Apple now has 95% of the smartphone industry’s profits

by: Matthew BensonNovember 17, 2015
2.3K

Earlier this year, a report by The Wall Street Journal caused a minor uproar among many fans in Android land when it reported that, as of Q1 2015, Apple was raking in 92% of the smartphone industry’s profits, with Samsung earning 15%. The numbers exceed the standard 100% due to these two companies making profits at the expense of other companies such as LG or BlackBerry. While some might still be reeling in reaction, the profit picture about to be painted is likely to push them over the edge: according to a new study by Canaccord Genuity, as of Q3 2015, Apple is now making 95% of the profits.

Canaccord

The above chart essentially says everything. After the iPhone 5 released in 2012, it would appear the company’s sales started to slide, however things began to pick up early in 2013 and then have continued to climb to ever higher heights since then. Samsung’s profit data, on the other hand, is an almost mirror image of Apple’s, with 2013 serving as the highest point in the recent past, and dropping sharply thereafter.

Of all the other companies listed, BlackBerry has fallen the farthest, however things may start to change now that the Priv has released. Lenovo/Motorola and Sony have almost no growth whatsoever. LG and HTC have also fallen over time.

BT-AD014_SMARTP_16U_20150712190305-840x1504

About Apple

Like it or not, Apple can command such a profound profit despite only accounting for around 15% of global smartphone sales. This is due in no small part thanks to the pricing of the iPhone, which as Phone Arena points out, “the price of the average iPhone going up from $620 back in 2014 to $670 during Q3 2015, and this at a 37 percent operating margin. Apple doesn’t need to win the volume game in order to dominate the profit charts.”

The study found that Samsung now has an average sale price of $180 per handset, which means that despite the success of devices like the Galaxy S6 or Galaxy Note in some countries, the world-at-large clearly isn’t purchasing such expensive handsets. Part of this can also be attributed to the Innovator’s Dilemma, a subject matter that came up in recent weeks due to one analyst’s decree that Samsung will exit the smartphone business within the next 5 years.

nexus 6p vs iphone 6s plus aa (17 of 26)

To boil the idea down into a simple situation, now that there are so many OEMs making Android phones, and due to all of them using Android, customers will no longer be inclined to pay top dollar for a device that has the same features or functions as a cheaper one. Even adding in extra bells and whistles typically will have no effect on the average customer, who is looking for the best deal possible rather than having a burning compassion to purchase the absolutely tip-of-the-top.

This is also why Apple can still command such a high price tag for its products: no one else can make iOS devices, thus if you want in you need to pony up the pennies. As the iOS/iPhone brand can not be “eroded” by the presence of competition, those who want an iPhone are thus forced to either buy one, or else “settle” for an Android alternative, something that some people absolutely refuse to consider. Likewise the fact that Apple itself doesn’t make a “cheap” iPhone ensures that even within its own customer base, the profit picture will always be paramount.

What will happen?

nexus 6p vs iphone 6s plus aa (20 of 26)

Each year, there are “doomsday” predictions that Apple will finally bite off more than it can chew; that its latest product portfolio will fail to attract. The iPhone 6S for example, was criticized by some for making 3D Touch a major selling point despite criticism that it’s not simplistic or intrinsic. Still, the company has broken all iPhone sales records once again.

What is not usually highlighted is the fact that Apple is also releasing its devices in new territories each year, which means more sales opportunities. It would be quite interesting to see what the profit picture might look like if the company was consistently releasing its hardware only in the same markets year-after-year. While growth is growth, the current situation is a bit tantamount to a fish swimming in a bowl one year, a pond the next year, and the ocean the year after that: as the magnitude itself increases so too does the potential for new things to happen.

The Size Problem

nexus 6p vs iphone 6s plus aa (2 of 26)

Perhaps the one big “problem” Apple may face with respect to its iPhone is the size itself: there are, and will continue to be, customers who simply refuse to go beyond the 4-inch form factor that was last seen on the iPhone 5S and 5C. Even on a personal level, I know dozens of avid Apple supporters who are still sporting their own 5S due to the “unwieldy” size of even the standard 6. Many don’t want to purchase another 5S if theirs breaks due to outdated hardware, but feel abandoned as Cupertino has “forgotten” about them.

It is with this contention that rumors of an iPhone 6C coming in Spring 2016 seem more plausible. Apple itself must be aware of the segment of its customer base resisting change, and at the risk of losing them entirely, could easily put out an appeasal product. The 6C need not be the creme-de-la-creme, but so long as it has updated hardware components beyond the 5C and perhaps a new design (even if it’s plastic) it will appeal to them.

7th Heaven may be (somewhat) less likely

2016 will also bring with it the probable production of an iPhone 7, and with it a brand new design. This of course, will restart the entire “buy it again” purchase cycle and thus, provided nothing major changes in consumer spending habits, next year will see even greater sales. Perhaps. While there will always be a dedicated collective of customers who purchase Apple no matter what, looking at the general public, next year could – in theory – be the first to break the recent growth trend.

watch force touch

Can the iPhone 7 have anything as “revolutionary” as Force Touch/3D Touch?

Even with an all new design, the iPhone 7 is less likely to have “revolutionary” features though the company will certainly seek to market something. Consider that, for many, the iPhone 6 represents the epitome of the product they always wanted. It’s bigger and better than those iPhones that came before it, and in theory it’s enough. The iPhone 6S gets a major market simply because all those on two year contracts are upgrading. Likewise, some customers specifically wait for the “S” models to change as they typically have more dramatic differences than the “non-S” iPhones which are mainly used to show off a new design.

Even if the rumors are true and Apple puts an AMOLED screen into the iPhone 7, the tangible benefits may be less noticeable for content consumers. Sure the colors might be richer and the blacks inkier, but faced with the prospect of spending on an all new phone when their current one is more-than-suitable, who is to say how many will open their wallets.

