Apple takes home 32% of total smartphone revenue, and 66% of total smartphone industry profits, according to a new estimate today.
The estimate was made by Counterpoint Research, which presented a graph (below) showing that no other brand comes anywhere close to the iPhone’s profitability …
The company said that Samsung was ‘a distant second.’
Apple dominates the global handset market by capturing 66% of industry profits and 32% of the overall handset revenue. The loyal premium user base in the major markets like the USA, EU and Japan is one of the reasons that Apple can still operate at a profit level that its competitors can only wish for. Now with a strong service strategy, Apple’s overall ecosystem is strong enough to guarantee it a steady inflow of revenue in the coming years. In the immediate future, we believe that Apple’s profit for the holiday season will increase with the new line up of iPhones gaining good traction.
Samsung is a distant second, taking 17% of the overall handset Industry profits. The increased mix of Galaxy A Series along with the positive start of Galaxy Note 10 Series was the key reason for the growth.
Chinese smartphone brands operate at low-profit margins, but better than in previous years, even though they are expanding outside China and also penetrating high-tier price bands. Chinese brands offer attractive propositions to mature smartphone users with new feature-packed flagships at affordable prices. Some of these Chinese brands are also now looking at monetizing their userbase by launching services like financial services, IoT products and others.
Apple is, though, making life tricky for Chinese makers.
It is becoming a challenge for Chinese brands to increase their smartphone ASPs and margins due to a combination of longer consumer holding periods and Apple lowering pricing on some key SKUs, which has limited the headroom that Chinese vendors had used to increase their ASPs.
The company notes that global smartphone profits dropped 11% year-on-year in Q3 due to lengthening upgrade cycles and more people opting for mid-range handsets over flagship models. That is impacting on both smartphone revenue and profit.