Apple dominates smartphones where it counts
The never ending unsolicited advice to slash prices in pursuit of market share at all costs that the tech pundits and analysts give Apple falls flat in the face of the iPhone 14.5% market share and its complete domination of profits generated by all manufactures. Apple builds the best smartphones in the world. The company sells every iPhone it can make and faces strong backlogs due to the extraordinary demand for its products.
New reports confirm that Apple’s iPhone took 94% of all the profits from the tire smartphone segment of the tech market. That is up significantly from the 85% reported last year. In addition, Apple enjoys the best average selling price of any producer.
Canaccord Genuity, the company that produced the research report, pegged Samsung’s profit share at 11%. The reason the combined results of Apple and Samsung exceed 100% is because every other maker of smartphones reported negative operating profits. Those companies losing money on their smartphone business are Microsoft, Blackberry, Lenova-Motorola, Sony, LG and HTC.
According to the Canaccord report, the single biggest reason for the inability of these other companies to earn a profit are the weak average selling prices they set in order to grab market share. Apple’s average selling price in the September quarter was $670. That’s how the iMaker’s 48 million iPhones grabbed 94% of the profits.
How did number two Samsung do? The Korean company “shipped” 81 million units during the same period. Unfortunately for Samsung, the average selling price on those 81 million units was just $180. So while Samsung shipped 24.5% of all smartphones, (31 million more units than Apple), that $180 average selling price cost Samsung dearly.
What Apple proves time and again is that people will pay for quality. And it is superior quality that commands the sought after domination of profit share. And that, ladies and gentlemen, is why Apple doesn’t chase the false god of market share.
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