Apple captures 66% of smartphone industry profits and 32% of overall handset revenue, according to a new report from Counterpoint Technology Market Research. Samsung placed a distant second, taking 17% of overall industry profits.
Counterpoint expects Apple will continue to see a stable revenue stream from iPhone in the coming years.
The loyal premium user base in the major markets like the USA, EU and Japan is one of the reasons that Apple can still operate at a profit level that its competitors can only wish for. Now with a strong service strategy, Apple’s overall ecosystem is strong enough to guarantee it a steady inflow of revenue in the coming years. In the immediate future, we believe that Apple’s profit for the holiday season will increase with the new line up of iPhones gaining good traction.
Global handset profits are said to have declined 11% year over year to $12 billion in the third quarter of 2019. This is due to an increased mix of entry to mid-tier products and a fall in revenues for key OEMs. Only Samsung and Huawei managed to increase revenue on an annual basis. A longer replacement cycle for premium smartphones is likely a contributing factor.
Although Chinese smartphone brands operate at low-profit margins, they are expanding outside of China and into higher-tier price bands. Some brands are looking to monetize their user base by launching financial services, IoT products, and more. However, it's reportedly become more challenging for these brands to increase ASPs and margins due to longer holding periods and Apple's lower price offerings.
Finally, Counterpoint believes that 5G devices will drive some upgrades with Huawei, Oppo, Vivo, and Xiaomi expected to see gains from an aggressive push towards the new technology. It's unclear if the revenue growth will lead to added profit as BOMs will rise as well.
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Counterpoint expects Apple will continue to see a stable revenue stream from iPhone in the coming years.
The loyal premium user base in the major markets like the USA, EU and Japan is one of the reasons that Apple can still operate at a profit level that its competitors can only wish for. Now with a strong service strategy, Apple’s overall ecosystem is strong enough to guarantee it a steady inflow of revenue in the coming years. In the immediate future, we believe that Apple’s profit for the holiday season will increase with the new line up of iPhones gaining good traction.
Global handset profits are said to have declined 11% year over year to $12 billion in the third quarter of 2019. This is due to an increased mix of entry to mid-tier products and a fall in revenues for key OEMs. Only Samsung and Huawei managed to increase revenue on an annual basis. A longer replacement cycle for premium smartphones is likely a contributing factor.
Although Chinese smartphone brands operate at low-profit margins, they are expanding outside of China and into higher-tier price bands. Some brands are looking to monetize their user base by launching financial services, IoT products, and more. However, it's reportedly become more challenging for these brands to increase ASPs and margins due to longer holding periods and Apple's lower price offerings.
Finally, Counterpoint believes that 5G devices will drive some upgrades with Huawei, Oppo, Vivo, and Xiaomi expected to see gains from an aggressive push towards the new technology. It's unclear if the revenue growth will lead to added profit as BOMs will rise as well.
Read More