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Image: Jeff Chiu/Associated Press
Image: Jeff Chiu/Associated Press
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APPLE HAS A tiny market share of the smartphone industry – but it is making some truly massive profits.
According to research firm IDC, the Cupertino company was responsible for just 18.3% of smartphones shipped globally in Q1 of 2015. Despite this, it is taking the vast, vast majority of profits in the industry – a staggering 92%.
As reported first by the Wall Street Journal, Canaccord Genuity analyst Mike Wakley estimates that Apple took well over 90% of all profits in the smartphone business in 2015 Q1, with Samsung coming in a distant second at 15%. Yes, that adds up to 107% because other handsets makers have either failed to make a profit or actively lost money.
It’s a stark illustration of just how wildly popular the iPhone 6 has been – in Q1 of 2015, Apple was responsible for 65% of smartphone industry profits. Since then, the launch of the iPhone 6 and 6 Plus propelled the company to the most profitable quarter of any company ever.
That said, the 92% is actually a decline for Apple: In Q4 of 2014, Canaccord Genuity estimated Apple was responsible for 93% of industry profits. But this (tiny) drop-off is to be expected: iPhone sales are cyclical and 2014 Q4 benefited from Apple’s record-breaking iPhone 6 launch.
In fact, that Apple has been able to sustain these profit levels is a testament to just how well the iPhone 6 is selling. A research note from Piper Jaffray’s Gene Munster in April 2015 said that Apple’s latest device is “fundamentally different” from previous iPhones, and we should expect to see higher-than-expected sales throughout 2015. These new profit figures seem to bear him out.
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Looking forward, it seems that Apple expects the good times to just keep on coming. The company is reportedly planning to build a record-breaking number of its next-generation iPhones - between 85 and 90 million units – before the end of 2015.
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