Apple Accounts For 52% of Mobile Profits With 4% Market Share
Apple is currently estimated to have taken 52% of the handset industry’s operating profits last quarter. This number comes in despite the Cupertino giant only having a 4.2% of the global handset market share. An analyst from Canaccord Genuity, T. Michael Walkley issued a note to investors on Friday in which he estimated Apple took more than half of the industry’s operating profits in the third quarter of 2011. This is a 5% increase from the third quarter last year, when Apple’s shared operating profits was 47%.
What is a bit more surprising is Apple’s growth in profit share despite its loss in the market share. The iPhone was reported to dip from a 5.4% market share to its current 4.2% as Samsung estimated to have led the industry in smartphone shipments in the quarter, though its profits shrank.
Looking back at where the iPhone once was to where it is now, Apple has made quite the climb. In 2007, Nokia had 67% of operating profits in the industry, while Apple and its iPhone represented just 4%. Four years later, Apple has switched places with Nokia, which now accounts for just 4% of operating profits. Apple’s main rival in the mobile industry is now Samsung, which currently seems to have scale advantages and the leading share of Android devices according to Walkley. Both companies combined represent 81% of the handset industry’s operating profits last quarter, quite the duopoly.
These reports are all a part of the third quarter, which don’t account for all of the success the iPhone 4S has seen. According to Walkley who said that he has conducted “channel checks” the projected iPhone sales for the December Quarter have increased to 29 million, up from 27 million due to an increase in demand not only for Apple’s new iPhone 4S, but also for the lower-priced iPhone 4 and iPhone 3GS models.
Many consumers are getting sucked into Apple products these days and with the prices being lowered,. There seems to be a whole new group of people that can now purchase iOS devices, who previously weren’t able to. For certain users, the ease of use and convenience of the older generation iOS devices often prevail when compared to other offerings in the same price range. In many cases, they even tend to outperform other models within the same price range as well. With the strength of the iPhone, and Apple’s industry leading profits, Canaccord Genuity has continued to maintain its buy rating for Apple (AAPL) stock and increased its price target to $560.
The trend of Apple products becoming more popular and generating more profits seems to continue. Do you think any upcoming device will give Apple a run for its money? Or do you think this trend will continue with time? Share any thoughts below!