Apple continues to dominate with massive 86% share of handset industry profits

Apple Insider ^ | November 4, 2014 | By Neil Hughes

[Swordmaker]

A new analysis of third-quarter handset industry operating profits estimates that Apple accounted for a massive 86 percent share, blowing away the competition as rivals such as Samsung saw their profit levels dip.

Analyst Michael Walkley of Canaccord Genuity issued a note to investors on Tuesday, a copy of which was provided to AppleInsider, in which he revealed his latest research, based on company reports and estimates. Walkely said that Apple's estimated 86 percent share of industry profits was simply "remarkable."

Apple's gains came at the cost of competitors, most notably Samsung, which was estimated to have accounted for just 18 percent of the industry's profits. That's the lowest total for Samsung since 2011, Walkley said.

Still, Apple and Samsung combined for more than 100 percent of the industry's total profits, because competitors such as Motorola and Microsoft actually lost share. In fact, other than Apple and Samsung, the only other company to have a positive value share in the September quarter was LG with 2 percent, according to Walkley.

HTC and BlackBerry are estimated to have accounted for 0 percent share in the quarter, essentially breaking even. And Motorola with an estimated mobile operating loss of $185 million is said to have accounted for -2 percent, while Microsoft's $341 million estimated lost in handsets gave it -4 percent of the industry's profit value share.

In all, Walkley estimates that the handset industry saw operating income drop 17.3 percent year over year. The analyst did note that the increasing popularity of Chinese smartphone makers are not included in his estimates, due to a lack of available data on sales and profits.

Walkley also conducted a series of surveys in October in the U.S. which revealed that the iPhone 6 and iPhone 6 Plus were by far the top selling smartphones at all four major American carriers. The survey also found that users are gravitating toward higher-capacity iPhone models, which he believes will bode well for the device's average selling price in the current December quarter.

"We believe Apple is experiencing a record iPhone 6 upgrade cycle due to very strong replacement sales as well as from high-tier smartphone market share gains from Android," he said. "We believe these trends should result in very strong (fourth quarter of calendar 2014) smartphone sales and share gains for Apple.

Canaccord Genuity has maintained its $120 price target and "buy" rating for AAPL stock.

[FredZarguna]

So you believe Apple’s “out and proud” CEO is going to be sending his megagazillions to initiatives for conservative causes then, right?

[Swordmaker]

Android has something like an 83% market share to crApple’s ~13%. Besides, their products are WAY overpriced and lack features that were standard on Droid phones two years ago. Samsung and Droid have lapped them about five times in the past two years. crApple is no longer a visionary, or trendsetter, but merely a follower. And my Note 3 is STILL a quarter-inch bigger than their “biggest” iThing.

Sorry, slightly bigger screens are not necessarily the "biggest thing." Now that Apple has its own bigger screens, Samsung is finding itself in a world of hurt as those who've settled for iPhone wannabes are buying the real thing.

Please show me an Android phone with 64 bit processors AND a 64 bit operating system that is actually working in its second generation.

Sorry, I didn't catch that? What? Where? There are no working 64 bit Android phones because they are all 32 bit. . . and some 64 bit processors still running 32 bit operating systems.

No, they have not "lapped" iPhones even once. Where are the Android phones with anything close to the security of ApplePay? Google Wallet doesn't count. . . Google is just acting as a third party credit card processor stepping in-between the merchant and his contracted card processor. That is not the same thing. No way close. Apple does not interfere with the merchant's contractual obligations with his card processor. . . and merely enhances the transaction.

How about Handoff? Family Share? Zero malware? Anything close? Crickets.

How about a truly secure system that does not keep its passwords in a hidden clear text file on the phone making the phone easy to hack. . . yes, that is what Samsung and Google's vaunted Knox security was found to be doing. LOL! Apple's iPhone does not do that and keeps its security in a hash that is not crackable.

A list of kitchen sink additions is not "lapping" but loading capabilities that no one will ever use on to the phone that will eat power. For example, who will ever use the Samsung Galaxy Note 4's Spo₂ sensor? Yeah, a blood oximeter is cool, but aside from a surgeon, an EMT, or a dentist, WHO needs one? Are you gonna tape a big honking phone to your index finger to monitor your blood oxygen level, while undergoing anesthesia? That is about all it can be used for. . . aside from diagnosis of sleep apnea, and other breathing problems. . . and they all essentially require long term monitoring. . . with a phablet? Right, sure? Same with the heartbeat monitor. That one works exactly the same as an APP that has been available for the iPhone for five years. Whoop-De-Doo. It took Samsung this long to build it into their phone as a spec. . . but why?

I laughed when I read the included gadgets on the Ransom Note 4.

