iPhone Generated Record-Breaking Share of Profits Last Quarter Despite Continued Sales Decline

[keysofanxiety]

Sounds to me like their profit margins increased more than their sales decreased.

It's going on industry profit share. Articles like this demonstrate just unprofitable the phone business is, much like TVs. Somehow Apple keep making hand over fist profits whilst having some of the best build quality, aftersales support, ecosystem, and hardware performance.

The Note 7 hiccup certainly may have skewed the numbers in this instance, but it's worth remembering that Apple have consistently taken high 90%—upwards of industry profit since Q4 2014.

Have no doubt: Cook is a logistics genius.

 

[AZ63]

Well, our family helped. We bought three 6s phones since the release of the 7. Not that we couldn't have picked the 7 but no headphone jack, no money from my family.
Since the 6s is older, parts are cheaper and profits are higher. Why else could they drop the price $100 and still rake it in.

 

[iSayuSay]

amazon and third parties with all-in-one dongles (eliminating the dongle issue so many people here like to pretend is the end of the world) would beg to differ...

Right, yet many people would still buy the Apple ones, just because Apple tells us 3rd party dongles suck and uncertified. That would scare the average soccer moms and dads.

 

[Will.O.Bie]

These numbers will only make them lazy and complacent and pass off old tech and design (including gimmicks) as "innovations" as long as people keep buying their products. I personally have skipped 6s and 7 due to the lack of innovation and grandeur. I'm very happy with my 6+ so far and still waiting for the wow factor on their next phone. There's clearly no rival to them besides Samsung, and they're not even in that picture.

 

[v0lume4]

Apple took Samsung profit. Expect Google to take back some of it with the Pixel.

If you could find the dang phones

 

[tubeexperience]

Apple must be making a lot of money from charging customers to replace their defective iPhones.

 

[jm001]

If you could find the dang phones

Just go to New Hampshire. I hear they have plenty.

 

[citysnaps]

Yup, not surprised. And not surprised with all the juvenile snark and hate, either. Par for the course here.

Apple manufactures a lot of what people want, people who are willing to open their wallet and purchase.

Though it will taper off past Christmas, Apple currently manufactures, sells, and delivers roughly 800,000 iPhones every day. Compare that to the meager 2.5 million Samsung Note 7 phones delivered in the first two weeks since their launch, before the fires and recall started.

The math is pretty straightforward...

 

[DEMinSoCAL]

But I thought Tim Cook was doomed as Apple CEO? Seems like he might be doing an ok job after all.

If you mean he is able to spin horrible sales figures to look like they are stellar, then yes, he's your man.

If you mean that the court of public opinion ranks him high, then (as can be seen by practically any threads on this forum), he sucks.

His bad choices WILL catch up one day, when people tire of watches and gadgets and enough have left the Apple-sphere and then what is left? The Chinese won't work for pennies forever (which is the only reason Apple makes so much profit). If Trump has anything to say about it, products will be made in USA and cost 2x as much so that Apple can still have rape-like profits. Then sales will tank and bye, bye Apple.

Apple is a house of cards.

 

[v0lume4]

Just go to New Hampshire. I hear they have plenty.

Had to Google "google pixel new hampshire" to understand what you were talking about. Now I get it. Darn right, I bet they have plenty up there!

I saw those headlines a few days ago but never actually read into them until now. Wow!

 

[DEMinSoCAL]

Yup, not surprised. And not surprised with all the juvenile snark and hate, either. Par for the course here.

Apple manufactures a lot of what people want, people who are willing to open their wallet and purchase.

Though it will taper off past Christmas, Apple currently manufactures, sells, and delivers roughly 800,000 iPhones every day. Compare that to the meager 2.5 million Samsung Note 7 phones delivered in the first two weeks since their launch, before the fires and recall started.

The math is pretty straightforward...

While the math is straightforward, the business plan isn't. Samsung has diversified itself into many industries and product lines. Apple does it's best to get rid of everything people want except iPhones. They are a one-trick pony. One day, that pony will die.

 

[trifid]

7) This profit-first mentality has worked for Apple for decades, as it has for every other company ever...

Completely wrong, when Apple focused on profits-first and vision/innovation second, they got obscenely greedy and nearly killed Apple in the 90s. Blackberry focused on profits, rested on laurels and forgot to innovate, move forward, and died. Vision/innovation has to be first, then profits will follow. Steve Jobs described the demise of Apple in the 90s:

“they cared about making a lot of money… they got very greedy and instead of following the original trajectory of the original vision which was to make this thing an appliance and get this out there to as many people as possible, they went for profits, and they made outlandish profits for about 4 years, one of the most profitable companies in america for 4 years, and what that cost them was their future, because what they should have been doing was making rational profits…”

See minute 39

Steve then came back at the end of the 90s and saved Apple by innovating with iMac, digital hub, changing the world with iPod, then profits followed.

 

[monstruo]

With Samsung's exploding phones, Apple better be doing well..!

 

[macduke]

Apple really has found the holy grail of the entire tech industry and found a sustainable business model of not having to be anywhere near the market leader and take all the money. It's astounding if you just think about how difficult that is and how no other company has done that. It makes sense that they would position themselves more as a luxury brand. I don't really care for it but I think that they should stay reasonably luxurious.

