Recent research published by Counterpoint Research on the smartphone market shows that, even in adversity, the Apple (not surprisingly) remains among the top manufacturers – and the one that profits the most.
In this sense, despite the fact that the global handset market fell 11% in the third quarter of 2019 (compared to the previous year), Apple managed to capture 66% of industry profits, which corresponds to 32% of the total revenue; even so, it is a number slightly below that released in the same period of 2018.
According to the firm, the loyal Apple user base in important markets (such as the United States, Europe and Japan) is one reason that the company continues to earn more than its rivals – and there is no forecast that this scenario will change in the near future, thanks to the company’s new services (Apple Arcade, Apple TV +, etc.).
Now, with a strong service strategy, Apple’s overall ecosystem is strong enough to ensure a steady stream of revenue for years to come. In the immediate future, we believe that Apple’s profit for the holiday season will increase, with the new line of iPhones gaining prominence.
In fact, Apple positions itself well ahead of its rivals when it comes to profitability. To give you an idea, Samsung (which sells a much larger number of devices than Apple) retains only 17% of industry profits – which already represents growth for the South Korean manufacturer, given the increased sales of Galaxy A and Note10 devices.
As we said, the smartphone market is going through a not so positive phase. Given the 11% drop in revenue, sales totaled $ 12 billion in the last quarter; according to Counterpoint, this decline is due to the fact that devices flagships are facing increased competition from intermediate models in major markets around the world.
Nevertheless, this retrograde phase is expected to end soon. For the firm, the adoption of 5G in the coming quarters will drive users to update their devices – which will lead to revenue growth for manufacturers, who are already preparing for the complete transition.
Although the expectation is positive for the coming months, companies should not register an increase in profits, since the production cost of smartphones is also expected to rise.
via Patently Apple