Feeds

Apple rakes in 60% of profits in still-surging smartphone market

Detractors cavil while Cook & Co. laugh all the way to the bank

Secure remote control for conventional and virtual desktops

The global smartphone market continues to skyrocket, and Apple and its iPhone line continue to slurp up the lion's share of that market's profits despite holding a relatively small marketshare when compared to arch-competitor Samsung.

Percentage of operating profit from mobile phones (globally, select vendors)

Apple pulls in an amount of profit in the mobile phone market ...

Percentage of global phone market (units shipped/quarter)

... that's markedly disproportionate to its share of that market (source: Asymco)

"Since the launch of the iPhone," writes Horace Dediu of Asymco, "the net profits earned by the collection of [smartphone market] protagonists shown was $215 billion. 60 per cent has been earned by Apple."

Why this dominance in profit on a relatively small market share? While we're certain that some observers will fulminate about "sheeple" and "fanbois", the simple fact is that smartphone consumers are willing to pay for the product they prefer. You pays your money and you takes your choice, as the hoary cliché puts it.

Or, as the Romans put it, de gustibus non est disputandum. Nor should there be arguments over taste, in this Reg hack's opinion; to wrestle another cliché to the floor, one man's meat is another man's poisson.

Dediu has a slightly different take on Apple's profit dominance, saying that the consistency of Apple's market performance is a rare feat, one that is typical of a monopoly or a protected market. But Apple has no monopoly, nor is the smartphone market protected in any way other than through carrier agreements. "Apple's lack of market monopoly coupled with a (near-) monopoly in profits can only be explained by disproportionate value creation," he writes.

Enough people see enough value in Apple products that are willing to pay enough for that perceived value to keep Apple's "(near-) monopoly in profits" chugging along.

And there doesn't seem to be a brick wall facing Apple's smartphone-profit juggernaut on the immediate horizon. There has been much talk about the "saturation" of the smartphone market, but Dediu's numbers don't demonstrate that happening quite yet.

Phone shipments by system software

'Non-smart' phones have begun their inevitable decline (source: Asymco)

"Note that prior to 2012 the non-smart market seemed to be holding steady in spite of the growth in smartphones," Dediu writes – but no more. While the smartphone-growth trend line continues steeply upward, the "non-smart" phones' stats are stuttering downward.

Not that Apple's ongoing success will necessarily ensure it an easy ride into the future. The iPhone 5c stumble, for example, certainly shows that the Cupertinian product planners are far from infallible.

That said, CEO Tim Cook's mission statement that "we're not in the junk business" seems to be working out quite well – although as Wall Street's boilerplate disclaimer puts it, "past performance is no guarantee of future results."

No guarantee, of course, but certainly an indicator worth watching. ®

The essential guide to IT transformation

More from The Register

next story
Apple's iWatch? They cannae do it ... they don't have the POWER
Analyst predicts fanbois will have to wait until next year
The agony and ecstasy of SteamOS: WHERE ARE MY GAMES?
And yes it does need a fat HDD (or SSD, it's cool with either)
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Apple to build WORLD'S BIGGEST iStore in Dubai
It's not the size of your shiny-shiny...
Just in case? Unverified 'supersize me' iPhone 6 pics in sneak leak peek
Is bigger necessarily better for the fruity firm's flagship phone?
Steve Jobs had BETTER BALLS than Atari, says Apple mouse designer
Xerox? Pff, not even in the same league as His Jobsiness
Apple analyst: fruity firm set to shift 75 million iPhones
We'll have some of whatever he's having please
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?