)
Of the 1,000-odd companies in the world that make smartphones, Apple Inc takes the lion’s share of profits. The California-based company cornered 92% of the total operating income from the world’s top eight smartphone makers in the first quarter, up from 65% a year ago, a Wall Street Journalreport says.
South Korean electronics giant Samsung took the second position, albeit way behind Apple at 15% share of industry profits, according to data from Canaccord Genuity.
According to the WSJ report, Canaccord’s calculations shows Apple and Samsung account for more than 100% of industry profits, because other phone makers either only broke even or posted losses.
Although Apple sells less than 20% of smartphones globally in terms of unit sales, its share of profits is miles ahead. Most smartphone makers use Google’s Android operating system, making it harder for them to differentiate their offerings, and prompting many to compete on prices.
One key to Apple’s profit dominance is higher prices. Apple’s iPhone last year sold for a global average of $624, compared with an average of $185 for Android-based smartphones, according to Strategy Analytics. In its fiscal quarter ended March 28, Apple sold 43% more iPhones than a year earlier, and that at a higher price. The average iPhone price in the quarter rose by more than $60 to $659, on the strength of the larger-screen iPhone 6 and 6 Plus models, reports the WSJ.
When Apple lunched the iPhone in 2007, Finland’s Nokia had almost two-thirds of the mobile phone industry profits. By the end of the decade, Apple and BlackBerry joined Nokia in the top tier. By 2012, Apple and Samsung essentially split industry profits 50-50. Now, Apple has surged ahead of the others, the data shows.
Canaccord’s data doesn’t include privately held companies including Xiaomi and India’s Micromax Informatics.
