Posted on 01/31/2011 10:43:14 PM PST by Swordmaker
With just 4.2 percent of the global mobile phone market, Apple's iPhone accounts for a massive 51 percent of the total profits, a new report claims.
Apple continues to dominate the market when profit is measured, according to a new report from Asymco's Horace Dediu. The iPhone maker managed to add one percent to last quarter's 50 percent share of profits from the top eight mobile phone vendors in the December quarter, the report noted.
After data for the fourth quarter of 2010 was released last week, Apple placed fifth overall among global cell phone makers with 4 percent market share. Meanwhile, research firm Canalys published a report Monday showing that Google overtook Nokia as the top smartphone platform maker in the fourth quarter.
Apple revealed earlier this month that it sold 16.24 million iPhones in its first quarter of fiscal 2011, resulting in $10.5 billion of revenue for the company. Additionally, the average selling price of the iPhone increased from approximately $610 in the previous quarter to $625.
The Cupertino, Calif., company hit a major milestone in the December quarter when it passed Nokia to become the world's largest mobile phone vendor in terms of revenue.
The iPhone's share of global handset profits has been steadily climbing. In August of 2009, Apple was reported as making 32 percent of the industry's profits.
iPhone profits could continue to soar as Apple adds the new CDMA iPhone 4 to its lineup. According to Apple's Chief Operating Officer Tim Cook, the launch of the iPhone 4 on the Verizon network will not adversely affect the iPhone's ASP and profit margins. After being speculated for years, the iPhone will come to the nation's largest carrier on Feb. 10.
Verizon is conservatively projecting sales of 11 million iPhones in 2011, but executives have said that the handset could help the company's growth "really explode over the next several years." According to a recent analyst survey, Verizon could see as many as 25 million new iPhone subscribers this year.
From a technical perspective, why is that important?
Because a company needs to pay a salary to their engineers.
As I understand "profit", that's what they have left over after expenses, which includes paying their engineers.
I don't believe I have ever seen profit per unit used as a metric for gauging anything other than a companies marketing and cost containment capabilities.
In assesing the technical quality of computers and related peripherals, I have never seen that submitted as an objective measure of the quality of the product.
The word quality covers many areas: hardware, software, user interface, design. And then there is the quality of the user experience. And if you have ever been to an Apple store, there is the quality of the sales and support people. All of those areas contribute to the quality of a product.
That does absolutely nothing to explain the rationale for using per unit profit as a measure of quality. It sounded like a commercial.
I am beginning to think that you are simply trying to bait me. I never said anything about the price per unit as a measure of quality. I said one of the reasons they can make more per unit is because of the quality of the product. People are willing to pay for quality products.
I have never see that used as a metric for gauging the quality of a product.
I haven't seen price as a metric for gauging the quality of a product either. We agree. People gauge a product on how it meets their needs. User satisfaction is a big part of the success of a company. I produce a product of good quality, and then I service that product to my customers with a high quality of service. They is how I build customer loyalty. It's really very simply. People will pay for a high quality of product and service.
I agree with that. That the profit per unit is an indication of that is counterintuitive. It is always more costly to produce a higher quality product than one of lower quality, and it is more expensive to provide the staff, training and infrastructure to provide a higher level of service.
Are the profits that Apple is reporting a result of the retail sale of their product, and the profits that are being attributed to the other vendors only from the sale of those phones to the distributors?
If that is the case, then all of the profit made by the distributors and retail shops that then re-sell those phones is not being counted toward the profits being made by the products of those vendors, and is only being reported for Apple.
Yes, they have retail stores as well as sales online. But AT&T also sells the iPhone in their stores. And of course Verizon is now too. (Bust Buy sells Mac, iPad, etc.)
The other vendors that it's being compared to, to my knowlege do not. The sell their products at wholesale to distributors, who then sell them to retail vendors. At each step in that chain, someone is making a profit.
That may be. But then this arrangement is part of Apple's success. They have had retail stores for as long as I can remember.
Are the profits that Apple is reporting a result of the retail sale of their product, and the profits that are being attributed to the other vendors only from the sale of those phones to the distributors?
Profit is profit wherever it comes from.
If that is the case, then all of the profit made by the distributors and retail shops that then re-sell those phones is not being counted toward the profits being made by the products of those vendors, and is only being reported for Apple.
That is the why the wholesale and retail trade works. I used to sell wholesale. Then I eliminated the middleman. Guess what? I made more money. Of course I had to spend more time generating sales, and my expenses when up. But it was worth it. Sometimes you have to spend money to make money.
If that is the case, then all of the profit made by the distributors and retail shops that then re-sell those phones is not being counted toward the profits being made by the products of those vendors, and is only being reported for Apple.
Profit is profit. If Samsung wants to eliminate the middle man, they are free to do that. This is part of Apple's success. As you see, Apple is a unique company.
Now I understand the scam that’s being played out here. I’ll not buy anything from people who think this kind of lies is the way to gain people’s trust, and I’ll actively discourage anyone I know from doing it also. <p<I’m done with it.
Good-bye. Have fun.
Good-bye. It won’t be fun, but I really hate geing jerked around like that. I realize the only thing I can do about it is make sure it turns out to be as counter productive as possible, and I can and will do that.
Do you know where the iPhone profit numbers come from? To my knowledge, Apple - unlike many tech companies - does not break out its profit numbers by product line.
They do break it out... check their 10-K and 10-Q reports.
It also means that they're in trouble because the only way they can maintain market share is by cannibalizing their profitability. The example of Ford is a good one. At one time the Model T utterly dominated the market. Then, as competitors emerged, Ford was forced to cut the price time and again. In 1908, a T cost $850 and they were selling like hotcakes. By 1927 they were priced at $290 and Ford couldn't give 'em away. Almost destroyed the company until they finally decided to shut down the T production and completely revamp all of their plants to produce the Model A.. It also created the image of Ford as inferior to GM that has persisted to the present day.
Looking at Nokia's stock is also instructive. They peaked at almost $40 a share in October, 2007. You can buy it today for a couple of cents over 8 bucks. So investors aren't seeing a healthy company, either.
Maybe at the end of the day, Nokia's are a better buy. I'm sure that Studebakers were a great buy before they went under, too.
Only sales by product line and geography are broken out. Profit numbers aren't - either by product line or geography. Here's the latest 10-K: http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?dcn=0001193125-10-238044
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