The cellular market has been looking for an answer to Apple’s iPhone, but it continues to suck all the air out of the room. Apple’s focus on an exclusive product and prestigious brand has allowed the company to claim more profits than all its major competitors combined, with a mere fraction of market share. Even “Antennagate,” which could have killed many handsets, couldn’t stop Apple from setting sales records with the iPhone 4. Even with Android on the rise, cellular market analysts say Apple’s iPhone is so lucrative it’s unlikely the business feels threatened.
Apple’s iPhone a license to print money
Apple’s domination of the mobile industry was reported on September 21 by Fortune on CNN.com. Giving its stock a “buy” rating, the fund market analyst Canaccord Genuity projected out Apple stock as high as $ 356 per share. The analysts used data about Apple’s performance to back up its advice to buy the company’s stock. From January to June this year, Apple sold 17 million iPhones. That total represents a share of the market of just 3 percent. The three biggest cell phone makers within the world, Samsung, Nokia and LG, dominated with a combined 400 million units sold. Apple collected 39 percent of the mobile industry’s profits during that time. Samsung, Nokia and LG shared 32 percent of industry profits. Canaccord Genuity pointed out that most handset corporations struggle to make a profit or even 10 percent operating margins. With its iPhone, it is believed that Apple enjoys a 50 percent gross profit on top of a 30 percent operating margin.
How does Apple get it done?
Capturing just 3 percent of a market while reaping 40 percent of its profit was impossible. Then Apple created the iPhone. Distinctive advertising aside, you will find significant reasons why Apple has managed to run circles around the mobile industry, said Jason Mick at Daily Tech. Mick writes that as the iPhone is so popular, AT and T has given Apple an very lucrative contract to grow its subscriber base. Apple also leverages the operating system to gain cost efficiencies from a lesser grade of hardware. It uses the recognition of its products to get high volumes at lower prices. Apple’s battle plan has resulted in piles of cash to spend on innovation within the iPhone/Android war. Beating Android, Mick said, probably is not at the top of Apple’s list. Catering to a loyal core of iPhone enthusiasts has gotten Apple this far.
Even Consumer Reports can’t derail the iPhone
Even a so-called public relations debacle for instance Antennagate could not disrupt the iPhone’s energy. When the iPhone 4G was unveiled, a concerted media effort to inflate a reception issue with the new model did not make it much further than the blogosphere. Antennagate reached its peak in July. After Consumer Reports said it would not recommend the iPhone, analysts forecasted a disaster that never came. It nevertheless won’t. Apple could care less as the iPhone, as reported by Computerworld, finished first in J.D. Power and Associates’ smartphone consumer satisfaction survey for the fourth year in a row.
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