What does all this mean for Android

huawei-g7-plus

For Android OEMs, the profit picture is seemingly getting bleaker by the minute. Whereas last year saw a few “shockers” like the OnePlus One – top tier specs in affordable clothing – this year has seen even the budget phones go big. The Moto G (3rd Edition) for example, has some very impressive features and specs for some very modest money. The result is that a new product such as the HTC A9, with a $500 price tag, is perceived by many as absurdly overpriced, especially given its specs.

Android makers such as Samsung have already demonstrated that they understand the problem at hand and are in need of major changes. But it’s obviously not easy. Companies like Huawei and Xiaomi are growing in no small part due to their sales strategies focusing on online retail instead of big box outlets. That Huawei was chosen to produce the Nexus 6P was a major endorsement by Google. OnePlus gets an endless supply of free PR with its invitation system, and thus need not spend money when it has the tech press pouncing on any possible potential for another window to purchase. 

OEMs will continue to focus on the mid-to-low end market to account for sales in developing countries, but it may be more difficult to reduce money for marketing. At the very least, a lack of visibility on TV commercials or online ads might be seen as a sign of weakness, or else it might literally mean that some customers forget about the company when it comes time to make the next major purchase.

What this means for Consumers

Perhaps the real key here, is that unlike with Apple, in Android land the consumer is the real winner. Phones have become more affordable than ever, and this has allowed millions around the world to enjoy good products at prices that meet their own individual needs. Customers in developing countries don’t have to settle for outdated specs from years ago simply because they don’t necessarily have the disposable income to afford a Galaxy S.

It ultimately becomes the company’s responsibility to find new ways to make a profit, and that goes back to the very nature of business itself: remain competitive and constantly invent or innovate to stay alive. It should be clarified that, while larger more financially sound corporations may be able to do this through much research, development, investment, and resilience, many smaller companies can not. To this end, the effect can be disastrous and that ultimately has a profound effect on the employees’ livelihood as well.

Moto X Pure Edition Vs iPhone 6S Plus-13

At the same time, Apple becomes less and less relevant in the lives of many around the globe simply because they can’t afford the products or else don’t want to pay such prices. While one might argue this doesn’t really matter given the company doesn’t cater to the “have nots” anyway, it also means that Apple is under less direct pressure to invent something new, save for the heat from shareholders. And let’s not forget that companies like Samsung and LG have far more on their plate than just smartphones, and companies like Huawei are eager to expand into new markets.

Wrap Up

Android fans may be disappointed by this the data reported in this piece, however it’s important to keep in mind that it has little bearing on your own ability to enjoy and love Android. Google’s mobile OS is only getting stronger, and will continue to do so in the future. Likewise, while companies are currently facing a tough time when it comes to make money from mobile, there is (hopefully) light at the end of the tunnel, be it a new product category or else some other change entirely. There is so much in tech these days, the sky’s the limit.

What do you think? We would love to hear your thoughts: please leave us your comments below!

  • OrionBeast

    Oh how times change… 2012 Samung ads be like ‘we the new boss, the innovator/brand marketing mammoth, etc.
    Nothing lasts forever; Apple is really doing better than i expected. In an ever evolving industry, as a consumer, the future is exciting.

  • gg

    How the hell is this even possible :?

    • Prasad

      It is possible with high efficiency and merciless control over hardware and software…

      If Apple is making a competent product with much less money then it may be possible…

  • OrionBeast

    What does it mean for Android? TD;DR: Nothing.
    The article also fails to mention all carriers pushing ‘Upgrade Anytime’ option, which is expected to stop the ‘2 year cycle’ for contracted customers. This likely means more iPhones will be sold than the author is predicting. If iPhone comes out in 3 sizes, and appropriate price for each ($450 iPhone 6C 4 inch, $550 iPhone 6S, $650 iPhone 7 and $750 iPhone 7 Plus) i don’t see how most people (about 40% of iPhone user base hasn’t upgraded from iPhone 5S) won’t upgrade.

    For consumer, its a win-win situation, but for OEM’s it might not be. (Look at black friday sale, iPhone 6S $200 off on installment plan, galaxy s6 $250 + $100off via price match). Essentially, iPhone would sell @ $550 (6s plus) / phone while samsung s6 will sell @ $300.

  • Josué Gutiérrez

    This industry is so plain stupid, nobody is making money out of it. Only Apple. XD The first android OEMs are near extinction and chinese OEMs are going to get the same fate in years to come. Nokia was right, is better to sell you smartphone business while you can (you hear that Sony? HTC?). Android is a joke…

    • Kawshik Ahmed

      But I find that funny the first Phone OEM that died (Nokia) didn’t even made Android Phone (excluding X-Series, which came when Nokia was it’s dying breath).

      • Josué Gutiérrez

        They sold their phone division, as Motorola did to Lenovo (Google) and Blackberry almost did too to Samsung. HTC is next, then Sony will die and so on. They can’t make money of android consumers. They are mostly poor. Even if I have a S6, I have to admit most android users are poor. Not all but almost all are poor.

        • Meny Beth

          So, If Apple monopoly the smartphone market. We will be poorer soon,

          • wabbies

            Apple can’t have a monopoly, that’s illegal (At least in Europe it is). So this will never happend (luckily)

          • Toukale

            Wrong, it is not illegal to have a monopoly, there are no laws against that. Google currently have a 90% market share in search in Europe. They are getting in trouble, not because of the monopoly position in search, but rather because they are using their search monopoly as leverage for other areas.