You really do not know what you are talking about.

[Swordmaker]

False

Prices quoted are as of this moment. i just looked them up. Sorry. True.

[itsahoot]

Why would anyone buy the IPhone 6 when the much better rated Galaxy Note 4 sells for less?

Why indeed, mystery of the ages. Maybe someone here can figure it out, just not you.

[FredZarguna]

Headline translation:

Apple Makes 86% of Smartphone Profits with 11% Market Share. Fanbois Apparently Can't Do Math; Still See 'Great Value.'

[Everyone who knows anything about computers is laughing their @sses off at the clueless irony of your post.]

[angry elephant]

No, I don’t think that. As a Washingtonian, though, I am fed up with the Microsoft millionaires having so much control over this state. Gates, Balmer, Delbenio, harvesting money from the whole world and basically attacking their citizenry here in the state with their money and their belief that they are so smart because they are rich.

[cmsgop]

Buy MSFT they said...

AAPL is stupid they said...

AAll the wayyyyyyyyyyy to the BANK!!!

[itsahoot]

Sorry. Not a fan!

No but you play loose with the truth. You can run Linux on any intel Mac as well as Windows, but an expert like yourself already knows that right?

[FredZarguna]

What’s false is that it’s been reviewed as superior. You need to get off the fanboi pages. The industry reviews are not trending your way, and customers have voted with their feet. Check your market share. You’re going to settle in somewhere below 10% long-term. iEvil hasn’t had any new technology for literally years. All you’ve got is teenyboppers and a few males of very dubious sexual identification. That’s pretty much the long term prognosis.

[FredZarguna]

"Apple Linux/Windows Emulation: When Performance absolutely, postively does not matter."

[itsahoot]

"There's nothing wrong with that. If you don't like it, don't have an iPhone."

Yet here you are on a thread that has zero interest for you.

[minnesota_bound]

I bought a LG G3 on Ebay in October for $384
5.5” phone that does not have all the extra apps that my Samsung Galaxy S4 had by default plus I can easily root it to add different themes if I want. Battery life is really great. It stays at 100% 12/hrs later or more when not in use where the Galaxy S4 would have drained way down.
http://www.phonearena.com/phones/compare/LG-G3,Apple-iPhone-6/phones/8347,8346

I too have Apple stock so I hope Apple makes lots of money using child labor in China : )

It keeps them kids out of mischief.

[FredZarguna]

Please have your mommy read you the rest of the post, or have your cognitive therapist help you with your reading comprehension problems.

Clearly I do care about Apple's evil policies, and clearly I do have a financial interest in trying to drive Apple's market share as low as possible.

I thought Jim Robinson said FR would never accept advertising. Yet night after night I watch bandwidth and cycles robbed by Swordmaker and other Apple bootlickers posting unpaid advertising on behalf of GayCo. If I had no other interest in trashing your pathetic fanboi threads, that alone would be enough to bring me here.

[Swordmaker]

Exactly. I was forced to use a crApple computer at one of the places I was contracting. HATED that proprietary playskool computer! Couldn't wait to get back to my Linux and Windows machines where I could hack the hell out of and do what *I* want with it!

The only thing you have proved is your ignorance. You were given access to a powerful UNIX™ computer and you did not even know it. You decided in your ignorance that it was a "Playskool" Toy. How absurd. My Apple Mac runs TWO instances of Linux, Three different versions of Windows (XP, 7, and 8.1), all in sandboxes under OS X.10 Yosemite, and you don't have a clue about the power you had in your hands.

You were a couple keystrokes away from a UNIX™ Terminal that would give you the complete control over that Mac, capable of doing everything you could do and more, that you could do with your itty-bitty Linux ripped off copy of UNIX™. There are only four certified POSIX compliant registered and trademarked UNIX™ Operating Systems and the best selling one is Apple Mac OS X. THAT is what you had your hands on. . . and you described it as a "TOY." That makes you an idiot.

Then you go on to insult Mac users. Would you insult THESE Mac users, who have personally selected, and purchased these Mac computers, which is THEIR computer of choice because it is their "toy?" and overpriced because they love toys and paying too much, or perhaps, is it possible, they selected it because it is a powerful useful, scientific and engineering tool, the best tool for the job they do? I think they are smart enough to buy if for the latter reason. They are, I think, a LOT SMARTER THAN YOU!

NASA's Jet Propulsion Labs Mars Curiosity Rover Design and Landing Team
Gosh, RocketMan1, I see only two Windows PC computers in the entire room.


Let's look closer to be sure. Yup, those are MacBook Pro Notebook computers. . .
Oh, my gosh. Why do you suppose these NASA engineers are using "PlaySkool Computers?"


