Apple is turning the cellular sector upside down with the recognition of its iPhone. Even though Apple claims a tiny sliver of the market, it collects the fattest portion of cellular market profits. The iPhone’s popularity makes it impervious to bad press. The recent “Antennagate” wireless reception crisis did not dent sales within the least. Even with Android on the rise, cellular industry analysts say Apple’s iPhone is so lucrative it’s unlikely the company feels threatened.
Apple has the gold affect
Just how overwhelming Apple’s performance has been was highlighted in an article by Fortune appearing on CNN. Giving its stock a “buy” rating, the fund market analyst Canaccord Genuity projected out Apple stock as high as $ 356 per share. The analyst’s recommendations integrated data showing how Apple is turning its inventions into money. From January to June this year, Apple sold 17 million iPhones. That total represents a market share of just 3 percent. The three biggest cell phone makers within the world, Samsung, Nokia and LG, dominated with a combined 400 million units sold. Apple collected 39 percent of the mobile industry’s profits during that time. Apple left its heavyweight rivals competing among themselves for 32 percent. Canaccord Genuity pointed out that most handset companies struggle to make a profit or even 10 percent operating margins. With its iPhone, it is believed that Apple enjoys a 50 percent gross profit on top of a 30 percent operating margin.
Underneath the surface of Apple’s accomplishment
Producing 3 percent of an industry’s products for making almost 40 percent of the industry’s profit was unheard of until Apple came along with the iPhone. 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. Plus, Apple is extremely aggressive in negotiating with manufacturers for higher volume and lower prices. This business model has been so successful, money is no object when it comes to developing technology that stays a step ahead of Android. However, that could possibly be a moot point. Mick figures that Steve Jobs isn’t all that concerned with Android. Continuing to impress loyal iPhone users is enough to keep Apple where it wants to be.
The iPhone’s energy builds
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 did not phase the company. Consumer Reports started the Antennagate furor in July when it said it would not recommend the iPhone. It nevertheless won’t. But Computerworld reports that Apple’s iPhone took first place for the fourth consecutive year in J.D. Power and Associates’ smartphone consumer satisfaction rankings.
Discover more info on this subject
CNN
CNN.com
Daily Tech
dailytech.com
Computerworld
computerworld.com
