Business in Tech

Apple Sales Are On The Decline, Yet It Now Has 103 Percent Of Smartphones Profit In Q3 Of 2016

Apple iPhone sales are taking a dive compared to rivals like Samsung but as one would expect, its profit should also fall in light of this. But the phone maker continues to make profits that many don’t seem to understand how.

In 2015, Apple recorded 92% of the total income from the World’s eight top smartphone makers and this was a 27% jump from 2014. That figure in 2016 now stands at 103 percent at least in the third quarter.

According to an Apple Insider report, BMO Capital Markets analyst Tim Long estimates Apple’s share of handset industry operating profits hit an all-time high of 103.6 percent for the most recent quarter, reports Investor’s Business Daily. Apple’s super-100 percent performance resulted from losses posted by other major vendors over the same period. Apple rival Samsung placed a distant second on Long’s list with a 0.9 percent share of profits, while HTC and LG ended up in the red. By comparison, Long says Apple took a 90 percent share of profits in the year ago quarter, though other estimates put that number as high as 94 percent on only 14.5 percent of total volume”

iOS accounted for 12.1 percent of global smartphone shipment in the month ending September 2016 but that figure was 13.6 percent in the same quarter in 2015. Meanwhile Android gained ground from 84 percent last year to 88 percent this year. With an 88 percent share of the market, Apple still leads the profits chart primarily because it doesn’t share the mobile operating system with any other phone maker obviously. Over the years, Apple has managed to sell its devices at high prices despite making those devices at much lower costs.

Here’s a breakdown from last year (don’t mind today’s exchange rates);

Item Cost to Apple per iPhone 6s Plus
Screen $52.50/10,450Naira/5,400 Kenyan Shilling
Main camera (12 mega pixels) $22.50/4,400Naira/2,300 Kenyan Shilling
16GB of storage $5.50/1,000Naira/560 Kenyan Shilling

There is now a renewed focus on services by Apple which has seen a significant growth in its revenue from services like the App Store, Music and iTunes.