Apple Grabs 91% Share of Phone Profits

PaulRubens on Wednesday November 23, 2016 at 08:10:55 AM

Apple Grabs 91% Share of Phone Profits

Apple is making huge profits from iPhone customers by exploiting brand loyalty to charge premium prices.

(CCM) — Apple has grabbed a record 91% share of the profits from the global smartphone market in the third quarter of this year despite the fact that sales of its iPhones have been falling, according to a report by CNBC. The figure comes from data supplied by research company Strategy Analytics. Apple's strong brand following allows it charge a premium price for its phones — sometimes called the "Apple tax" — resulting in profit margins far higher than those enjoyed by any other smartphone manufacturer. "Apple's ability to maximize pricing and minimize production cost is hugely impressive and the iPhone continues to generate monster profits," Linda Sui, one of Strategy Analytics' directors, said in the research note. Apple is believed to have made profits of over $8 billion from iPhone sales of about 45 million units during the quarter.

According to the company's research, China's Huawei took the second largest share of profits in the smartphone market, with just 2.4%. Huawei is now the third-largest smartphone vendor after Apple and Samsung. It is followed closely by Chinese startup brands Vivo and OPPO, both of which took a 2.2% share of smartphone profits by pursuing a strategy of selling low-cost but high-specification phones in their domestic market.

Image: © VVK - Shutterstock.com


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