iPhone X Responsible for 35% of Total Worldwide Phone Profits in Q4 2017

[Michael Scrip]

Uh... an overwhelming majority making phones (99%?) are making a profit, or else it wouldn't make sense for them to still do it. That's why the Zune was discontinued as iPod ate Microsoft's lunch 12-something years ago. Companies like Huawei are like Walmart. They make plenty of money selling to the masses of China at a lower price point. Doesn't mean they aren't bad at how they do it; just different.

Graph source:
http://www.patentlyapple.com/.a/6a0120a5580826970c01bb098fbc63970d-pi

And yet... I just Googled dozens of articles with the following premise:

Apple and Samsung make the lion's share of smartphone profits... with a few of the larger Chinese OEMs making a little profit.

What about the other 590 Android OEMs?

Here's a fun headline:

LG continues to lose money selling smartphones

And they're #6 on your chart.

NOTE: your chart is for market share... which is for units.

Find a chart for OEM profit and it will be a VASTLY different chart.

Sorry... I'm not seeing any evidence of 99% of Android OEMs being profitable.

The common narrative is the exact opposite of that.

 

[PickUrPoison]

So in that scenario Apple is pulling an extra $56 from consumers for each phone, which is exactly what I'm pointing out. That comes out to more than the cost of a Apple leather case.
<snip>

Agreed. So all your hyperbolic statements about iPhone X selling price—“greedy”, “absurd”, “crazy price level”, “massive markup” etc.—are unfounded and flat out wrong.

 

[69650]

Good for Apple shareholders, bad for Apple customers.

 

[pika2000]

That's just the X. Add the 8 and 7, and no wonder everybody hates Apple but wants to be like Apple.

I have no problem with Apple and their margins, but I wish they push the iPhone Upgrade Program into other markets.
[doublepost=1524015370][/doublepost]

Good for Apple shareholders, bad for Apple customers.

How is it bad for Apple Customers?
Without profits, do you think a business like Apple can continue to run and provide the same level of support? Support is the most costly part of the business, and that's why most other companies don't bother to support their phones, let alone giving a worldwide warranty coverage.

Try opening up a business and making slim profit, and see how long you will last.

 

[citysnaps]

No, it’s not reasonably priced. From the information presented here you can say the price is artificially inflated. They can sell it for $849 and $999 and still have a very respectable profit margin.

No this phone is not anything special. It’s just the next generation of what the iPhone will be designed like for the next 4-5 years and maybe more.

I respect Apple for keeping pricing in the upper echelon of premium devices but this profit report clearly shows that Apple’s primary motivation is to squeeze out as many dollars possible out of their users. Plain and simple.

It is reasonably priced. Perhaps not for you, but for many million others.

 

[pika2000]

Too much profit = greedy. iPhone X could have been $749.

It's not like other company's flagships are any different. Samsung is also selling their Note 8 for almost $1k.

And Apple is not just selling the X. The iPhone 8 starts at $699. The SE starts at $349.

 

[citysnaps]

Thanks for your work experience but as it’s not at Apple it can be discounted from any argument.
Also I think considering the low sales of the iPhone X, according to endless reports on this site for one of production being halved, it’s pretty clear the mark up in the X is a lot higher then 30%, I don’t need to ‘educate’ myself in anything thanks.

I think you do need to educate yourself. Your post makes that clear. Look around and see what other manufacturers' margins are. Just because you think Apple's are too high, doesn't mean they are. Maybe you have inside knowledge of Apple's and other companys' operations?

What is the correct GPM that Apple should be applying? Pick a number, and then defend it.

 

[vipergts2207]

Agreed. So all your hyperbolic statements about iPhone X selling price—“greedy”, “absurd”, “crazy price level”, “massive markup” etc.—are unfounded and flat out wrong.

Lmao it’s not unfounded nor flat out wrong, it is marked up higher than any other iPhone has been. Those numbers also assume equal sales volume...
The markup could be even higher or lower than $56.

Also, most people would say $1000 is a crazy price level for a phone. Base model price no less.

 

[Fozziebear71]

APPLE IS DOOMED!!!

 

[szw-mapple fan]

Just more proof how overpriced the iPhone X is. Massively so looking at this report. One hell of a markup.

One could argue that it was priced just right, given how many people were willing to buy and how big the margins were. By definition being overpriced means pricing yourself out of the market, which Apple is not at all doing here.

 

[Apple_Robert]

For all those bumping their keyboard gums about Apple making too much profit... Walk into your boss' office this week and tell him or her, that in your opinion, the company has made too much profit and you want to return some of your hard-earned paycheck. I won't hold my breath.

 

[scrapesleon]

this is why this year iPhones price will not drop because we overdid it again

 

[PickUrPoison]

Lmao it’s not unfounded nor flat out wrong, it is marked up higher than any other iPhone has been. Those numbers also assume equal sales volume...
The markup could be even higher or lower than $56.

Also, most people would say $1000 is a crazy price level for a phone. Base model price no less.

They were your assumptions, but if you want to backtrack now and withdraw them, no problem.