I'm willing to pay a reasonable amount above average for great design and reliability that integrates with a good ecosystem of products and services. Their quality in hardware started to slip for a few years though but from what I can tell it's getting a little better. The software bugs have definitely gone down as well despite lingering issues. They really need to work on improving their services and making the iPad and MacBook Pro a better tool for professionals along with updating their other Macs. They need to stop neglecting the ecosystem of products that makes Apple great like their Thunderbolt Display or AirPort that can be easily controlled from a Mac or iOS device.

The creative industry has always been the backbone of Apple and what pushes it forward. Today I think that industry also extends to apps. We need great tools to build all these things. We need powerful Macs as well as iPad Pros with advanced iOS software so we can more seamlessly integrate our devices across projects. Then we can maximize productivity and utilize the device for the part of the project that it can handle best.

 

[groovyd]

While the math is straightforward, the business plan isn't. Samsung has diversified itself into many industries and product lines. Apple does it's best to get rid of everything people want except iPhones. They are a one-trick pony. One day, that pony will die.

Diversity deploys mediocrity.

 

[OldSchoolMacGuy]

Another MacRumors post and nothing but hateful comments.

Honest question, if all the folks here do these days is complain about Apple, why bother wasting your time? Is there really nothing better to do with your time than read articles here and spend it complaining about something complaints will do absolutely nothing to change?

 

[Labeno]

And this is why Apple has no incentive to innovate or even marginally maintain their computers.
I miss the old Apple.

 

[luciferuk]

...slowly slowly, catchy monkey

iPhone sales may have declined for three consecutive quarters, but the latest data from research firm Strategy Analytics suggests Apple is unsurprisingly still doing exceptionally well in the smartphone market.

Apple captured a record 91% of profits in the worldwide smartphone market in the third quarter, or $8.5 billion of the overall $9 billion in profits recorded by all vendors combined, according to Strategy Analytics.

Apple's biggest competitor Samsung was nowhere to be found on the list, as Chinese smartphone makers Huawei, Vivo, and OPPO took the second, third, and fourth spots respectively with between 2.2% and 2.4% of profits.Apple's profit margin is impressive given no other smartphone maker generated more than $200 million in profits during the quarter, according to Strategy Analytics. Apple's share of profits was some 40× larger than its closest competitor.

iPhone sales declined on a year-over-year basis in the second, third, and fourth quarters of the 2016 fiscal year, after rising only marginally during the first quarter, which makes Apple's record-breaking smartphone profits even more impressive.

BMO Capital Markets analyst Tim Long previously estimated Apple captured 103.6% of smartphone industry profits in the third quarter. The reason for the discrepancy between the datasets remains unclear.

Article Link: iPhone Generated Record-Breaking Profits Last Quarter Despite Continued Sales Decline

 

[Count Blah]

Another MacRumors post and nothing but hateful comments.

Honest question, if all the folks here do these days is complain about Apple, why bother wasting your time? Is there really nothing better to do with your time than read articles here and spend it complaining about something complaints will do absolutely nothing to change?

People are passionate about what they like/love, and VERY vocal when they "think" the thing they like/love is going off the rails.

What is so hard for you to understand?

Do you go to an airport and yell at the planes to slow down? That would be just as effective as getting passionate people to be quiet in here.

 

[MellowFuzz]

When your customers are dumb enough to pay for the repair of a product design flaw, record profits are a testament to their stupidity.

 

[lincolntran]

Apple really is rudderless these days. Blowing billions of dollars on hair brained driverless car projects, acquiring headphone companies, selling ridiculous gaudy $20K watches....

I love Apple, I have owned every iPhone ever made, but it's sad to watch them try to turn in to a fashion/accessory brand and completely losing focus on what they do best. It's absolutely disgusting that they only JUST this year increased the base model iPhone from 16GB to 32GB. They should have done that years ago. It just goes to show that Apple cares more about profits than anything else, even at the expense of their long term brand.

The future of tech is AI. Apple should be starting gigantic research initiatives in the field of AI instead of wasting time with gimmicky watches and car projects. Apple has done an excellent job on making a truly impressive CPU/GPU for the iPhone (the A10 is amazing), and I wish they would focus more on the raw tech rather than trying to make their phones & laptops even more thinner and prettier.

I bet you real money that they're very actively working on AI in all kinds of aspects. Just because they're not loud mouth like google and other companies, doesn't mean they're not working on it.

 

[Bryan Bowler]

This is not a surprise with Timmy in charge. Admittedly though, it doesn't bother me though because I own a large number of shares in Apple.

 

[jkmags]

I just watched a good portion of the Jobs interview above, it made me think of the old saying by Mark Twain (possibly Mark Twain),. "History doesn't repeat itself but it often rhymes". Jobs even compared Apple to that of Sony,...

I still have high hopes for Apple.

 

[dilbert99]

7) This profit-first mentality has worked for Apple for decades, as it has for every other company ever...

Only since the iPhone, but history of the stock market has taught us that top companies come and go frequently.
They are already seeing a slide in sales, but compensating with higher prices which can only get them so far.

 

[BreadofWonder]

Wow All Top are Made in China

Yeah, but only one is designed in California.