Although owning guppy-like market share of smartphone sales , Apple is landing whale-sized profits, one analyst said Tuesday. Indeed, within 3-5 years, expect non-smart handsets to vanish from the mobile landscape.
“I don’t see non-smart devices being interesting to vendors in the near term,” Dediu writes. “Each additional dumb phone added to a portfolio will decrease a company’s operating margin.”
The analyst then predicts so-called feature phones are on the endangered list. “I think non-smart phones will disappear entirely from branded portfolios in 3 to 5 years.”
[Fortune]
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
6 responses to “iPhone Is The 5% Runt Dominating Global Profits”
It’s clear that the iPhone is much to expensive. It should cost about the same as the iPod touch which is $300. But the iPhone cost $600 unlocked (or even 600 euro or more in Europe).
GPS/GSM and a little bit better screen and camera cost a few dollars, the additional development cost of the antennas should also be marginal.
I expect Apple to release a much cheaper iPhone this summer.
J.
The asymco charts you show are not, as you say, of the smartphone market. Apple has 5% of the entire mobile phone market. It’s share of the smartphone market is significantly larger. The profit chart also is of the entire mobile market. Apple takes about 50% of all profits from mobile phone sales. The Fortune article you link to gets it right.
 Why would they lower the price of a product they can barely keep on the shelves? Supply and demand dictates it should be more expensive, not less.