          • wabbies

            You are correct, I meant to say that it is illegal for companies to fuse when they will have to much market share. I think Apple and Samsung is a good example: Apple would not be allowed to buy Samsung (according to European law), because together they have a marketshare of something like 98%. I don’t know a lot of economics, but I believe it works this way. Not sure if the EU can prevent 2 not-european companies to fuse though.

          • smokebomb

            It’s illegal in the U.S. too, but the politicians are paid off.

          • Diego

            Not necessarily no.
            The middle class on my country can afford dollar 500 or 600 phones.
            And don’t buy another until like 3 years later.

        • Kawshik Ahmed

          Welcome to Planet Earth! most of the population is poor. 10% people hold the 90% wealth of the planet it doesn’t mean the other 90% population won’t use a smart phone.
          I agree it’s sad to see the less earning but that’s not the fault of Android rather it’s buyer don’t spend much on paid apps or don’t use IAP.

          • John Doe

            Richest 1% Will Have More Wealth Than Remaining 99% By 2016: Oxfam Study

        • smokebomb

          Poor users buy cheap phones. It’s simple math. The issue is that most of the world could be considered poor when the poverty line for a family of 4 is around 20k. There are millions of people making that or less in the U.S. alone.

    • Flavio

      You are extremely prejudiced. I can buy 100 iphones if I wish.

      Do you own HTC shares? Is it your concern? Why?

      Android has never been stronger and the race to the bottom is a sign of strength of the ecosystem and of Google. 1.4 billion users won’t go away anytime soon.

      Some consolidation is necessary. The market is too fragmented but there will never be a lack of android OEMs willing the sell wonderful handsets.

      • Diego

        Its not about market share, its about if OEMs will continue making phones.
        Android is a monopoly if you look at market share.

      • mobilemann

        “Android has never been stronger and the race to the bottom is a sign of strength of the ecosystem and of Google.”

        It’s cool, this shows no understanding whatsoever of how OEMs operate.

    • John Doe

      Yet here you are …

    • smokebomb

      Apple is making money because they put old hardware into a shiny shell and sell it for $800. It’s pretty easy to make a profit when the biggest cost is software development and the internal hardware already exists.

      • shivansh

        Still apple ios runs smoothly and they successfully deliver the exacts experience and satisfaction like every user want. Specs dosent evwn matter if your phone is hanging five times a day even if its running on latest and greatest hardware and every android weather is samsing or htc lg they lag after some months.

        • Kristian Robertsen

          Well, that’s just not true.
          The Nexus 5 from 2013 still runs without a single hitch on Android 6.0. If you want an iPhone equivalent you go for a Nexus and you get every feature of the iPhone and then some, sans iMessage which isn’t really a selling point anymore.

      • Prasad

        in other words Apple is so efficient – it can make a competent product (check camera, performance and other tests) with much less cost…lets blame Apple and its customers for that….great logic by fandroids.

      • It’s called business. The more money you have, the better off you’ll be.

  • Pez Smith

    What happened to the Roman & British empires?
    :)

  • AbbyZFresh

    At this rate, manufacturers are gonna debate whether continuing making Android phones(or smartphones in general) are worth the costs if no profit is coming, let alone Apple have over 95%.

    This is exactly what happened to the PC industry.

    • Flavio

      Some consolidation is necessary. The market is too fragmented

    • Sherpa

      Fragmentation will always remain with Android market because there will always be manufacturers spitting out $100 phones and many people will buy them. Google needs to fix this buy enforcing strict rules on hardware requirements.

    • Prasad

      Once the hotness of smartphones cool down then very few OEMs will be left.
      Apple would settle at 50% profits if they continue to innovate.

  • Prox

    Am I missing something? The graph shows Apple above 90%, Samsung around 10%, plus a slew of other companies over 1%. This would equate to greater than 100%. Something about this report is fishy……

    • Raymond

      Looks like someone didn’t bother to read the 1st paragraph…

      • Prox

        ah, i see, nevermind.

  • Virusgunz

    Yeah well thats what happens when you make phones with not even a full hd screen and shitty spec and let it cost 700 euro you dont need to sell that much for a profit then

    • mobilemann

      you know that your avatar is a pro Apple, pro iOS one right? It’s greenposion, which was a jailbreak. Those guys love apple. There are a ton of advantages to buying apple, you’ll get over it kid.

      • Virusgunz

        i know that lol ive done a whole lot of jailbreaking on my idevices but for the price and what you get ? i stopped buying an idevice since the iphone 5
        and on top of that i woudl have never bought an idevice if there wasnt any jailbreak out

    • Android Developer

      What about the taxes that Apple almost doesn’t pay (about 2-3% instead of around 30%) ?

      • It’s more than Google with their Grand Cayman bank accounts. But that said, you do know these companies are fully following the laws created by corrupt government officials and simply using the laws created to help other companies?

        • Android Developer

          I know. I don’t get how could such laws allow it to happen.
          I also wonder which other companies do it, especially manufacturers (LG, Samsung, HTC,…) . I think that they do not do it, as they are in the far east and not in the USA, so they have different laws.

    • aaloo

      you have no idea about market economics, do you. lol. apple can’t make enough phones to meet demand at that price point. what do you think will happen if they priced the phone at 350. any business will price their product at the highest price that they makes them the most money. remember the first iPhone was dropped by 100 dollars after release because it wasn’t selling too good. remember the HTC one, or amazon fire phone. price of an object is determined by market supply and demand. you think samsung is cutting down price of its latest phones because it feels charitable. lol. because it has excess supply that it needs to get rid of. Man, some people are so delusional.

    • Prasad

      ya ya specs, specs and specs only matter… why care about performance?

      If Apple can make a competent product with much less cost…ie efficiency… then whom should we blame? Lets blame Apple because we hate Apple.

      • and save money in the process, too.

