Apple Pocketed 92% of Total Smartphone Industry Profit In Q4 2016

Must Read

Looking For A Job At Amazon? Jeff Bezos Is Willing To Hire Everyone If……

The global pandemic Covid-19 has thrown the whole world into complete chaos. Amid this perilous situation, one...

CII Suggests India Implement Its Own Version Of “Helicopter Drop” Amid The Covid-19 Outbreak

After Canada, Singapore, Australia and the US, it's time for India to work on a financial plan...

Facebook To Invest In Reliance Jio To Redefine The Market Equations in India?

Since the launch of Reliance Jio in the year 2016, Reliance Industries, owned by Mukesh Ambani, the...

Once the former visionary CEO of Apple Inc. (NASDAQ:AAPL) said that brands must focus on educating customers about products and sales will be skyrocketing by its own. Undoubtedly, it’s the same belief that has helped Apple to pocket 92% of total smartphone industry profit in Q4 2016, leaving its arch rival Samsung much behind who sold an almost equal number of smartphones in the same duration.

According to a recently released research note by Canaccord Genuity analyst Michael Walkley, Apple has dominated the high-end smartphone product with distinctive margin. iPhone has emerged as the most popular and profitable expensive smartphone by far as it helped Apple to garner 92% of total smartphone industry profit, in terms of hardware.

Though Apple took five years to reclaim the numero uno position in the smartphone market by shipping maximum units of iPhone in Q4 2016, Apple has been taking the lion’s share of the smartphone industry profit for the last few years. This one simple stat can highlight the brand impact of Apple: In Q3 2016 Apple sold just 45.5 million units of iPhone but took 91% of total smartphone industry operating profit.

Advertisements

In Q4 2016, both, Apple and Samsung sold a nearly equal number of smartphones. In fact, Samsung sold more mobile phones, in total, 77.5 million smartphones and 12.5 million mobile phones. Despite, iPhone users found the expensive iPhone worth each penny and paid way more for Apple devices than Samsung.

The average selling price of iPhone (ASP) in the latest quarter was US$695 – almost 4X than the ASP of Samsung smartphone that clocked $185.

Below is what Canaccord has got to say as a takeaway:

Given the Galaxy Note 7 issues and strong demand for iPhone 7 Plus models, we believe Apple will extend its leading market share of the premium-tier smartphone market installed base during 2017.

We believe these trends enabled the iPhone installed base to exceed 570M exiting 2016, driving record December quarter services revenue.

Advertisements

We also believe the impressive installed base should drive strong iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns.

While we anticipate a stronger upgrade cycle in 2018 with the 10-year anniversary iPhone 8, our surveys indicate solid iPhone 7 demand that should bridge the gap until a new form factor iPhone is likely released in September.

Brands Must Learn From Apple

The above stat can be seen as a case study for all those brands who believe in volume business and claim to be selling their devices for razor thin margin. Despite being widely criticised for its exaggerating pricing strategy, Apple has given a cold shoulder to criticism and has maintained its profit margin on each iPhone. According to IHS technologies, Apple has to bear $236 to manufacture an iPhone 6s and nearly $225 for iPhone 7. Both the devices, however, were launched with the price tag which was the 3X cost of manufacturing.

Despite growing competition and lowering ASP (Average Selling Price) of a smartphone in the market, Apple refused to compromise with its profit margins. Call it over confidence of Tim Cook & Team or a strong belief in their product quality; the strategy has been paying off, so far!

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Facebook Users Who Dumped It Earlier Are Returning Back To The Platform!

Facebook Inc. (NASDAQ:FB) is gaining ground and it's no less than a surprise to know who is...

Zoom iOS App Caught Sharing User Data With Facebook! Are You Using It?

With the growing number of people worldwide now trying to adapt to the ‘work-from-home’ situation amid the Covid-19 outbreak, Zoom which is...

A New WhatsApp Scam Is So Lucrative That You May Find Difficult To Resist

As the usage of social media and mobile messaging apps has surged tremendously worldwide due to the social distancing and lockdowns to...

Switch Off Your Amazon Alexa If You Are Working From Home!

Weeks after the widespread of the coronavirus, countries continue to go into lockdown mode for more weeks to come. People are advised...

Facebook Portal TV: Once Mocked Widely, Now Sold Out Completely!

Two years go, Facebook Inc. (NASDAQ:FB) released the first device in their Portal video calling series. This move brought them a lot...

Facebook To Invest In Reliance Jio To Redefine The Market Equations in India?

Since the launch of Reliance Jio in the year 2016, Reliance Industries, owned by Mukesh Ambani, the richest man in India, has...

In-Depth: Dprime

YouTube Should Have Bid Adieu To Dislike Button Much Earlier?

Online video sharing platform YouTube can be a ruthless place for content creators targeted by 'dislike mobs'. And the site owners totally understand that...

Facebook Has Pulled Off A Masterstroke By Integrating Its ‘Family Of Apps’?

It’s indeed hard to believe that ONE man sitting at Menlo Park, oversees how nearly a third of the world’s population interacts with each...

Facebook’s Crunch Conquest: By Relying Largely On The US Market, Is Facebook Running a Risk?

Two billion! That's Facebook, Inc. (NASDAQ: FB) for you - Right when you thought that this social-media giant has already connected the entire world, it's...

More Articles Like This