Apple get Half Profit Industry Mobile Phone - Apple’s iPhone accounts for 52% of the overall profits for the entire mobile phone industry, according to a new report by Cannacord Genuity analyst T. Michael Walkley. The iPhone consisted of more than half of the industry’s profits in the last business quarter.
The iPhone 4S is expected to push Apple’s share of the mobile industry’s profits to 60% in the final quarter of 2011. According to the report, the iPhone 4S was the best-selling handset on Verizon, AT&T, and Sprint for the month of October.
The iPhone 4S is expected to push Apple’s share of the mobile industry’s profits to 60% in the final quarter of 2011. According to the report, the iPhone 4S was the best-selling handset on Verizon, AT&T, and Sprint for the month of October.
Two reports have come out which show the immense impact Apple's iPhone has had on the mobile market. The first report from comScore indicates that one in ten mobile customers in the US owns an iPhone of some kind. That's not just smartphone customers; that's all mobile customers. Given that just four years ago pundits laughed off Apple's goal of gaining a modest one percent of the market, that's a pretty incredible milestone.
comScore's numbers show Apple is fourth in overall handset market share in the US, behind Samsung, LG, and Motorola. The firm's other numbers seem to indicate that a large portion of that gap is due to those companies splitting the still huge feature phone market between them, while Apple naturally sells only the iPhone.
Google continues to "win" the market share race among US smartphone owners, with Android handsets claiming nearly half of all subscribers compared to Apple's more modest 27 percent share. However, another report from Canaccord Genuity (via Forbes) shows that Apple's "loss" to Android in terms of market share means next to nothing; Apple earns 52 percent of all profits in the mobile phone industry. Once again, that's not just smartphone profits, but all profits for all phones.
Samsung is the closest thing Apple has to a competitor when we talk about the actual amount of money companies make from handset sales, with 29 percent of the industry's profits. (Clearly, Samsung's, er, strategy is working out well.) All other handset makers are holding on to an extremely small share of mobile industry profits.
Once-mighty Nokia, which held an incredible two-thirds of all mobile industry profits in 2007, now accounts for only four percent of overall profits. All other handset makers, including RIM, are either earning a niche amount of profits or facing huge financial losses. Motorola has posted a net loss every year since 2007, which makes Google's $10 billion acquisition of the company seem that much odder.
None of this is to say that Apple can afford to stop innovating now that it's positioned itself at the undisputed top of the mobile industry's financial heap. Nokia is a perfect example of just how far a company can fall if it rests on its laurels for too long, but it seems unlikely that Apple will make that mistake.
This was said by analyst Michael Walkley of Canaccord Ingenuity on the record presented to investors. Being in the position of runner-up is a tough competitor Apple, Samsung, who got the 29%.
Despite suffering a small drop from last quarter, Apple is still taking more than half of all profits in the mobile phone industry. This is only bound to go up in light of the iPhone 4S's popularity and its availability on three carriers.
Technology analyst Michael Walkley has found that Apple has taken more than half of profits among the leading mobile phone manufacturers:
“Apple generated a remarkable 52% of handset industry operating profits among the top 8 OEMs.”
This is very good news for Apple. Many people expected a significant drop in profit from consumers opting to not buy the iPhone 4 in anticipation of a new iPhone earlier this year. While that did have an effect, it was not nearly as pronounced as others had imagined it to be. As Forbes also points out, Apple is doing 5% better in comparison to this time last year - Apple's profits in Q3 of 2010 were at 47% after the release of the iPhone 4.
AllThingsD also mentions that Apple has done this with only a 4.2% global market share of handset units. With the release of the iPhone 4S, Walkley expects profits to soar even higher:
“With Nokia in the midst of a challenging smartphone strategy transition and our checks indicating RIM and Motorola Mobility continue to struggle in North America given the increasingly competitive Android smartphone market, we believe Apple will gain further value share in the December quarter and could capture over 60 percent of industry profits.”
In addition, Walkley estimates 29 million iPhone units to be sold in December quarter, which will further expand Apple's market share.
In an epic reversal of fortunes, Mr. Walkley pointed out that in 2007, Nokia had 67% of operating profits while Apple had just 4%. Today, while Apple has 52% of industry profits, Nokia has been relegated its rival’s former position with just 4% of operating profits.
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