  • #Note5 IsBoss

    Samsung is technology and Android. Without Samsung Apple iPhone isn’t worth shit.

    Since inception of that useless iphone it’s been Samsung’s processors, Samsung’s LCD screens, Samsung’s camera parts, Samsung’s memory everything Samsung.

    Let’s face true reality Apple doesn’t make phones they just put their name on shit others make for them in sweatshops.

    Apple users are typical clueless Joe’s technology simpletons at best simple dorks.

    #SamsungIsTechnology

    • Samsung doesn’t make iPhone’s displays (they make iPads’, if I remember correctly) & camera. I don’t know about memory, though.

      Sony makes iPhone cameras; JDI & LG makes iPhones’ displays.

      And what does this have to do with Android. Samsung WANTS to separate themselves from Android.

    • Leo9

      Really?

      Screen : Japan Display / LG / Sharp.
      SoC : Samsung or TSMC (A8 was 100% TSMC; A10 will be 100% TSMC).
      NAND : Hynix or Toshiba.
      Camera : Sony since… forever.
      Memory : SK Hynix or Samsung.

      “everything Samsung”… nice try though.

      • seattle tech

        I’ll give more ammo to richard since I enjoy the reactions.

        Screen : Rumored the iphone 7 will have an amoled screen and almost all android flagship phones have or are moving to amoled
        SoC : Samsung or TSMC – previous socs before the 5 were made by samsung
        NAND : Samsung owns almost 50 percent of the nand market and if it was in the iphone it would be above 70
        Camera : Sony is tops and they are investing heavy in cameras as is samsung
        Memory : SK Hynix or Samsung.

        So if Samsung wasn’t apple biggest competitor, Apple would in fact want all samsung components. The iphone 7 is shaping up to be a samsung phone designed by apple with ios

        • Android Developer

          This is interesting. What about the other parts?

        • Prasad

          you mean all the parts have alternatives and how that makes Samsung any favor? Nice try…

    • PC_Tool

      Did Yarrell just say that Samsung makes “shit” in sweatshops?

      …I thought he was Samsung Fanboy?

    • squiddy20

      He look! You’ve demonstrated the ability to copy and paste! Does a good boy want a cookie?! https://disqus.com/home/discussion/pocketnow/iphone_profits_make_up_94_percent_of_the_global_smartphone_pie_pocketnow/#comment-2364547532

    • Sherpa

      Obviously no one makes 100% of the parts they use. When a builder builds your house, they use parts from other vendors/manufacturers. Yet they label the house as built by them. Do you see the similarity? Same goes for cars. They use other vendors/manufacturers for seatbelts, brakes, tires, etc.

    • farmer

      I’m lost. How is Samsung Android? Did you mean to say that Android is Samsung or are you implying that Samsung somehow makes Android great?

      According to Wikipedia,

      Android is a mobile operating system (OS) currently developed by Google, based on the Linux kernel and designed primarily for touchscreen mobile devices such as smartphones and tablets.

      Does it mention anything about how Samsung is Android? Weird!

    • Prasad

      Nice Joke. Samsung is just one of the providers of A9 and they screwed up that as well. So Apple is going 100% away from Samsung. Just follow the news….

      without Samsung Apple is much better because others are not diluting iPhone brand like Samsung clones. HTC is the new Samsung…

    • Loogle

      So basically if some company develops better hardware tomorrow apple isn’t beholden to the outdated infrastructure? Sounds like smart buisness to me. I guess it’s a good thing SMART people run Apple and not you.

  • Android OEMs’ biggest competition is each other, not Apple. Apple may see Android as a threat, but Android OEMs sees each other as a threat even more. I don’t think Google even cares enough to see iOS as a threat to Android’s existence as long as they earn money (that doesn’t mean Google doesn’t care about Android).

    • Apple doesn’t see Android as a threat, though.

      • Nah they do, but the iOS vs. Android competition isn’t actually as big as Android vs Android (or Windows vs Windows).

    • Flavio

      Indeed. Android OEMs are racing to the bottom. Apple is actually helping by not following suit.

  • Shellyman 4K

    Interesting.

  • Degus Jacoby Pradana

    Americaaaaaaa

  • Toukale

    Oh man, the hypocrisy on some of these comments is classic. It’s funny how lots of folks talks about competition and do not want a monopoly, but somehow they keep hoping/hating/rooting on the one company who does not have a monopoly to fail. Mainwhile they are rooting for the success of the two companies in monopoly positions (Google and Microsoft). We are indeed living in strange times.

    • JohnD

      Monopoly for Microsoft= Sure …… Monopoly for Google= Ehhhh kinda reaching….. There are a couple of search/ad based companies. People prefer Google over them, Google has just become cultural brand related to search. Like Apple to high class.

      • mobilemann

        in the US, and Europe, Google has a complete and total monopoly on search, and mostly ads. In Asia, i agree with your statement, but it’s by market.

      • smokebomb

        “Like Apple to high class.”

        High class? What exactly defines that? There are Android phones that cost just as much as an iPhone and offer much more in the way of functionality. I really hope Apple doesn’t become my only choice. I can’t stand their closed ecosystem and removable batteries and SD expansion make or break my purchasing decisions.

        • 404

          High class: what the cool people use, or if you’re even more insecure, what everybody uses. Also “Designed by Apple in California” attracts many people living outside the US, especially if they have the American Dream.

          • rmartinezdl

            Lol wut do you even know what class means? High class doesn’t mean having shot loads of money, there are drug dealers with millions of dollars and iphones plated in gold, I doubt that is high class, a Sony Xperia is high class, a 5 star restaurant is high class, not McDonald’s just because all the cool people go there and it sells millions. Learn the difference. Apple is the McDonald’s of the mobile industry. It sells lots and has advertising everywhere, yet it’s garbage.

