Apple takes 92 percent of global smartphone earnings despite selling only 20 percent of total handsets
Apple, Inc. took a 92 percent share of the profits of the entire smartphone industry in the first quarter of 2015. This is despite the fact that Apple's iPhones only accounted for less than 20 percent of all phones sold within that period.
According to a report by The Wall Street Journal,financial analyst company Cannacord Genuityconducted the analysis on the smartphone industry's profits, which also revealed Apple's chief rival in the smartphone space, Samsung, garnered 25 percent of total sales but managed to earn only 15 percent of revenue. Apple's 2015 profit represents a steep climb over last year's 65 percent share.
The Canaccord report believes that Apple's dominance is partly because of its premium pricing scheme, making the iPhone far more expensive than the competition, and also because of the exclusivity of the iOS system.
In contrast, Android's open-source nature lets more manufacturers compete for sales, which then forces them to compete by way of pricing, driving prices - and profits - even lower. The earnings report explains that only Apple and Samsung made profits because other manufacturers either broke even or posted losses for the quarter.
Michael Walkley, Managing Director at Canaccord Genuity, told Mashable that the report is based solely on phone sales and does not include sales from other services connected to the phone, such as iTunes for Apple. "We collect the data from quarterly public reports from leading smartphone OEMs," Walkley says.
Walkley added that the report excluded large Chinese smartphone manufacturers, but notes that companies like Xiaomi are attempting to gain market share. However, the report also states that despite the presence of new industry players, China is the second-biggest market for direct-to-consumer sales next to North America.
Finally, the report reveals that Apple's move to join the phablet space is a sound one, with a bigger number of former Android users switching to iOS with the release of the iPhone 6 series.
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