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You are here: Home / Mobile Phones / Apple Rakes in 93% of Mobile Profits
Apple Rakes in 93% of Mobile Phone Profits
Apple Rakes in 93% of Mobile Phone Profits
By Shirley Siluk / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
FEBRUARY
09
2015
The September release of the iPhone 6 and iPhone 6 Plus helped Apple dominate the mobile phone market in Q4 2014, achieving a 93 percent share of the market's value, according to the latest report from the research firm Canaccord Genuity.

Apple could also hold a full one-third of the global smartphone market by 2018, according to Mike Walkley, Canaccord's managing director and senior equity analyst. That would mean some 650 million iPhone users across the world in the next three years.

For the shorter term, the strong momentum Apple has built with the iPhone 6 and iPhone 6 Plus is expected to continue throughout this year, according to the report. That's because only about 15 percent of the 404 million iPhone users have so far upgraded to the latest models.

'The Highest We've Seen'

We reached out Walkley to learn more about his findings, and what they mean for both Apple and its competitors. Apple's massive hold on the Q4 mobile market is "starkly better in terms of industry gains and profits" than ever seen before, Walkley told us. Following the September 2013 release of the iPhone 5s, for example, Apple's share of mobile profits reached about 75 percent, he said.

"This 93 percent is far and away the highest we've ever seen," Walkley said, saying his company has tracked those figures since the days when Nokia was the dominant cellphone company.

No More Knock-On Boost for Android

One reason for Apple's strong performance with the iPhone 6 and iPhone 6 Plus stems from the devices' larger screen sizes, Walkley said. The iPhone 6 has a Retina HD display measuring 4.7 inches, while the iPhone 6 Plus comes in at 5.5 inches.

Those larger sizes took away the potential for a knock-on effect seen with previous iPhone releases, Walkley said. When earlier iPhones came out, customers who couldn't get the devices during the first few weeks of hot sales were frequently persuaded to instead purchase Android devices. The appeal lay in the fact that -- for the same price as the iPhone -- customers could get Android smartphones with much larger screens, he said.

As a result, the market often saw a counterintuitive increase in Android smartphone sales following the release of a new iPhone, Walkley added. With the new, larger iPhone 6 displays, however, that selling strategy no longer worked.

For an Apple competitor like Samsung, the iPhone 6 and iPhone 6 Plus have effectively put it between a rock and a hard place, Walkley said. Apple's newest models will make it harder for Samsung to compete on screen size, while the rise of cheaper yet feature-rich smartphones from China are making it harder to compete on price.

Apple, meanwhile, might be facing a different kind of challenge -- maintaining its workforce so it can continue to innovate. A report by Bloomberg last week revealed that Tesla Motors has hired "at least 150 former Apple employees, more than from any other company, even carmakers." The reason is that cars are becoming increasingly computerized, leading automakers to look to Silicon Valley for help, the article noted.

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