Print 50 comment(s) - last by JKflipflop98.. on May 13 at 12:53 PM

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: Mick!
By ltcommanderdata on 5/4/2012 7:11:57 PM , Rating: 2
2. Apple is recordly profitable. Granted that profitability is heavily driven by:
i. Exploitive labor contracts, which are rumored to be far worse than the industry average.

Ironcially, Apple appears to be less concerned about factory conditions than its competitors, because of the company’s unwillingness to talk with advocacy groups like China Labor Watch and Students and Scholars Against Corporate Misbehavior. Li said Dell and HP responded to his group’s reports about working conditions in their factories, but Apple ignored them. SACOM’s Debby Chan told us she had had helpful conversations with both Dell and HP, but Apple had refused to meet with her.

“Dell and Hewlett Packard are not doing as good as Apple is doing right now,” Li Said. “But when we talk about publicity and public relations, it’s another story.”

Chinese labour activists have already said that Apple's outsourced factory working conditions are not worse than the competition. For computers, Dell and HP are specifically pointed out as being worse.

“Although I know that the iPhone 4 is made at sweat shop factories in China, I still think that this is the only choice, because Apple is actually one of the best. Actually before I made a decision, I compared Apple with other cell phone companies, such as Nokia,” he said through a translator. “And the conditions in those factories are worse than the ones of Apple.”

For cell phones, Chinese labour activists specifically point out that if a consumer cares about labour practices they would not buy Nokia. With their drop in market share and quarterly losses I doubt conditions are going to get any better for Nokia contractors in the near term.

Though he believes that Apple has done a better job of inspecting its factories than others, Li maintains that the public is right to put more pressure on Tim Cook’s company than its competitors who have the same problems. Because Apple makes the most profit, he reasons, it also bears the most responsibility for fixing a broken system. He maintains that it wouldn’t take more than 2-percent of Apple’s profits to dramatically improve workers’ lives in China while companies such as Dell and HP would have to spend more.

“Although we think Apple is among the best in terms of auditing, we still think that Apple can do more because it is the most profitable company in the world,” he said. “As soon as Apple is willing to give a small percentage of its profits, the workers can benefit a lot. But Apple is not willing to do that.”

Even though Apple is among the better high-tech companies with regard to supplier labour conditions, it is legitimate to criticize them for not doing more. They are a market leader and the most profitable so they should be constantly improving things to set and example for the rest of the industry. Thinking about it, Apple could in fact use improved labour practices to put pressure on competitors not only with good PR, but also financially. With Apple's profit margins, Apple could say double Chinese labour wages without too much trouble establishing a new industry norm among Chinese contractors and a new wage expectation for Chinese workers, which Apple's competitors would be heavily pressured to match to avoid contract disputes or labour unrest. With competitors having much narrower profit margins or even selling at cost or as a loss leader in the case of Amazon Fire, Apple's competitors will have trouble keeping up with increasing Chinese labour wages. So improved Chinese labour conditions and increased wages would not only benefit Chinese workers, but benefit Apple as well.

RE: Mick!
By TakinYourPoints on 5/4/2012 10:29:43 PM , Rating: 2
Efficiency and volume purchasing are two things that many people here are missing.

Apple produces one new model of phone a year. One, as opposed to the dozens of models that Samsung makes. Apple also buys parts for the same phones in greater bulk than any hardware manufacturer on the planet. All of these things drive down their wholesales costs and drive up profit margins substantially. At the same time it reduces unsold inventory. Nearly everything they sell does so at full price, while the other company with numerous models will inevitably have unsold stock due to one model being much more popular than the other.

As you pointed out, Apple's production facilities at Foxconn are no worse than any others, and are actually better in some cases. There are numerous accounts from workers of much worse treatment and lower wages at the plants of other companies.

Efficiency is the main takeaway here. Blaming things like labor, especially when labor costs make up such a tiny amount of the total cost of everyone's hardware, is completely missing out on the big picture. In this context it is a point only in aid of being inflammatory.

RE: Mick!
By Tony Swash on 5/5/2012 7:05:42 AM , Rating: 2
This worth a read. Brain hall is always good value.

RE: Mick!
By themaster08 on 5/6/2012 4:41:08 AM , Rating: 1
He's also an asshole.

RE: Mick!
By Tony Swash on 5/6/2012 11:06:35 AM , Rating: 2
He's also an asshole.

You must have squeezed and squeezed but a coherent thought just wouldn't pop out. Better luck next time :)

RE: Mick!
By themaster08 on 5/6/2012 11:51:29 AM , Rating: 2
Some things simply aren't worth the effort, such as the constant ramblings of yourself and Brian Hall, both so deeply entrenched within the Apple ecosystem.