Just so you don't think these Macs are running Linux or Windows, you can see they are Running OS X.

I suppose, you think these Mac users, like me, can "barely plug in and turn on a computer on their own."

Me? I've owned and operated a cross platform computer consulting business for over 35 years. . . and know what I am talking about. . . and any one one who refers to Apple products as crApple, clearly does not. You are simply someone who is inexperienced with quality.

[Swordmaker]

Then again .. I still have a fondness for DOS and UNIX commands, so ..

And you say Apple Mac users are clueless. . . SHEESH!!!!

Recognize it? It's a TERMINAL. . . fully functional terminal to control a UNIX Mac.
It has DOS like and UNIX™ commands. All of them.

[Swordmaker]

The development toolchain is crap [state of the art for, like, 1987] and the cut Apple takes out of your net is disgusting.

Not according to the other developers I know. They say it is far easier to develop on iPhones and iPads than on other the platform. You are throwing FUD. Apple provides many things already programed for the developers to use that have to be programed by the developers on other platforms. Again, you don't know what you are talking about.

How's this for evil: you want to develop an app to be used by you and only you, on your own phone? You must pay $100. Oh, plus $99 for the developer program. Or maybe $299 if you're a corporate developer. Or maybe, even more if your corporation provides your phone, in that case you must be bound to their B2B program for putting an app on your own phone. Oh yes, and by the way, you may not develop this app on anything but a Mac. Even a virtual machine running OSX will violate your developers agreement. If you criticize Apple for making you do that? It also violates your developer's agreement.

Apple keeps control of what is developed. It keeps the junk down and enhances the security of the entire ecosystem. You don't like it? Don't develop for Apple. The prices you cited are small potatoes. Chickenfeed. If you want to develop outside of Apple's App store go for it. But you can only sell to people who have Jailbroken their iDevices. There are a lot out there. So AGAIN you are spouting FUD.

Essentially, if you develop for iOS, you become Apple's cubicle slave. If your software company develops for iPhone, they become a subsidiary of Apple.

MORE FALSEHOODS. A subsidiary of Apple means a wholly owned company. That could not possibly be true. MORE FUD.

Apple charges 30% of the sales price of things sold through their App store for the services they render. If you were to sell in normal channels the BEST you'd be able to do is sell your product for maybe 50% of the retail, which is what the standard mark-up used to be, if that. If you sold it to jobbers, then you'd be selling it for even less. YOU'D be responsible for sales, advertising, shipping, delivery, etc. Instead, Apple is. For that Apple covers it all for a mere 30%, not 50%. You REALLY don't know what you are talking about.

You don't like the money you are making? Raise your price. Response from the fanbois: "There's nothing wrong with that. If you don't like it, don't have an iPhone." OK, that's just one of the many, many reasons that I don't.

You claim to be a developer on iPhones but you don't own an iPhone. . . and you obviously do not own any Apple Macs. So, more falsehoods.

YOU obviously suffer from MAPS.

Swordmaker's and Kathy's proposed diagnosis for the new ICD-10 addenda:

90210 iOS Munchausen's Apple-Plexy Syndrome (MAPS), The overwhelming compulsion to post negative, judgmental, aggressive, and false commentary on any website thread related to Apple products wherever found, including phobic reaction to projected Apple user euphoria. First and subsequent encounters.

[Swordmaker]

Apple Makes 86% of Smartphone Profits with 11% Market Share. Fanbois Apparently Can't Do Math; Still See 'Great Value.'
,br> [Everyone who knows anything about computers is laughing their @sses off at the clueless irony of your post.]

Some people cannot understand simple economics. Market Share is a chimera. . . chasing market share into bankruptcy is what caused Dell to almost reach bankruptcy and what is destroying much of the rest of the PC industry and is working to destroy the other Cellular Phone manufacturers. Selling more and more at a loss does not translate into success. Ask Motorola, Nokia, RIMM (Blackberry), HTC, and a host of others who are circling the drain. Apple is taking home the bacon because they simply refuse to play in the bargain basement. They build premium quality phones and keep it there.

In the chart, Dediu plotted three important groups of data. The first, in green, is Apple’s total share of the global cell phone market each quarter by shipment volume. While Apple’s share has grown pretty steadily over the years, it’s still barely 10%.

Next, in pink, is Apple’s share of total mobile phone revenue around the world. Here, we can see that Apple’s share of global cell phone sales sat at about 35% in the most recent quarter.