          • JohnD

            And I thought Apple fan boys had a distorted reality ….Say what you you want the profits do not lie. And McDonald’s really…. they captured around 95% of the profits of the mobile industry with less than 15% market share …..if that is the same as McDonald’s then I have been been completely tricked. Whether you accept it or not ….Apple is still “known” as a high class brand….the only thing you fan boys picked out of that statement was Apple.

          • rmartinezdl

            Uhm you do know what profits mean right? It means that Apple makes the most out of each iphone compared to Sony, htc Samsung etc, and it’s obvious they sell phones that are at best $350 – $400 to make exaggerating, iphones are huge compared to other phones with bigger screens and smaller footprint, also iphones come with ridiculously low storage small batteries, low resolution screens, no micro SD support, no water resistance, not even quick charge, why do you think they don’t implement those things? Because that means cost, therefore reducing profit.

            Who’s the one with the distorted reality now. Sheep.

          • JohnD

            Uhhhh your still a sheep ….. you just proved my point …. remember your discussing high class and other phone like Sony Xperia being high class…. but Sony has been consecutively losing revenue in their mobile market ….I never discussed internals as high class…..one more really SLOW ….people “think” the iPhone is high class … and it has been represented around the world as such for a while ……it’s why people are willing to pay those absorbed prices for mid-tier phone specs you speak off….you can discuss it with yourself all you want this should not have been the point of this comment thread which is sad

          • rmartinezdl

            Just because Sony doesn’t sell a crapload of phones like the iPhone doesn’t make it low class or a worse phone, it just means it’s less known, hence proving my point of just because a 5 star restaurant has lower sales compared to McDonald’s doesn’t make McDonald’s automatically better, it makes it more profitable yes, aka apple it’s the most profitable company in the world not because the sell more phones or because they are better, but because they charge 3 times more and get away with that because people’s lack of information.

          • rmartinezdl

            It’s just like when Spanish conquered America, they gave the Mayan mirrors in exchange for gold, just because the Mayan accepted it didn’t make the mirrors more valuable than gold, so with the iPhone just because people pay $750 for a $300 phone doesn’t mean it’s actually better or even worth it, it only shows people are ignorant regarding what they are buying. No offense to you.

          • Adolph Oliver Bush

            No a sheep would be somebody who keeps buying laggy, BUGsted, feature dense/experience hollow devices over and over hoping for an update that will never come. What good are high end specs if the OS doesn’t even know how to use them properly?

          • 404

            Ah yes, i know class also means that. I agree, Xperia is classy, but famous people/rich people don’t commonly use it

    • Prasad

      Totally agreed. In fact Google was being investigated in every country for their misuse of monopoly in search… google fans can’t see all that…they just simply hate Apple

  • Peter

    Ahahah… Even with this news you still picture Android as the heaven for user and Apple as losing relevance… You prove, yet again, that you will write any bs and any nonse to make Android look good…. And the truth is, Android is not good for competition. Android doesn’t bring in profits for anybody other than Google. OEMs will bleed money until they die and only Nexus/iPhone will be left. What will you preach then? Blame Apple of course.

    • ChrisI

      Why? The Galaxy/Note lineup, G4, M9, Moto X Pure, Nexus, Priv……they all sell for $600+, too…..just like the iPhone. So why is Apple the only profitable enterprise if they only have 15% market share? Is this really moreso an advertisement that Apple squeezes its suppliers/vendors worse than WalMart, and that they literally use slave labor to manufacture/produce/assemble their product?

  • Pez Smith

    Too many Android phones are now so much like iPhone in term of no SD card, non-removal battery etc …
    LOL, there are Android phones with 4GB(eMMC) /1GB(RAM) with really poor screen etc… Even the Nexus 5X still has 16GB for £339.00, I wouldn’t call this cheap. Whereas the iPhone 6 16GB is £459. Ordinary buyers would buy the iPhone for the street cred & good cs provided by Apple. The Nexus provides neither!!!

    Outside of nerdoms, pounds for pounds there is no compelling reason to buy an Android phone over iPhone at the moment.
    How is it that Apple managed to make retailers have special section for Apple products in store & online? There are iPhone/iPad menu links and everything else goes into smartphones/tablets menu links. Those menu links also have Apple products at the top.

  • WorldStarrrrr

    When I read the comments section of this site I am legitimately afraid for this world. I observe comments regarding the accuracy of the numbers in the report and how they do not equal 100% although that literally was explained within the first paragraph. I also see people not fully understanding what this op-ed is actually stating regarding the article which I believed to be very clear. People – phones are getting cheaper. Phones are getting better. This benefits the Android ecosystem as a whole and in a very positive way. There will be OEMs that go out of business. Thats fine. Its called business. One commentator stated “Android is a joke” because OEMs are going out of business. How is that even an issue. Since when is paying less money for top quality a bad thing.
    On the other hand I believe the public has been programmed to believe and pay in excess of <$600 for a flagship hence the negative stereotype of budget phones. In summary people – get a grip. Yes Apple only sells premium products that people buy enmasse and makes huge profits. So not shocked. Enjoy the quality phones coming in 2016 that are cheap.

    • randy

      I think you are one of the very few who actually read and understood the post. I don’t know how some of these people figured out how to put food into their mouth in order to survive, let alone use a smartphone.

    • ChrisI

      Just to be clear: when competition is eliminated (or goes out of business) and corporate consolidations begin, historically speaking, products/services never become cheaper or are of a higher quality. Pretty soon, if all that’s left is Apple, Sammy, and maybe LG, you will not see races to build top quality for less money.

