There are over 1,000 smartphone manufacturers in the world, but Apple is still taking the lion’s share profit from the smartphone industry. A report from Canaccord Genuity claims Apple took 92 per cent of all profit in Q1 2015, with Samsung the only other manufacturer hitting 15 per cent profit.
This is a big worry for the industry as a whole and shows how volatile the smartphone business is for new and old manufacturers. The report does not include private companies, meaning upstarts like Xiaomi and Micromax—two of the most interesting manufacturers—are not relevant in the discussion.
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Lenovo, Huawei, BlackBerry, Microsoft and HTC have all failed to reach profitability on the mobile front, either due to lack of sales or lack of profit per unit. Apple sells each iPhone at $624 (£401) average, while Android devices have an average sale price of $185 (£119).
Of course, the average sale prices differentiates depending on the manufacturer, but for the most part Android partners are incapable of matching the price Apple is hitting with the iPhone, yet cannot match Xiaomi or Micromax on low cost Android prices.
This puts manufacturers like HTC, Lenovo and Huawei in an awkward middle ground position, where they’re not seen as premium brands like Apple or cheap brands like Xiaomi or Micromax.
Apple’s lead on the smartphone industry continues to grow, with Samsung failing to estimate sales for the Galaxy S6 and S6 Edge leading to a rather poor second quarter. The Cupertino-based company managed to hit 74 million iPhone sales in the first quarter, beating the entire Samsung mobile range in overall sales.
Depending on the iPhone 6S and 6S Plus success, we may see another year of Apple’s complete dominance, or a slight downturn in the company’s fortune. The growing private companies in the East also spell a bit of danger for Apple, who cannot match their low prices.