You're a pair of closed books. Apple are the best, no amount of debate, truth or criticism will change your views, or even encourage you to open your minds to even consider trying something new.

So you tell me, what's the point? You criticise those for slating products they have no intention of purchasing, so with that logic how can you possibly criticise anything? I doubt you've ever even used an Android, or even a Windows Phone. Try spending £2000 on a Windows machine and compare that to a Mac of the same price, and see which gives you more for your money.

When someone comes up with valid criticism, with evidence, such as Jason pointing out some of Apple's flaws within this article, you simply go off on a tangent, circumventing the point at hand with your endorsement of Apple, and disparaging the competition, of who's products you neither own or use.

Believe it or not, some of us here have used and owned iPhones, as well as Androids, Windows Phones and BlackBerrys. There are some that geniuenely prefer the products of the competition. To some of us, those products provide more value. You obviously are unable to see that, which says everything that needs to be said about you, and your views here.

RE: Mick!
By Tony Swash on 5/6/2012 4:02:15 PM , Rating: 2
That's much better. You are making rational coherent points, unlike your posts that consist of merely foul mouthed insults. We disagree which is OK and and some gently ribbing is OK but all the foul mouthed insults are just unpleasant and unnecessary.

As it happens I am typing this sitting at my work bench beneath which is a MacPro (which includes copy of Windows XP, Vista, Windows 7 and Ubuntu) and a quite powerful PC running Windows 7 both connected via a KVM to the same 30 inch display.

Its true I don't own an Android phone or a Windows Phone but my two brothers owns one each of those phones and I have spent some time playing with each. WP7 is intriguing, innovative and, refreshingly, is not a clone of iOS but it's not my cup of tea and I fairly sure that it will not succeed in the market place.

My other brothers Android phone (Samsung) is obviously a copy of the iPhone and superficially a good one but when I use it the OS is quickly revealed as an inferior copy. It just doesn't feel as well put together as iOS, it's not as smooth an experience.

Interestingly when I ask each of my brothers about their phone use neither actually use their phones as a platform, they make calls, take photos and sometimes listen to music but they are not drawn into their phones as a platform. That's just an anecdote of course but it gels with a mass of evidence that seems to show that Android users are just not great users of the platform.

I remain convinced that Android was a terrible blunder by Google that stumbled into an ill thought out adventure that has taken them places they should not go and which has cost them billions. I am convinced that it would have been a more successful strategy for Google to retain it's alliance with Apple.

RE: Mick!
By themaster08 on 5/7/2012 3:20:33 AM , Rating: 2
Better from you, too. You do realise that it's not necessarily your views that get you downrated, but the way they are expressed? Now you've actually added an ounce of credibility to your post by voicing your opinions of the other platforms, having used them.

I can't say that I completely agree, although I see your point. For many iPhone users, I find that they simply use their phones for making calls, sending messages, a very few applications, and for social networking. That's purely anecdotal, of course. My point is that there are also iPhone users that are not drawn into its ecosystem.

Out of the three, I personally prefer Windows Phone. The UI feels much more intuitive, faster, consistent, and much less clunky to use, for example the use of a physical back button I feel is much more approriate than an on-screen one that is sometimes at the bottom of the screen, sometimes at the top depending on your application. It brings an inconsistency to a platform and adds to its clunkiness, especially for those devices with larger screens.

Only time will tell, of course, but I believe Windows 8 will leverage sales of Windows Phone if Microsoft play their cards right. They need to focus on integration, not just UI synergy.

There are also many aspects in which Microsoft could improve upon, such as Xbox Live. Having achievements on your phone is cool, but what would be really great if there were some true online multiplayer games. A Halo FPS on Windows Phone would be truly amazing. Even a port for the first Halo games would be enough. Instead Microsoft waste their time developing Xbox Live for iOS, which I think was a completely stupid thing to do. One of the features that differentiated Windows Phone was its Xbox Live integration. They might as well have developed it for the PlayStation 3.

Speaking of similar cases, Skype is another. The Windows Phone variant absolutely blows. Microsoft own Skype, yet every other platform has a far superior Skype application. The WP version can't even run in the background. It's a mess. I know Microsoft are going to be bringing further integration with Apollo, however this is now, and this is not helping sales now.

Microsoft need to focus much more on integration with their other platforms and services, and bring them all together in such a way that is appealing to the consumer, not a broken down, half-baked mess because their efforts are focussed more on developing applications for their competitors. Once they get that right, it will add far more value to the platform as a whole, then they need to market the hell out of it, showing the strengths of the platform. They might just then be able to gain some ground on their established competitors.

RE: Mick!
By JKflipflop98 on 5/13/2012 12:53:49 PM , Rating: 1
Which is it going to be? Brain or asshole?

"I modded down, down, down, and the flames went higher." -- Sven Olsen

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