Apple Controlled 93% Of All Mobile Profits This Holiday

It’s no surprise that Apple’s revenue is huge. The company made $18 billion in profit alone on 74.5 million iPhones sold in the last quarter. But perhaps more stark is just how much of the pie the PC and smartphone maker raked in, a whopping 93-percent of all mobile profit. Even if Android still has the controlling share of smartphones sold in the US and worldwide, Apple is making all of the money.  

According to Mike Walkley of Canaccord Genuity, who raised his price expectation of AAPL stock to $145 from $135, his research shows that the Cupertino company has a wild controlling interest of all profit made in the mobile industry. If true, this effectively means that no one else is really making money in the sales of smartphones and apps.  

Then again, the recent $18 billion Apple made would easily dwarf everyone else, especially small developers who may consider making $100,000 annually on apps successful.

Dominance

More importantly, it shows just how seriously Apple controls the smartphone hardware market. Competitors like Samsung, HTC, and LG simply don’t compare in the US, even if the devices are comparable by specifications, power, and usability.

Apple has figured out how to make the most money possible from the production of iPhones and iPads while it appears like most other smartphone makers can’t compete on the margins that Apple has, though they are still forced to sell phones for similar pricing to the iPhone. This is mostly due to the ingenuity of current CEO Tim Cook, previously the SVP of Worldwide Operations, helped then CEO Steve Jobs bring the company back from the brink to the current $700+ billion behemoth and largest company in the world that Apple is today.

Profit Strategy

He is credited with doing so by making strategic partnerships with manufacturers to keep costs low far in advance to new products, which is why the iPhone has historically cost $650 for customers to buy (or $200 on contract) but only cost $100 to build. The current iPhone 6 is estimated to cost upwards of $200 per device. This would still leave $450 of profit per device.

Apple is also able to control mobile profits because of its all-in-one solution, where Mac computers and iOS-based smartphones and tablets can communicate easily. This means all music purchases via iTunes can easily be streamed or stored on a mobile device instantly.

Simultaneously, Apple’s App Store makes much more from apps developed on iOS than Android developers make, though Android is slowly gaining more paid apps and Android owners are starting to pony up for higher-quality apps.  

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

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