I agree with you though; I’m sure $1,000 for an iPhone X does seem crazy—to someone who thinks $56 is a “massive markup.”

 

[AppleScruff1]

For all those bumping their keyboard gums about Apple making too much profit... Walk into your boss' office this week and tell him or her, that in your opinion, the company has made too much profit and you want to return some of your hard-earned paycheck. I won't hold my breath.

Better yet, go brag to all your friends how much profit your electric company makes.

 

[vipergts2207]

They were your assumptions, but if you want to backtrack now and withdraw them, no problem.

I agree with you though; I’m sure $1,000 for an iPhone X does seem crazy—to someone who thinks $56 is a “massive markup.”

Dude, the scenario of equal sales volume originally came from you. I simply based all my numbers off of your premise...

The iPhone X makes Apple 43% more profit, even if they sell in identical quantities.

If anyone is backtracking, it seems like it’s you.

And $56 is a large increase in markup relative to the markup Apple usually does. Again, using your numbers from earlier, $56 is a 28% increase from usual Apple markup.

 

[PickUrPoison]

Dude, the scenario of equal sales volume originally came from you. I simply based all my numbers off of your premise...



If anyone is backtracking, it seems like it’s you.

And $56 is a large markup relative to the markup Apple usually does. Again, using your numbers from earlier, $56 is a 28% increase from usual Apple markup.

Yeah no. $56 isn’t a “massive” markup. It’s not a “large” markup.

It’s a very, very small amount of money to those who would buy a X.

 

[vipergts2207]

Yeah no. $56 isn’t a “massive” markup. It’s not a “large” markup.

It’s a very, very small amount of money to those who would buy a X.

A large increase in markup. If the total markup was only $56, the X would be quite a deal.

 

[Baymowe335]

This isn’t surprising if true.

Apple TOLD us the iPhone X has been the best selling phone since release, reviews have been great for people who actually OWN it, and the hardware is great.

Only Macrumors haters with no real evidence other than Nikkei Asian Review “supply checks” indicate anything but a rousing success.

Apple’s own revenue numbers, particularly iPhone revenue should tell you Apple is KILLING it and 4 digit priced phones are not only in demand, they are here to say.

Sorry, but Apple nailed it and will nail it again in 2018 with the X Plus.

 

[PickUrPoison]

A large increase in markup. If the total markup was only $56, the X would be quite a deal.

Awesome. The iPhone at $943 would be ok.

But the $56 “large increase in markup” at $999 is “greedy”, “absurd”, “crazy price level”

Sounds right to me

 

[MarkB786]

I'm still using my 7, and family's 5s, 6+, and SEs are still going strong. And I don't have to worry about malware, spyware, the lack of security updates, crappy apps, and a bad UI. I think that's a great business model!

Blah blah blah. Have you replaced your batteries yet? Lucky for you, Apple got busted before you had to upgrade to a $1,000 phone to keep things running smoothly. What do you think of that piece of their business model? Typical Apple fanny.

 

[Baymowe335]

Too much profit = greedy. iPhone X could have been $749.

LOL! This is the greatness only Macrumors can deliver.

$749 based on WHAT exactly? You really think you understand pricing better than Apple or they should charge less than the market will support?

This is a business folks, owned by the shareholders. Shareholders aren’t cool with running a charity.

Apple’s strategy is working to perfection. Absolute perfection.

Cook is doing an outstanding job. Remember, Androids are close to $1000 too.

 

[firewood]

For all those bumping their keyboard gums about Apple making too much profit... Walk into your boss' office this week and tell him or her, that in your opinion, the company has made too much profit and you want to return some of your hard-earned paycheck. I won't hold my breath.

My guess is that all those people don’t have jobs, and thus have never had an opportunity to turn down a large raise in pay, or a big bonus, or a customer willing to pay more for a rush job.

 

[MikeSmoke]

Imagine how much profit Apple would make if they actually knew what they were doing. /s

 

[vipergts2207]

Awesome. The iPhone at $943 would be ok.

But the $56 “large increase in markup” at $999 is “greedy”, “absurd”, “crazy price level”

Sounds right to me

Well it’s certainly better than $1000. Though, I’d be hard pressed to pay more than $900 for a phone unless it was truely remarkable. It can be spun however you want to spin it, but under the given premise, the X is being marked up 28% higher than normal.

 

[PickUrPoison]

LOL! This is the greatness only Macrumors can deliver.

$749 based on WHAT exactly? You really think you understand pricing better than Apple or they should charge less than the market will support?

This is a business folks, owned by the shareholders. Shareholders aren’t cool with running a charity.

Apple’s strategy is working to perfection. Absolute perfection.

Cook is doing an outstanding job. Remember, Androids are close to $1000 too.

Armchair CEOs have been complaining about Apple products being too expensive for decades.

If the iPhone X were to drop to $500 tomorrow, Apple would be losing $200 or $300 on every unit they sold—and we’d still have to listen to people complaining about how greedy Apple is and how outrageously high their prices are.