iPhone Rakes in 8% of Cellphone Market Revenue, 32% of Profit
All Things Digital reports that, based on Bernstein Research analyst Toni Sacconaghi’s estimates, that while Apple takes in only 8% of cellphone industry revenue, they rake in a bind boggling 32% of the profit. This is similar to their share of desktop computing revenue and profits.
“With the iPhone and its Apps Store, Apple has established a formidable smartphone ecosystem, which history suggests is very difficult to overcome,” the analyst explains. “In fact, Apple has the potential to become a de-facto standard of sorts in the consumer smartphone market, much like it became in the portable media player market with iPods, due in large part to its first mover advantage and tight software and hardware integration.
Indeed. Applying the Mac and iPod business model, especially as convergent, mobile devices begin to outpace traditional players and platforms, was said by Apple to be their strategy from the get go.
Looks like it just might work out for them…
August 6th, 2009 at 10:48 am
The iPhone rules. And I thinks apples only gonna get better with camera iPods and the itablet and new iPhones every year
August 6th, 2009 at 11:07 am
that’s bind boggling.
August 6th, 2009 at 11:08 am
Ok a new iPhone every year I don’t that will happen I think 2yrs but yhe iPhone rules and mac rules PC SUCK
August 6th, 2009 at 11:20 am
Haha. I love the graphic
August 6th, 2009 at 11:34 am
yeah baby, yeaaaah ^_^
August 6th, 2009 at 12:35 pm
“they rake in a bind boggling 32%”
Bind Boggling?
And awesome new pic Rene!
August 6th, 2009 at 1:29 pm
Lol, with everyone else. Hilarious graphic, nice to see some new “evil” themes.
August 6th, 2009 at 2:20 pm
TRY SphereChain for iPhone or iPod Touch
August 6th, 2009 at 4:37 pm
They really seem to be suffering from all the app store controversy, huh? i knew it!!!!!
August 6th, 2009 at 5:59 pm
@the real truth
They weren’t suffering in 1986-89, either, when folks in the Mac unit had solid technology, an early market lead, and breathtaking profit margins. They focused on increasing margins while keeping developers at arms length. How did that work out for them?
August 6th, 2009 at 6:31 pm
@jcalifornia:
So far it’s been a new iPhone EACH year.
August 7th, 2009 at 12:22 am
When one manufacturer garners that much of the profit it means they have monopoly pricing power. They can pretty much set the price at what ever level they want.
The fact that the have competitors doesn’t matter, because their product is so compelling.
Eventually, this draws new competitors with new product (HTC,Palm) because the potential for profit is so great.
Historically, companies with pricing power tend to have long periods of being top dog, like IBM, Microsoft.
But this market is changing so fast that I’m not sure Apple can keep up the pace. If the 2010 phone is a re-hash of the existing phones, the run is over.
But if the 2010 phone has a new look and a new OS, then everybody else gets to play catch-up for another two years.
August 7th, 2009 at 2:42 am
If apple can keep being innovative with the iPhone they should be fine. Its funny i have VzW sales reps telling me that apple will bend and give VzW their way for marketshare….
Apple is going to work the exclusivity angle to try and keep the device a “valued” product.
August 7th, 2009 at 9:23 am
I agree that this is their strategy; except that they’re going more into the lower end market than they do with Macs; i.e. the continued selling of the 3G edition for a discount. It’s better than other smart phones for the same price. http://www.computersncs.com/rd_p?p=186122&t=9544&a=25008-theiphoneblog&gift=25008
August 7th, 2009 at 9:46 am
the analyst’s thinking is a bit off…Apple didn’t have first mover status on smartphones. Smartphones had been around for a while before. To be sure though, Apple did revolutionize the smartphone world. But that doesn’t give them first mover status, especially with companies like HTC being around since before Apple, and slowly growing alongisde the big A
August 7th, 2009 at 10:08 am
@Chris – I read it as iPhone + APP STORE = first mover status. I don’t know if the revolutionary touchscreen smartphone would qualify them as first movers (it was quite a doosey though, to be sure) but when you add the app store to the equation, it’s checkmate for this round.
August 7th, 2009 at 12:54 pm
@dev
apple is still around right? Some might say stronger than ever. Mistakes were made sure, but they were certainly learned from n the sense that I don’t really think treatment of developers had all all that much to do with the dark period. Questionable business practices on the side of microsoft, vast amounts of money poured into products which didn’t exactly make good on their promises (pippen, original apple tv, even the newton). Mac clones weren’t exactly good for business either. Upon his return jobs didn’t exactly start kissing the *** of developers. He trimmed the fat. That’s what got them back in the game