      • WorldStarrrrr

        I would say yes but because the market is still so vast and Android as a product is free the idea that there can still be competitors is plausible even with consolidations if they happen. Android is a product that doesn’t cost anything – its free – so there will in my opinion, always be competitors to challenge the big dogs and thats great. Apple is a niche product that appeals to a certain segment that doesnt mind high prices. Whos to say there wont be an equivalent company that is just as niche who wants to build premium products at an affordable cost.
        Linux is free but you got RedHat that works in numerous enterprises as an example. Or a variation of that BSD works as a firewall product or a router, etc.
        The point really im making is that Android is in a very advantageous position in that anyone can contribute and build a product. Consolidations not required.

        Slight edit. Article from today.
        http://www.androidauthority.com/samsung-budget-phones-to-get-premium-features-656382/

        Point right there being made. Flagship features being pushed downward to affordable phones. Everybody wins.

        • rmartinezdl

          Great and I thin there will always be an android manufacturer let it be Samsung or Huawei or whatever, and even then most android and even $200 androids like the Moto g best the iPhone in actual useful features.

          • WorldStarrrrr

            On that..we agree :)

          • Hung Solo

            I love how people who have never experienced an iPhone throw out some horse shit blanket statement like “android budget phones have more features then an iPhone” have you ever stopped to think maybe Apple has 95% of the profits because

            A. Their phones almost never crash (and even when they do a soft reset and they’re fixed)

            B. Ask an iPhone owner about what a boot loop is. Answer: WTF are you talking about?

            Ask an iPhone owner what memory leak is
            Answer: WTF are you talking about?

            Ask an iPhone owner about battery drain.
            Answer: oh you mean like when I’m using it?

            Now the best part… ask a person with a $1000 android flagship or a $10 budget android these questions and they’ll all know exactly what your referring too.
            Some android phones are undoubtedly really nice…android is shit no matter how much you spend. Period!

          • rmartinezdl

            WTF, you do realize apple has this market share of profits WHILE SELLING LESS PHONES than Samsung the biggest phone manufacturer I think, this doesn’t mean apple makes better phones, it means they make the most PROFIT PER PHONE, and how do you make more profit per phone? You barely change anything (pretty much no r&d) spend a chunk on marketing and pay reviewers, err I mean “advertise it”, rebrand it, hype it, sell it expensive, and voila, huge profits per phone.

            And for your Information, I’ve used the iPhone and the 6s plus 16gb for the record, it was absurdly huge for the screen size, I watched a few videos and while the screen was ok, it had a mono speaker on the bottom of the freaking phone, how am I supposed to enjoy media with that awful design also the bezels, omg that thing was enormous,and battery dean, uhm Google Facebook battery drain iphone, I couldn’t take it to the shower with me, I couldn’t transfer files between my tablet with nfc, the keyboard was horrible and the lack of customization is beyond forgiveness.

            I’m a Sony user with my daily driver being a z3 compact, but ive used a z2 so I know what a big phone is, nothing like the mammoth the iPhone 6s plus is with no justification, also I’m used to having 2 day battery, a 128gb micro SD, water resistance so I can take it to the shower and listen to music, I can wash it no problems, and the stereo speakers, I can’t even think of having a phone or tablet whiteout stereo speakers doesn’t matter if it’s android or iPhone, of course this are features you have no clue what they are because you have never used them, and probably will be very have until apple says you can have them, lol how sad that is.

            You can’t ask someone to understand what a Ferrari feels like if all they’ve used is a BMW and feel proud because it was “expensive”, just because I have $800 to spend on a phone doesn’t mean I will waste it without looking what I’m getting, that’s called IGNORANCE, ask any iphone user why they got an iphone, the have no single clue. Other than marketing. So yeah keep getting scammed.

      • rmartinezdl

        This is completely true, and it can be seen in the Intel vs amd cpu race, once amd stopped being competition for Intel, Intel has never come out with a cpu that amazes, let alone cheaper. Apple thinks they have no competition, and add to that the fact that their customers have no single clue of what makes a phone worth $700.

        • aaloo

          the worth or value of any object is subjective. to some people, drinking starbucks coffee is worth the premium. for others, drinking any coffee from outside is a rip off. a person defines value to individual objects. you don’t define worthiness for other people. you writing this comment was worth your time; for many others, that is likely not true. It doesn’t make anyone wrong or right.

    • coldspring22 .

      Fast forward 9 months later and what do we have? Android is on the surge again, with Apple iphone down to only 12% global market share!! As for the profits, the BIG question that’s not answered by this article is: What does Apple do with it’s huge profits? How does humongous Apple profit improve Apple’s competitiveness? Why nothing at all – all that cash simply goes to the bank and sit there! Why is android OEM profit so small, even when it sells $600 phones? It’s because huge expenditure on R&D by Android OEMs, which Apple does not do. So raw profit is just one part of the picture. As long as major Android OEMs like Samsung, Huawei, Lenovo, Vivo, Xiaomi, Oppo, LG, Sony, HTC, Oneplus etc etc remain competitive and vibrant, there is nothing to worry about. Indeed it’s Apple who is staring down at bottomless abyss of single digit market share and endless attrition by Android domination for the foreseeable future.

  • hoggleboggle

    Utter bulls hit by a company with obvious alterior motives. A astonishingly bad case of cooking the figures

    • abazigal

      Even if the article is false, the truth likely isn’t too far off anyways.

      • hoggleboggle

        I have no doubt that apple’s profits than any of their competitors, but the truth is probably closer to 50% of the total profit once you take all manufacturers into account, including Google and their profits seeing as apple’s profits include all the services that Google make money on.

