The mobile industry has been looking for an answer to Apple’s iPhone, but it continues to suck all the air out of the room. Apple’s focus on an exclusive product and prestigious brand has allowed the business to claim more earnings than all its major rivals combined, with a mere fraction of market share. Even “Antennagate,” which could have killed many handsets, couldn’t stop Apple from setting sales records with the iPhone 4. Even with Android on the rise, cellular market experts say Apple’s iPhone is so lucrative it is unlikely the business feels threatened.
Apple transforms inventions into cash
The iPhone has always attracted a great deal of media attention. However the true nature of Apple’s money-making machine was detailed by Fortune on CNN.com. Fund market analyst Canaccord Genuity gave Apple stock a “buy” rating and price target of $ 356 per share. The experts used data about Apple’s performance to back up its advice to purchase the company’s stock. From January to June this year, Apple sold 17 million iPhones. That total represents a share of the market of just 3 percent. Samsung, Nokia and LG–the world’s three largest handset makers–sold 400 million units combined. Apple racked up the numbers where they counted. The company amassed 39 percent of sector profits in that time frame. Apple left its heavyweight rivals competing among themselves for 32 percent. Canaccord Genuity pointed out that most handset companies struggle for making a profit or even 10 percent operating margins. On the other hand, Apple is thought to make a gross margin of 50 percent on the iPhone, with an operating margin of 30 percent.
Apple doesn’t live by popularity alone
Until the iPhone was created, making nearly 40 percent of market earnings with a mere 3 percent market share was unthinkable. Jason Mick at Daily Tech outlines a few practical reasons why Apple makes more profit per phone than its competitors. A large factor is the carrier iPhone owners love to hate. Apple has wrought an exceedingly rich contract from AT and T, who’s using the iPhone to gain customers. Apple gains another profit advantage over Android competitors by using less expensive hardware. Apple also drives a hard bargain with its manufacturers. Apple’s battle plan has resulted in piles of money to spend on invention in the iPhone/Android war. However, that could possibly be a moot point. Mick figures that Steve Jobs isn’t all that concerned with Android. Continuing to win over loyal iPhone users is enough to keep Apple where it wants to be.
Even Consumer Reports can’t derail the iPhone
Apple has been able to maintain a high level of customer satisfaction despite Antennagate. The “Death Grip” reception issues that fanned much media attention upon the release of the iPhone 4G didn’t phase the company. When Consumer reports tested the iPhone reception problem and said it could not recommend the iPhone, Apple bashers reacted with glee. Consumer Reports is sticking to its guns. Apple could care less as the iPhone, as reported by Computerworld, finished first in J.D. Power and Associates’ smartphone consumer satisfaction survey for the fourth year in a row.
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