The smartphone market is quite complex and no manufacturer can be so certain of what the future holds. This market is obviously not a “zero-sum game”, however, it is also an indisputable fact that some companies have an absolute market advantage. In the high-end smartphone market, it has become common practice for Apple to take home absolute profits. According to Counterpoint Research, in the second quarter of this year, Apple alone accounted for 3/4 of the global smartphone market’s profits.
The report said: “In the second quarter of this year, although Apple’s contribution to global mobile phone shipments was relatively small (with a share of only 13%), it gained 75% of operating profit and 40% of revenue in the entire mobile phone market.”
Furthermore, the report also partly reads “Although this performance highlights the power of the Apple brand, it is still below the peak in the fourth quarter of 2020. At that time, Apple’s revenue share reached a staggering 50% (higher than the third quarter of 2020). The profit share reached an unprecedented 86% (up from 51% in the previous quarter)”.
In addition, although Samsung is the world’s largest smartphone supplier in terms of annual shipments. However, it lags behind Apple in terms of revenue and profit share. In this regard, there is a large gap between Apple and Samsung.
Xiaomi will start to increase its profits
Counterpoint Research believes that Xiaomi has been focusing on increasing its mobile phone shipments. However, the agency claims that Xiaomi’s next goal will be to convert its “high shipments” into “high profits.”
Overall, Counterpoint Research said: “Apple may continue to maintain its advantage, allowing it to continue to charge premiums for mobile phones, thereby maintaining a high operating margin”.
The global smartphone market shipped 329 million units in the second quarter of 2021. The top five (5) mobile phone manufacturers were Samsung, Xiaomi, Apple, Oppo, and Vivo. Among them, Apple shipped approximately 48.9 million units, a year-on-year increase of 30%.
In all honesty, iPhones are not entirely the best smartphones we have in the market. However, the company has a dedicated fanbase that will buy its devices no matter what. Also, the company has been able to keep its camera at the top level. Apple fanboys are always ready to pay the dollars no matter how much they need to ditch out. In some local areas, owning an iPhone is almost like a “cult”. You technically don’t have a smartphone if it is not an iPhone. This sort of idea from the market contributes to Apple’s high profits.