Global smartphone profits – Apple continues to dominate

Although Apple does not ship more phones than anyone else, a new report today shows that it still takes home most of the global smartphone profits – even before the launch of the iPhone 13.

In the second quarter of the year, iPhones accounted for only 13% of global shipments, but that’s a whole different story when it comes to revenue and profits …

Counterpoint says iPhones accounted for 40% of global smartphone revenue and 75% of profits.

Apple has been the biggest profit and revenue generator in the handset business. In Q2 2021, it achieved 75% of the total operating profit in the handset market and 40% of revenue despite contributing a relatively moderate 13% to global handset shipments.

Although this performance shows the strength of the Apple brand, it is still lower than the peak in Q4 2020, when its revenue share reached a staggering 50%, up from 28% in Q3 2020, and its profit share reached an unprecedented 86%, up from 51% in the previous quarter. Although there was a significant jump in its shipping share, from 9% to 17% in the same period, the volume of revenue share reflects the success of its first 5G-enabled iPhone series.

The market intelligence firm says consumers are more interested than ever in Apple’s ecosystem.

Apple also benefits from interoperability between its devices. The convenience of switching between a Mac, iPad and an iPhone encourages users of an Apple device to stay within Apple’s ecosystem by acquiring other of the brand’s devices. This is made possible by Apple’s significant control over both hardware and software, enabling a seamless shift of work on an app between multiple devices.

Although this has been the case for some time, it has become particularly marked with the stickiness of music, media, news, storage, etc. Apple is likely to keep this edge so that it can continue to charge premium prices for its handsets and thus maintain high operating profit margins.

Apple’s profitability reflects the fact that it only sells premium devices, while many Android brands sell handsets at a range of price points, some of which are almost unprofitable or even lose money. The company noted last month that Apple had a share of 57% of the smartphone market of $ 400+.

When it comes to the remaining 25% of profits, Samsung accounts for the majority of them, while other brands had a negligible profit – even Xiaomi, which ships more phones (and occasionally watches) than Apple.

Photo: Gnustang / Unsplash

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