Tech
Apple is making an insane amount of money from iPhone sales
It may not sell the most phones, but it makes two-thirds of the profits on them.
Apple earns 32 percent of total smartphone revenue and 66 percent of total profits, according to a new estimate from Counterpoint Research. Its nearest rival? Samsung, in “a distant second” with 17 percent of profits.
First choice for the developed world — Apple’s dominance and ongoing ability to sell some of the industry’s priciest handsets year after year comes from its massive popularity in markets like the U.S., Europe, and Japan.
Overall, profits declined — In the third quarter of 2019, overall global handset profits declined 11 percent year-over-year. Counterpoint says that’s due to consumers upgrading less often and an increase in compelling entry- and mid-level products. Of the top 10 brands, only Samsung and Huawei grew their annual revenue.
Chinese expansion — According to the research, Chinese smartphone brands tend to “operate at low-profit margins”, but nonetheless did better than in previous years because “they are expanding outside China and also penetrating high-tier price bands” by offering compelling options to “mature smartphone users with new feature-packed flagships at affordable prices.”
Future revenue growth could come from the financial services and Internet-of-things products many of China’s smartphone players have in the works. Apple, of course, offers financial services already, albeit only in select markets. Regardless, with such a lead over its rivals, Apple’s not going to be overtaken anytime soon.