Finally, and most impressively, is Apple’s share of global mobile phone industry profit. Despite accounting for just 10% of phone sales, Apple pulls in between 60% and 70% of all phone industry profit thanks to its sky-high margins that rivals can’t even dream of approaching.—Boy Genius Report "One simple chart shows how severely Apple’s iPhone is crushing the competition" 03/17/2014

That report above was as of the end of 2013 and it's only gotten worse for the competition since then. . . with Apple getting a greater Market Share and a bigger profit share. In the United States, Apple's installed user base share is sitting just below 47%. Most of the Android phones in the world are inexpensive non-smartphones.

Most of the people on FR who know me, know i am anything but clueless. In fact, it is YOU who are clueless, especially about economics and Capitalism.

[Swordmaker]

What’s false is that it’s been reviewed as superior. You need to get off the fanboi pages. The industry reviews are not trending your way, and customers have voted with their feet. Check your market share. You’re going to settle in somewhere below 10% long-term. iEvil hasn’t had any new technology for literally years. All you’ve got is teenyboppers and a few males of very dubious sexual identification. That’s pretty much the long term prognosis.

Oh? OK... Well Definitely not all reviews are saying the Samsung Galaxy Ransom Note 4 is the best. . . except on Android centric sites:

Design

Samsung has made minor tweaks to the Galaxy Note 4's design, swapping the chintzy plastic frame for a metal one and giving the faux leather backplate a softer feel. Compared with the iPhone 6 Plus, however, it looks embarrassingly old-fashioned. The iPhone 6 Plus is truly a thing of beauty, offering a smooth, continuous form that seamlessly transitions between the glass screen and anodised aluminium body. . .

Verdict

Based on these four key categories, the iPhone 6 Plus wins by a small margin. . . —Sydney Morning Herald, 09/11/2014"Apple iPhone 6 Plus v Samsung Galaxy Note 4,"

And then when you look at actual phone comparison sites that are agnostic, the story is different. Consider the unbiased PhoneRocket.com's review of the Galaxy Note 4, here are a couple of charts of their comparison with the iPhone 6:

Higher is better

Oooooh. Your vaunted Samsung Galaxy Note 4 doesn't do so good in direct comparison, does it? How about some more Geek Bench comparisons?

I want you to note that the Samsung Galaxy Note 4 is listed
in this test. This test was run with all the rest, but it is the only
one where the Note 4 appears.


The Note 4 didn't even make this bench mark it was so slow.


Or this one, same reason. It's moving too many pixels around to make it!


Same problem here. . . it was in the tests, but it was WAAAY down.


This is what happens when you compare 64 bit processing with 32 bit processing.

Well, Fred, so much for your claims of the Samsung Galaxy Note 4 being so much better and faster, etc. It simply isn't. These are subjective tests and on many of them the Note 4 didn't even do as well as the Note 3. So sorry. . . ALL of them were bested by the Apple 64 bit power and graphic ability of the iPhone 6 and 6 Plus. It IS that much better.

[Swordmaker]

"Apple Linux/Windows Emulation: When Performance absolutely, postively does not matter."

You keep parading your ignorance. It is NOT emulation. It IS a Windows or Linux machine... when it is running those OSes. No emulation about it. You can even boot into Windows, if you desire. Are you truly that ignorant?

Multiple reviews from PC World and PC Magazine have rated Macs and Macbook Pros as the BEST computers for running Microsoft Windows they've EVER tested. That should tell you something. But then you don't want to be challenged by facts, do you?

[Swordmaker]

I too have Apple stock so I hope Apple makes lots of money using child labor in China : )

Multiple investigations have found that the only "child labor" in plants working on Apple products were people who had used fake IDs to get their employment. The ages of the people working at Apple's assembly lines range from 18 to 34. IF an underage worker is found, Apple requires that FoxConn must pay tuition, room and board, full time for that worker to return to school until they finish at least two years of college. Big incentive NOT to allow underage workers. So far, the total number was under 20 and only 8 have opted for the education, the rest returned home. Please stop spreading the anti-Apple FUD. Apple employees monitor the working conditions at their manufacturing partners to assure working conditions and employee ages, unlike other contractors. Apple has done more to improve the lot of the people who work at plants that make Apple products than any other American company.

Before you toss out the Suicide canard, let me address it. The suicides occurred at Foxconn plants making Sony Playstations, Nokia Phones, HP Computers, and Microsoft X-Boxes, NOT Apple products. There was only one suicide associated with Apple. That was a mid-level engineer who was caught smuggling out a proto-type iPhone. After being questioned he went home and jumped from his apartment patio ledge. In any case, the suicide rate among Foxconn workers is 1/4 the suicide rate of the same age cohort of the Chinese population in general, and one half that of the suicide rate of the same age group of students at Americans going to Harvard University. It was FUD and Hype.