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by jdietrich
2882 days ago
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iPhones represent about 15% of global smartphone shipments, but over 90% of profits. Google intended to commoditise smartphones with Android and largely achieved that aim; nobody is making much money from Android handsets. iOS (and the luxury cachet of the brand) gives Apple a moat that allows them to make meaningful profits on their devices. Apple's operating margin hovers around 22%, but their gross margin on iPhones is well over 50%. A lot of the difference is tax trickery - Apple funnel a large proportion of profits to offshore companies, which doesn't appear on their balance sheet. https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifti... https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey.... |
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Compare to others, Google subsidise Android development with Ads from Search Engine, Huawei cover most of the R&D expense via their Industry leading telecom infrastructure market, Sony has lot of business to cover for their every losing money Mobile handset, Samsung Electronics, has NAND / DRAM and Semi Fab for their bottom line as well as being a group of larger Samsung.
It is not that Apple made lots of money covering the industry 90% of profits, it is that everyone else aren't making money at all. And in the long run, those who cant get enough cash flow will die out. In 2017 the top 5 brand manage 60% of market shares, nearly 10% higher then last year. We are looking at 65% this year, and very likely in a few years time, Apple, Samsung, Huawei, Vivo / OPPO, Xiaomi will cover 80%+ of market.