The latest numbers from Canaccord Genuity reveal that Apple accounted for 93% of mobile profits during the fourth quarter, leading the financial services company to raise its price target on Apple shares from $135 to $145. The firm also predicted that iPhone adoption could grow to 650 million users through 2018 as more smartphone owners upgrade to the iPhone 6 and iPhone 6 Plus.
That’s just crazy impressive for a single company to achieve.
One of the few times I come off super-capitalistic, but in my opinion the company deserves the success. They have been very impressive these last 10 years, continually executing, impressing customers, negotiating with vendors, and managing inventory.
If you are fortunate enough to live near an Apple store you can usually get something new or something fixed in stock, or less than 2 day wait. It’s not a huge product line but it’s not tiny, they have grown again since Jobs’ cut it back in the late 90’s.
They set the standard for consumer tech packaging, hardware design, display technology, etc. and it’s good to see them succeeding.
I remember the old Apple that was constantly on the brink of financial ruin. People actually wanted Sun to buy Apple (remember Snapple?). It’s good to see that a company that lays out a strategy and sticks to it ends up with happy customers and a heap of profit. That’s how it’s supposed to work.
It will be interesting to watch apple for the next 10 years play from ahead in some markets, behind in others. They have almost always treated their investors well but sometimes there’s no where to go but down.
If the current global trends for marketshare and profits continue…
I predict Apple with have 98% of all mobile profits on sales of 12 iPhones by 2020.
Also, Samsung, LG, and all the other Android OEMs will be forced out of business by pressure from Xiaomi and other Chinese phone makers who by then will forego the bother of selling their phones and will instead just airdrop them over major Asian population centers.
We’re coming out of a gold rush period – many of those low-end Asian manufacturers will disappear into mergers, acquisitions, or simple closures as the market consolidates.
Some well-known brands will probably have to exit the market as well, though I’d bet on Samsung surviving. Well down from their peak profits of course, but it can be worth continuing in a market even if you aren’t the largest.
I’d expect the opposite trend. Hardware will become cheaper and Apple won’t be able to stand out in the future.
It’s also possible that they continue making money with carrier subsidies, or by maintaining large margins over their cost. If they run into lower hardware costs, but are able to maintain the same margin (dollar margin or percent margin), they might find themselves even more profitable if they have a product people want over their competition but weren’t willing to pay ‘x’ price for.
Too late, thats already happened, and people have still chosen Apple. Resoundingly so.
…still chosen Apple in the U.S. Resoundingly so
Here you go.
One thing should be clear from the figures is that Apple has a huge margin on the iPhone; that’s how they’re taking >90% of the profit without 90% of the market. So I’d suggest Apple have plenty of headroom from price cuts if they had to.
In 2-3 years all phones will be sold outright with no carrier subsidies. Buyers will have a choice of paying $700 upfront for an iPhone or $50-200 for an Android or Windows phone. That will have a massive effect on Apple sales.
Everyone I know that has an iPhone bought it outright and unlocked.
Then they use cheapo Pay monthly SIM Only deals from the likes of GifGaf and Three (I’m in the UK).
If you do the sums then it seems to break even after around 20-22 months if they are like me on a one month rolling contract which most 12 month deals become after a year.
It also means that you are free to move to another network and take your number with you to another network of MNVO if you find a better deal.
For me, Three is ideal because I get roaming in 20+ countries using my UK SIM deal. This includes the US (on AT&T and T-Mobile networks) and soon even places like New Zealand. As I travel quite a lot (I’m going to be in the US for more than a month this summer) then this saves me a good $200 a year in calling and data charges.
I don’t have an iPhone but use an old Samsung Galaxy Mini on my travels although I’m looking into a Dual Sim Phone.
In 2-3 years all phones in the U.S. will be sold outright with no carrier subsidies
It seems all I do today is fix these kinds of “mistakes”. On the serious side, it’s true. Elsewhere, buying non-subsidized phones is not a new idea. Most of the people I know do that for a long time (think many years), myself included.
not a healthy state for the market to be in.
Apple don’t make their profits by selling phones. They make money by extorting massive subsidies from phone carriers. Each iPhone sold in the US (by far the largest market) is subsidised an average of $400.
http://www.businessinsider.com.au/apples-iphone-carrier-subsidies-2…
“Apple, Samsung face tougher China market after subsidy cuts.”
http://www.smh.com.au/business/apple-samsung-face-tougher-china-mar…
In other words vendors of expensive phones are probably going to lose marketshare very rapidly.
How is it extortion? Carriers have the option of not providing subsidised iPhones.
Carriers all over the world have been doing this with various handset makers for a long time. Long before the iPhone existed.
Edited 2015-02-10 16:40 UTC
If someone says “I will only allow you to sell this product if you agree to buy a minimum of 10 million units per year for twice what it is worth” you are being extorted. It may be legal but it is still extortion.
No it’s not. Not by any definition. Asking for a minimum order is a normal business practice in markets where physical goods are being sold. Whether it’s wheat, oil, or phones.
It’s called leveraging economies of scale.
The problem with your argument is that Apple doesn’t offer large discounts for large volumes. Realistically a carrier should expect a 30-40% discount for the volumes they purchase.
The carriers are forced to buy far more phones than they want at a much higher price. It is presented as a take it or leave it proposition.
” It is presented as a take it or leave it proposition.”
And what’s wrong with that? Apple is in a strong bargaining position because they know they’re products are in demand. There’s nothing wrong with that, neither ethically nor legally.
This isn’t a monopoly, the carriers have a choice to tell Apple to get lost. There is no shortage of other phone manufacturers. Apple is behaving in a way that *any* company would in a free market. Who offers discounts when they can afford not to? – and to a bloody telco carrier at that.
What extortion? Does Apple have pictures of the phone carriers’ CEOs in compromising positions?
One definition of extortion is: “An excessive or exorbitant charge.”
I’d say that fits
android phone, 4g lte capable, unlocked bootloader, user replaceable battery, sd card. 1GB+ ram, quad cortex a7 would be fine. doesn’t need to be top tier.
That’s all I want. The problem is that it seems almost impossible to find. Sorting through all these android phones is murderous.
You’re not looking very hard. Many of the budget MTK phones have all those features (unlocking the bootloader is trivial.)
Just look at the mid range Huawei, ZTE or Alacatel models. Most of them have exactly what you want.