Cell phone profit
 

Apple and Samsung accounted for 99 percent of the total mobile phone profits, with HTC taking the remaining 1 percent

Apple and Samsung get 99% of the total mobile phone profits - GSMArena.com news

http://st.gsmarena.com/vv/newsimg/12...marena_001.jpg

I don't trust that source one bit. Samsung would have been much higher before Apple got really big.

^ So you don't trust the financial reports from the respective companies? That's where these numbers come from.

I misworded it (read this post right before I went to bed last night). What I meant was I don't trust the CHART. I read into it some more, and this chart is actually a better representation of the data

http://st.gsmarena.com/vv/newsimg/12...marena_002.jpg

The first chart makes it look like there is a steady profit amount, and apple is 'taking' it from the other vendors. This isn't the case as you can see in the second chart.

is this in North America? or on a global scale?

global

its amazing the profits apple issued for q1 :fulloffuck:

but considering their mark ups and ppl willing to buy i guess its no surprise (costs the same to manufacture an iphone4 and nokia n8 but the ip4 costs 2X+ than the N8 does retail)

samsung/nok make a lot of their $$ from dumbphones too where markups isn't really there + samsung/nok manufacture their own parts/devices + they pay a shit load more in terms of R&D so that cuts into their profits too

^ I know the N8 had similar BOM to the iPhone 4, but wasn't the list price $449? That seems a bit more than 1/2 of an iPhone 4.

When Samsung sells components to Apple (or anyone) part of the cost they charge includes the R&D to design those components. So Apple pays the same R&D cost on components as everyone else (or maybe less, if Samsung Semi gives a break to Samsung Mobile) and definitely pays more R&D on the rest of the phone considering how anal they are about every little detail.

Apple also has R&D on iOS and their complete eco-system that others don't have to worry about or foot the continuous operating costs for. Samsung (for example) doesn't have to spend anything on Android other than how they customize it. And considering how long it took to start getting ICS on Samsung phones, it appears they spend very little R&D on their OS.

Then there's economies of scale, which is where Apple really makes money. When you order components in the tens (or hundreds) of millions you get steep discounts. And selling 50 million of a single phone is going to be far more profitable than selling 5 million each of 10 different phones.


With any product, the selling price isn't based on your cost plus a certain markup - it's based on what the market will bear. This is determined by what your product offers and how valuable it is to the customer. It's also determined by what competitors are offering and what their price points are. Pretty much every single manufacturer in the world sells products for what they think the customer will pay. The only time they stray from this is if their product isn't selling (think Playbook or TouchPad).

yes msrp for the N8 was higher but it retailed in NA @ major resellers like BLT, Amazon, etc in the states from $300+ when the ip4 was like 800? @ launch (overseas had different pricing of course the n8 cost more but the ip4 too)

apples own r&d bill is something like 2billion for 2011? samsungs was 9billon+!!! not sure what Nokias was in 2011 but in 2010 it was $4bn whereas apple was like 700million and samsung 3bn

I imagine a lot of R&D doesn't get passed off until following years either + it depends on what makes its way to market


and obviously manufacturers are going to sell what they can get for it who wouldn't? if anythings surprising at all its the people willing to pay those prices ;)

^ $2 billion on a half dozen products vs $9 billion on hundreds of products.

right.... but the point i was making is that R&D also cuts into their quarterly postings

They also stretch out the R&D across various generations, and are able to get people to buy the same products every year, with a few tweaks here and there. That stretches their costs even thinner

The first graph is a graph of profit share of total profit. By definition it always is as a percentage of 100% total profit of the industry. The fact the industry's profit is growing does not make this graph less reliable or accurate. The graph makes perfect sense and is totally accurate and logical as long as a person can visualize what they are actually seeing.

Mark

It's still not a good way to look at the data. The original article even states as much.

That's true. As a percentage of revenue, Samsung spends about 3 times as much as Apple does, so it takes a much bigger chunk out of their income.

However, they are not monetizing their R&D expenses nearly as well as Apple does and this reflects in profits. Apple concentrates on making a small number of products efficiently. Samsung takes the "shotgun" approach of making a gazillion products and seeing which ones end up being successful (on their mobile website they currently list 27 smartphones and 63 dumb/feature phones). Do they really need to make 90 different phones? Or how about 106 different TV's?

Samsung profits are lower because they never reach high economies of scale on many of their products and spend a lot on R&D making so many different versions.