Date
14 December 2017
Apple's iPhone 6 and iPhone 6 Plus are commanding premium pricing while rival Android brands are marking down prices amid fierce competition. Photo: Reuters
Apple's iPhone 6 and iPhone 6 Plus are commanding premium pricing while rival Android brands are marking down prices amid fierce competition. Photo: Reuters

Here’s how Apple gets nearly all of the smartphone profits

It’s a crowded market out there for roughly 1,000 smartphone makers but one company has managed to corner nearly all of the profits.

Apple Inc. accounted for 92 percent of the operating income of the eight top smartphone makers in the first quarter.

The figure is up from 65 percent  a year earlier.

It’s all down to premium pricing, according to the Wall Street Journal.

Apple sells fewer than 20 percent of smartphones but it commands much higher prices for its phones.

The iPhone last year sold for a global average of US$624 compared with US$185 for smartphones running Android, according to research group Strategy Analytics.

In its fiscal quarter to March 28, Apple sold 43 percent more iPhones than a year earlier — at a higher price.

The average iPhone price in the quarter rose by more than US$60 to US$659 on the strength of the larger-screen iPhone 6 and 6 Plus models.

Its rivals mostly use Google Inc.’s Android operating system, making it harder for them to distinguish their offerings and prompting many to compete by lowering prices, WSJ says.

Samsung accounted for 15 percent of industry profits while other smartphone makers broke even or lost money.  

Last week,  Apple asked suppliers to make a record number of new iPhones.

At the same time, Samsung forecast disappointing profits, HTC Corp. reported a quarterly loss and Microsoft Corp. wrote down 80 percent of the value of the smartphone business it acquired from Nokia Corp. last year.

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CG/RA

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