profits

When you hear about declining iPhone sales and factoids like Huawei overtaking Apple as the world’s second biggest smartphone maker, it’s easy to lose sight of just how successful Apple is at selling phones.

A new report from Counterpoint Research is a reminder just what a profit-generating powerhouse the iPhone actually is. In Q3 2019, Apple captured a whopping 66% of industry profits. Second place winner Samsung, by comparison, pulled in just 17% of handset profits.

2018 was the year in which Apple became the first public company in history to reach a valuation of $1 trillion. Many articles and listicles have listed Apple as the world’s most profitable company at various points in its existence.

But is it? Based on the last year, the answer is no. Not even close. In 2018, Apple’s $59.53 billion in net income was dwarfed by the $111 billion made by state-run Saudi oil giant Saudi Aramco.

Facebook lost more value today than any other company in history: $120 billion. The massive selloff came after CEO Mark Zuckerberg admitted that the growing privacy concerns of the public, and the likely response of lawmakers and regulators, will hit the company where it hurts: in the pocketbook.

On the same day Facebook lost 19 percent of its value, Apple’s share price was unaffected. This is because the two companies have diametrically opposing views on the privacy rights of the public. What hurt Facebook so much is actually one of Apple’s strengths.

A few months ago, Apple surprised everyone by announcing its latest smartphone was a huge hit, resulting in better than expected earnings and a big jump in company shares. That didn’t happen to Samsung.

Instead, the Korean company missed analysts’ profit expectations, partially because of sluggish demand for the Galaxy S9.

According to new research from Counterpoint, Apple took home a massive 86 percent of total handset market profits for the fourth quarter of 2017.

Most impressive of all is the fact that the iPhone X, which was slammed as being too expensive, earned 5x the combined profits of more than 600 Android device makers. Maybe that $1,000 price tag wasn’t such a mistake after all!

Apple earnings calls are usually a time for celebration and gloating, but for the first time in over a decade the company is poised to post declining profits.

Tim Cook warned Wall Street that this would likely happen due to declining iPhone sales. Have we really reached “peak iPhone”?

Analysts and reporters will be grilling Cook and Apple CFO Luca Maestri during today’s Q2 2016 earnings call. Investors will be looking for signs that Apple still has room to grow. And Cult of Mac will be right here, liveblogging the entire Apple earnings call — and translating the financial gibberish — when the big event starts at 2 p.m. Pacific.

Get in on the action below:

Wall Street seemingly loves to be down on Apple, but if you want some figures to remind you of what a massive profit-generating giant the company is, look no further than the latest numbers collected by SiliconValley.com.

Analyzing the stats coming out of the top 150 Bay Area tech companies for 2015, Apple not only ranked number one in every important metric, but also recorded profits of $53.7 billion in 2015 — which translates to roughly 40 percent of the entire $133 billion Silicon Valley profit pool for the year.

And that’s not all.

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.

The smartphone wars are two company race and it’s not even close.

Apple and Samsung are dominating the competition so badly that a new report from Canaccord Genuity claims the two tech giants account for 106% of global smartphone profits.

Take a look at this chart:

Everyone knows Apple is incredibly profitable, but did you know that the top-earning tech company brings in more money than Hewlett-Packard, Google, Intel and Cisco combined?

That’s according to the San Jose Mercury News’ newly published Silicon Valley 150 list, which ranks 75 tech companies using data from Bloomberg and U.S. Securities and Exchange Commission filings.

Apple’s explosive success since the launch of the iPad has helped propel the company higher up the ladder of of the Fortune 500. This year the company broke into the top 20 – nabbing the number 17 spot.

The higher ranking shows consistent growth by Apple – last year the company broke into the top 50 to land at number 35. In 2010 and 2009, the company scored 56 and 71 respectively.

In a mobile industry that’s simply booming, there’s only two phone vendors reaping the majority of the benefits: Samsung and Apple. In Q1 of 2012, Apple and Samsung combined for 99% of mobile phone vendor profits — the remaining 1% belonged to HTC. Independently, Apple holds the lion’s share of profits with an incredible 73% of operating profits thanks to carrier premiums for the iPhone 4S. Samsung, while leading in mobile phone shipments, only grabbed 26% operating profits — which isn’t really that bad considering every other carrier (other than HTC) managed to face significant losses.

When analysts and companies compare mobile devices, the big number everyone focuses on is how much market share each platform or product has in relation to its competitors. While this makes for a good overall view of the playing field, it doesn’t always give a clear or accurate picture of which companies are doing well on a single metric as a model for success and ignores others, like whether a platform or manufacturer managed to turn a significant profit.

This is, of course, a very big point when discussing Apple’s iOS succes compared to Android as a whole or to individual manufacturers – and something that Asymco’s latest review of the mobile phone market in which Apple accounts for a small 8.8% of handsets but reaps a whopping 73% of the industry’s profits.

If you’ve read the Steve Jobs biography by Walter Isaacson, you may remember that Apple’s board was initially very hesitant to give Jobs a green light about creating Apple’s retail stores. A decade later, the stores have been an amazing success with hundreds of outlets around the world. They have also become the most profitable retail outlets in America.

Research company RetailSails ranked the country’s top retailers using the common retail metric of annual sales per square foot. Apple nabbed the top spot with sales averaging $5,647 per foot – nearly double high-end jeweler Tiffany and Co., which came in a distant second.

It’s pretty much impossible to argue that Apple didn’t revolutionize and reshape the mobile intdustry in the U.S. and around the world. The iPhone changed the concept of what a smartphone could be in 2007. The App Store reimagined smartphone apps and how they could be sold in 2008. And the iPad revolutionized the face of tablet computing in 2010. Those are pretty significant accomplishments technically and culturally.

Now, we also know how Apple reshaped and grew mobile industry financially… and how all of that growth is pocketed in the process.

Here’s a good riddle: What has just four percent of the market, yet pockets more than half of the profits? The answer is Apple, the tech giant known for squeezing every ounce of profit from its iconic products. According to one analyst, Apple took 4.2 percent of the mobile handset market and transformed it into 52 percent of industry profits. Neat trick, huh?

Apple’s profits stashed overseas is getting restless for a trip the the United States. The tech giant, frequently seen wealthier than the U.S. government and Exxon-Mobile, is lobbying the U.S. government for a five percent ‘tax holiday.’ In a bizarre picture, Apple is aligned with Republicans and against the Democratic American President.

One of the little secrets that has made Apple the most profitable company in tech is their ability to achieve high margins on their gizmos, but the new MacBook Airs might set a record even for Apple: according to analysts who have estimated its bill of materials, the entry-level, 11.6-inch MacBook Air costs only $718 to make.

That means that for every 11.6-inch MacBook Air Apple sells, they make $281, a profit margin of 28.1%. That’s for the 64GB: buy yourself a 128GB MacBook Air and the profit margin jumps to 34%. Buy a 128GB 13.3-inch MacBook Air and that margin nudges forward again, this time to 37%.

Those margins are excellent, even comparatively: Apple, on average, achieves a profit margin of just 20% on the rest of their laptops.