  • charlie Jason

    Yes cheap and powerful phones are great for us consumers. But if an industry is not making much profit, it WILL have a hard time coming up with budget to innovate.
    1. Android phone makers lose money.
    2. They are not able to put expensive parts in their phones.
    3. Companies like Qualcomm make less money and thus have less budget for R&D.
    4. Less innovation for the Android industry in general.
    5. Apple’s products suddenly become technologically superior.
    This may not happen of course as I am just speculating. But when you really think about it, this definitely is a possibility.

    • ChrisI

      “1. Android phone makers lose money.”
      Why? The Galaxy/Note lineup, G4, M9, Moto X Pure, Nexus, Priv……they all sell for $600+, too. Just like the iPhone…..so why is Apple the only profitable enterprise if they only have 15% market share? Is this really moreso an advertisement that Apple squeezes its suppliers/vendors worse than WalMart, and that they literally use slave labor to manufacture/produce/assemble their product?

      • charlie Jason

        Moto x and Nexus selling for $600+? cool story bruh
        Besides, this article clearly shows Android makers losing money/ not making profit

        • ChrisI

          I’m asking a question. I’m trying to understand why only Apple makes a profit when phones are similarly priced. You cherry-picked only the Nexus and Moto X (even then the 6P 128gb is $600+, but I was wrong on Moto X Pure)….the S6/Note variants are easily $600+, the G4 was $600+, Windows Lumia 950 are $600+, the Priv is $600+, the M9 was $600+, the new Xperia line is way way higher than $600……

          So calm down, first off. Seriously, I’m just trying to figure out why Apple is the only company to make a profit….

          • charlie Jason

            Alright bruh, I am calmed down now.

            Firstly, Most Android smartphones are much cheaper than iPhones. Nexus 6P starts at $499 for the 32GB version; Nexus 5X starts at $379; Moto X starts at $399. These are actually already on the more expensive side, as the average selling price of Android phones is much lower than these phones. Most people in developing countries who want a smartphone are buying ones that cost $100-$200, sometimes even less.

            Secondly, have you noticed that Android makers are hardly making any money from software? Chrome, Maps, Play Store, search, these services are making profit for Google. Apple makes tons of money from App Store and iTunes every year.

            What about actual profit? The average selling price of iPhones is $687, compared to the $254 of Android phones. So does that mean that Apple makes 2.7 times as much profit on each phone sold than Android makers? No. They make more than just 2.7 times more. Since almost all phones typically cost around $150-$200 to make, a $250 android phone is making $50ish per phone, whereas iPhones are making $487 per phone. Once your price gets higher than the unit cost of each phone, every bit of price increase brings you pure profit.

            Hey wait, $50 per phone doesn’t sound all that bad for Android makers right? Well that didn’t take into account of patent fees, research and design costs, employee wage, transportation costs, advertising, software updates, and customer support. These things all cost a lot. And at the end of the day, even Apple, with its seemingly lucrative selling price, only has a profit margin of 37%. I will leave it to your imagination to figure out how things are going for the Android makers, and why Android is only making 5% of the industry’s profit.

          • Loogle

            Well they did sell 70m iPhone 6 in three months… Sales numbers probably help…a lot!

      • Prasad

        Apple and competition all literally make their phones in China. They break deals based on the business they provide. Unlike Apple no other competitor listed supplier guidelines and audits…but good try to make some hate towards Apple…

        in other words…

        Apple is so efficient – it can make a competent product with much less cost…and people are ready to spend money if they feel there is a value…

        But lets blame Apple and its customers for Android not making enough money…

        • ChrisI

          good try to make some hate towards Apple?
          I’m asking a basic question. But you’ve confirmed my suspicion though with your analysis, that Apple does a better (?) job at squeezing its suppliers and vendors (identical to what WalMart does), and likely employs near-slave labor to product its product. Thus, profit margins are substantially higher.

          • Prasad

            again you are spinning the samething. Yes they may get better deals from suppliers but they have much much better auditing and policing on supplier working conditions…where as competition has not even talked or declared about their suppliers.

            The main point I was bringing is that the Apple’s efficiency in making a competent product with much less cost… for your reference I mentioned iPhones are beating Android counterparts with 30% hardware capacity…

            I know you dont understand all this – because you dont want to…

          • ChrisI

            “Yes they may get better deals from suppliers but they have much much better auditing and policing on supplier working conditions…where as competition has not even talked or declared about their suppliers.”

            This has nothing to do with the article, its findings, or what I’m asking. Also, it clearly sounds like you’re unfamiliar with reports from FoxConn.

            “The main point I was bringing is that the Apple’s efficiency in making a competent product with much less cost”

            You provide zero evidence to support this, you just make a statement. This is essentially my question though, is prove this statement.

          • Prasad

            Go and check.apple. website for their auditing and policing of their suppliers. And also check competitors websites as well. Almost everyday there is a report someone died in Samsung factory….but i know u care about apple only.

            First try to think from.both sides of argument…

          • ChrisI

            I would rely on info straight from Apple just as I would Walmart or The Gap.

          • Prasad

            There are reports people suffering in Samsung factories. Even ex-employees remembering how pathetic conditions are.

            and they dont even bother to give info… or mention their suppliers…

            very well unbiased comparison with Apple. If you have this much hate then I dont think you can think objectively…

          • ChrisI
          • Prasad

            So your point is?
            I never said Apple is 100% perfect but they are miles ahead as competition dont even list what they do for supplies and how they do auditing.

            By the way Samsung not even caring for people in their own factories where as Apple taking extreme steps to better conditions in supplier factories (not their own)

            And only one artile is from 2015. Dont blindly google search and post. Read them. Also search for samsung own factory conditions. Dont bring your apple hate in searching be objective and think both sides.

