Apple receives 92 percent of profits in smartphone market
There are hundreds if not thousands of companies who sell smartphones, but only one reaps the majority of the profits: Apple. According to financial experts at Canaccord Genuity, Apple garnered 92 percent of total profits out of the top 8 largest smartphone markers in Q1 2015. This is compared to 65 percent during the same time frame a year earlier.
Together, Apple and Samsung have more than 100 percent of the proceeds from the smartphone business since some other manufacturers are selling phones at a partial loss according to Canaccord Genuity. The latest financial reports from other manufacturers seemingly confirm this as well. For example, Samsung has a lower profit outlook for the current fiscal quarter and HTC is again reporting a huge quarterly loss. Microsoft is planning to write off nearly 18 billion USD from its Nokia debacle.
The fact that Apple can make so much profit is noteworthy as the iPhone brand only makes up less than 20 percent of total smartphone sales. While Android is popular, it is in a heated price war between the smartphones that carry it. Apple, on the other hand, may impose relatively high prices with fewer consequences. According to Canaccord, the average price of an Android smartphone is roughly $185 USD compared to $624 for a current generation iPhone. Apple gained 43 percent more iPhone sales in Q1 2015 compared to Q1 2014 despite the fact that iPhones are now selling for $60 more.
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