

They in a sense already do this with iPhone 3G & iPhone 3GS

 

[SpaceKitty]

They in a sense already do this with iPhone 3G & iPhone 3GS

The 3G is no longer for sale. It was replaced by the 8GB black 3GS.