          • ChrisI

            My point is both Apple and Samsung (and therefore likely HTC, LG, Moto, etc) all use these Chinese factories thathave deplorable working conditions and near-slave labor demands. So you have yet to answer my question since you keep arguing with me: why is it that Apple is the only smartphone company to make a profit?
            And you only accept truth from articles written in 2015?

          • Prasad

            Apple is profitable because they are efficient – they make use of hardware resources very well…thats why their dual core processors are outperforming Android octa core processors. They control end-to-end so they can make products which use less power and can outperform current Android flagships. it is a simple logic and I know you wont understand because for you – if Specs sheet is full then the product is automatically good.

          • ChrisI

            Apple is profitable because their dual core processors are outperforming Android octa core processors and they can make products which use less power and can outperform current Android flagships? You understand nothing about economics. Those responses have nothing whatsoever to do with why a company makes a profit. I’m done here. Cheers!

          • Prasad

            Haha. Using lower power hardware is always profitable. Also creating lower number of models Will save a lot of human resources in designing and supporting

  • UstillUseAniPhone?

    I dont feel sorry for several OEMs. Theyve been so out of the loop with what consumers want. Samsung has missed several huge major opportunities.

  • The-Sailor-Man

    Only Apple , AA and all other US media care about Apple’s profit.
    We the consumers care more about having the best phones in the world, for reasonable price.
    And we do have A line, S line, and Note line. Couldn’t be more happy. Poor ppl have even great Tizen phones .
    And Samsung is the OEM selling the most smartphones in the world, with THE BEST NEW TECH available. And the only OEM that made Android top dog. Right?
    We know that makes AA the other tech media sad, but we can’t help it.

    • Mozukortick

      stop drugs.

    • Prasad

      Ironically Samsung is not able to sell the so called best tech…they are selling more low end phones as evident from their Quarterly results…. so understand there is a different world which Samsung dont want to declare to public…Enjoy your Samsung products…

  • Android Developer

    How come some companies are below the line? If they don’t get profits, they aren’t supposed to be on the graph, or stay on 0.
    A minus for a profit is really weird here, as it’s supposed to be a part of the 100% .

    • Kristian Robertsen

      Literally the first paragraph of the article, dude.

      • Android Developer

        You mean this: “due to these two companies making profits at the expense of other companies such as LG or BlackBerry” ?
        But how could it be? What does it mean it’s at the expense of them?

  • ChrisI

    Can anyone explain in layman’s terms what “smartphone profits” are, how they’re defined? Sammy, LG, HTC, BB and Motorola phones still sell for $600+ which is no different than the iPhone, so I’m missing something here. Are the “profits” (relative to the article) only about the physical smartphone sale, or does it factor in things like app sales?

    With only 15% product market share, and competitor phones selling for very similar prices, I don’t see how Apple is practically the only “profitable” company?

    • Sherpa

      While Android dominates the overall market share, individually, Android phone manufacturers sell fewer phones than Apple. Their profit is split between the number of handsets they sell individually. Apple can enjoy all the profit by themselves since they are the only one making iPhone. Does that help?

      • ChrisI

        I was reading a similar article based off the same Canaccord report that unit sales of Android phones far surpassed those of the iPhone. So it basically tells me that Apple is treating is vendors/suppliers like Walmart does theirs, or their product is simply straight-up overpriced and allows for a massive profit margin.

    • Prasad

      Its simple to understand – Apple is using the resources efficiently and able to make a competent product with much less cost…
      Take any tests even biased ones…iPhone will be in top 3 with practically three year old hardware. If you consider the cool factor then people are ready to pay luxury price for iPhones. Also they hold value for a long time because of software and support.

      Its a plan well executed by Apple…others can’t because they dont have a full control of system.

      • Loogle

        Well said, though I’d replace “3 year old hardware” with “tried and true hardware” but technically…your right:P

        • Prasad

          Totally agreed. There is no measure for hardware. If iPhone with half the specs can beat most android flagships then there is no point in discussing hardware capabilities. Android is like windows for mobiles…all services will be running whether you want or not…and probably less efficient because of virtual machines and fragmentation… anyways poor people need something right?

  • TJ

    I never understood the love affair with fisher price devices.

  • TJ

    Aren’t they still hiding billions offshore to avoid paying taxes? Once the gay and hipster movement dies off, so will apple. I’m sure that’s their target demographic, or probably children. Same thing.

    • Hung Solo

      Until Google can make something that actually works for more than a month, I don’t think Apple has much to worry about.

    • Scr-U-gle

      Hipsters and gays?

      Someone is very angry that he is so out with of step with the real world. (And come out the closet, you’ll be less angry and have a better life.)

      Just like android before it copied iOS, you are so 90’s.

  • aaloo

    lol. wow, what crap reasoning. Do you think apple is the only company releasing their phones in more and more markets every year. do you think all the android OEMs are strategically narrowing the markets they sell their phones in. they are also selling in more markets and lower prices, but ultimately people choose apple’s devices once they can afford it.

    apple has never been about market share. that will come on its own when they build a great phone and an ecosystem around it. android phones get released into market and forgotten. how many phones have marshmallow installed on them. Compare that to the latest version of iOS.

    You are delusional if you think consumers are not winning by buying apple products. apple’s dominance is good for both apple’s customers and non-customers. it will weed out companies who are in it for making short term gains and don’t devote anything to customers after selling them the product.

    carry on. publish the next article about how iPhone 6s production has been cut down.

  • Terroantula

    Those maths don’t work out….

  • Goblin Shark

    The sad fact is if you give away an OS to anyone who wants it, there’s no value to anyone except Google. OEMs are going to have to develop their own OS or leave the market. Google isn’t a charity and Samsung & LG won’t want to donate to them forever. It’s highly likely that in a few years only Mickey Mouse outfits like OnePlus will be making Android phones.