Apple’s Share of Smartphone Industry’s Profits Soars to 92% | Hacker News Reader

Apple’s Share of Smartphone Industry’s Profits Soars to 92%

wsj.com

34 pointsSomeone15 comments

Isn't Tim Cook a supply chain guy? That may partially explain why Apple is so good at squeezing every dollar out of their products.

Here's a similar article without the paywall I ran into at WSJ: http://www.businessinsider.com/apple-92-percent-profits-enti...

I noted that Apple is responsible for less than 20% of the industry in terms of units sold last quarter, but makes over 90% of the profit. Considering the prices of a Galaxy S6 and iPhone 6 aren't that different, there is something way different between the operations at Apple and the competition (read: Samsung). The difference is in profit margin, but it's not obvious where (at least to me). Samsung should have great deals with it's affiliates of the same name on chip and screen prices, and it can't be that it's factory conditions are much better than Apple's.

I'm curious as to whether the figures for percentage of profits in the "smartphone industry" include only hardware (where most of the other OEMs make their money) or the whole mobile division (iOS devices + App Store revenue, etc)

Tim Cook got where he is through optimizing logistics, manufacturing, everything. They are just very disciplined and efficient when it comes to cranking out devices, while their software R&D is still quite reasonable.

Samsung is one of those old-fashioned conglomerates that tries to do too many things in house (they even out source for Apple!), but I bet they lose efficiency because of that.

I believe the big difference is that Apple sells mostly their top model, whereas a lot of Samsung's business is in the lower tier/cheaper phones. Of course, those lower end phones have much lower profit margins.

Not the most objective source I realize, but here's some relevant info [0]:

Samsung said its phone shipments were "driven by mid to low-end products," adding that its Note 4 release only contributed a "marginal increase" due to being released at the very end of the quarter.

[0]:http://appleinsider.com/articles/15/01/28/samsungs-mobile-pr...

Does Apple have to pay a ridiculous patent tax to Microsoft for use of an OS it developed?

No, but neither does Samsung.

Apple does have to pay for R&D for its own operating systems though.

I thought Samsung signed a deal with MS to licence the patents infringed by Android. Something in the region of $10 per handset.

Source: http://www.pcworld.com/article/240738/microsoft_signs_androi...

The #1 problem here is that Samsung largely tried to be the "like the iPhone but cheaper" player in the market. While that worked out fantastically well in the early days, it came to bite them pretty hard when even cheaper competitors rolled in.

If your claim to fame is you're the cheapest, you're going to be racing to the bottom. Look at how dismal the state of Acer is in the PC world.

What they should have done is differentiated themselves on something other than price.

It will be hugely ironic if Blackberry manages to produce an Android phone more successful than Samsung's entries because they stubbornly stuck to their core design principles. People buy Blackberry not for price but because it's a Blackberry. They love the things.

When the profit margin is a cool $250 USD and everyone else competes in low price/volume but cant even reach apple's numbers, its not surprising at all. Same is true for the Macbook, they don't ship as much as Lenovo but they do have a margin that their customers are more than willing to pay.

Last time I checked, Macbooks cost the same as Thinkpads.

Lenovo sells many laptops which cost much less than Thinkpads. Thinkpads tend to be the more expensive models. A quick search for "macbook" and "thinkpad" prices between $900 and $1300 for macbook and between $400 and $999 for thinkpad. Searching for a regular "Lenovo laptop" (excluding Thinkpads) I see prices as low as $190.

Not necessarily true -- maybe for the X1. However you can get a similarly specced T450s for less than a 13" MBP.

I just bought a new laptop and did comparisons between Dell, Lenovo, and MBP. I ended up with a Lenovo T450s (one SSD running Windows 8.1 and another m.2 SSD running Ubuntu).

Unless the methodology has changed "Smartphone Industry" here means 7 firms, Apple, BlackBerry, HTC, Lenovo/Motorola, Samsung, Nokia/Microsoft, LG.

I doubt Xiaomi and all the littler known brands are making that much, but it would be interesting for someone to quantify it.

this is a duplicate.

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