Apple’s iPhone is causing outrage within the mobile industry with its outrageous performance. Apple’s emphasis on brand and refusal to compete on price has resulted in the biggest chunk of cellular market earnings despite having the smallest market share. Even “Antennagate,” which could have killed many handsets, could not stop Apple from setting sales records with the iPhone 4. Even with Android on the rise, cellular market experts say Apple’s iPhone is so lucrative it’s unlikely the company feels threatened. Resource for this article – Apple dominates mobile industry with a fraction of market share by Newystype.com.
Apple prospers through innovation
The iPhone has always attracted a good deal of media attention. However the true nature of Apple’s money-making machine was detailed by Fortune on CNN.com. Fund market analyst Canaccord Genuity gave Apple stock a “buy” rating and price target of $ 356 per share. The experts 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 racked up the numbers where they counted. The company amassed 39 percent of market profits in that time frame. Apple left its heavyweight rivals competing among themselves for 32 percent. The significance of Apple’s performance was put in context by Canaccord Genuity. As a rule, cell phone manufacturers are lucky to make 10 perc! ent operating margins, or any profit at all. It’s estimated that Apple makes about 50 percent gross margin and more than 30 percent operating margin for its iPhone.
What’s powering Apple’s business design?
Capturing just 3 percent of a market while reaping 40 percent of its profit was extremely hard. Then Apple created the iPhone. Apple has far outgained its rivals with more than slick marketing campaigns, according to Jason Mick at Daily Tech. A big factor is the carrier iPhone owners love to hate. Apple has wrought an exceedingly rich contract from AT and T, who is using the iPhone to gain customers. 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 money to spend on innovation in the iPhone/Android war. Beating Android, Mick said, probably isn’t at the top of Apple’s list. All Apple has to do is keep its loyal customers happy.
The unstoppable iPhone
Even a so-called public relations debacle such as Antennagate could not disrupt the iPhone’s momentum. The media’s flogging of “Death Grip” reception interference failed to choke off sales of the iPhone 4G. Antennagate reached its peak in July. After Consumer Reports said it would not recommend the iPhone, experts predicted a disaster that never came. Recently, the magazine reiterated its position on the product. 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.
Further reading
CNN
CNN.com
Daily Tech
dailytech.com
Computerworld
computerworld.com
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