New estimates from Counterpoint Research say that while Apple takes home 32% of smartphone revenues, they take home 66% of total smartphone industry profits.
The company also included a graph, seen above, that shows that no other brand comes close to the iPhone’s profitability. Samsung is a “distant second,” taking home 17% of the overall handset Industry profits.
Counterpoint Research says Apple’s ability to capture such handsome profits is thanks to its loyal premium user base in major markets like the USA, EU and Japan. The report says Apple’s overall ecosystem is strong enough to guarantee it a steady inflow of revenue in the coming years.
Chinese smartphone makers operate at lower profit margins, but those margins are better than in previous years, as they expand outside of China and begin offering higher-priced models. Some of those Chinese brands are also looking at monetizing their use base like Apple does, by launching services like financial services, IoT products and others.
However, Apple is reportedly making things a bit tricky for the Chinese smartphone makers, thanks to a combination of longer consumer holding periods and Apple lowering pricing on some key SKUs. That has limited the margin space that Chinese vendors had used to increase their ASPs.
The report notes that global smartphone profits dropped 11% year-over-year in the third quarter, thanks to longer upgrade cycles and the trend of more buyers opting for mid-range handsets over flagship options.