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Apple commands 73%, Samsung captures 26%

It's no secret that Samsung and Apple are dominating the smartphone market. According to IDC's figures for Q1 2012, Samsung had a 29.1 percent share of the worldwide smartphone market while Apple was not far behind with 24.2 percent.
 
With Samsung and Apple together commanding over 50 percent of the smartphone market, you would expect for them to take home a healthy portion of profits as well. While this is true, according to Asymco, the disparity between the profits reaped by Samsung and Apple compared with the also-rans in this sector is astonishing.
 

[Source: Asymco]

According to Asymco, the pair accounts for 99 percent of worldwide mobile phone operating profit. Samsung is using its nearly 30 percent share of the smartphone market to obtain 26 percent of the profits.
 
However, the biggest winner is Apple, which is pulling in an estimated 73 percent of the profits from the mobile market. Apple's performance shouldn't come as a surprise to many considering that the company pulled in $11.6 billion in profits during the first quarter (fiscal Q2).
 
HTC barely made a blip with just 1 percent of operating profits. LG, Motorola, Nokia, RIM, and Sony have all posted losses with regards to their respective mobile phone divisions, so they don't even factor into this equation.


Samsung Galaxy S III
 
"Seen this way, the story isn’t so much that Apple 'took the profits from the incumbents'", stated Horace Dediu of Asymco. "Rather, it’s that Apple created a vast new pool of profits. And one need not look far to find out where they came from: operators. These profits were mostly carrier premiums for the iPhone 4S."

Source: Asymco



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RE: carriers
By Solandri on 5/4/2012 5:33:36 PM , Rating: 5
The site keeps rejecting my post with links as spam. Here's an abbreviated version:

He's missing the obvious price subsidy the iPhone is getting over Android phones. U.S. carriers are not passing on the full price of the iPhone to their customers. If a car dealer sells two models of car with wholesale prices of $20k and $30k, but he sells them both to customers for $30k, it's pretty obvious which model will sell more.

Tony is attributing the iPhone's strong sales to it being a superior product. While partly true, the biggest reason it's selling is because of its bigger price subsidy. Basically, Android phone buyers are subsidizing iPhone sales. In EU countries where phones are sold unsubsidized and thus the customer pays the full price, the iPhone only has 5%-9% of smartphone market share. If Tony's premise that people insist on the iPhone because it's popular were correct, you'd expect it's market share in those countries to be around 25% like the global average.

The iPhone isn't subsidized because it's popular. It's popular because it's subsidized. At the end of the quarter, it's profits which matter for a company. Apple knows this, which is why it's been content with a 5% market share in PCs. The 5% they hold is very profitable, and they don't feel they can increase it significantly without negatively impacting profits. The carriers haven't figured this out yet, and are chasing the holy grail of market share at the cost of profits.

(This isn't to say the iPhone is a bad product. It's a very good product, best-in-class by many metrics. It's just pretty obvious, to me at least, that its sales figures are being inflated by carriers being afraid to charge full market price for it. This is another reason the subsidized phone business model sucks - it distorts the market based on the whims of a few marketing execs at these companies arbitrarily setting prices. The primary vehicle of market forces - price - disappears into a huge subsidy slush fund, hiding the fact that I'm helping pay for Joe iPhone user's phone.)


RE: carriers
By Tony Swash on 5/6/12, Rating: -1
"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser














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