Anyone wanting an illustration of why smartphone unit sales are not the single most important metric for judging success should check out wealth management company Canaccord Genuity’s findings about Apple’s iPhone sales versus profits.
According to Canaccord Genuity, despite selling less than 20 percent of all smartphones, Apple rakes in a massive 92 percent of operating income. Samsung, by contrast, ekes out just 15 percent to take second place. Everyone else basically broke even or lost money.
As the Wall Street Journal notes:
One key to Apple’s profit dominance: higher prices. Apple’s iPhone last year sold for a global average of $624, compared with $185 for smartphones running Android, according to Strategy Analytics. In its fiscal quarter ended March 28, Apple sold 43% more iPhones than a year earlier, 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.
Apple’s 92 percent dominance of the smartphone market is up from the year before, when Apple still took first place in terms of profit — but “only” accounted for 65 percent of all profits. It’s also up from 2012 when Apple and Samsung were splitting industry profits 50-50, and 2007 (when the iPhone first appeared) when Nokia took two-thirds of all profits.
“The dominance of Apple is something that is very hard to overcome,” Denny Strigl, former chief operating officer of Verizon, is quoted as saying by the WSJ. “Apple has to stumble somehow or another, and I don’t think that’s going to happen.”
