Counterpoint: With 13% of the market, iPhone took 75% of the profits, but…

From William Gallagher’s “Apple continues dominance over global smartphone profits in 2021” posted Thursday on AppleInsider:

“In Q2 2021, [Apple] captured 75% of the overall handset market operating profit and 40% of the revenue despite contributing a relatively moderate 13% to global handset shipments,” says Counterpoint Research in a blog.

“While this performance shows the power of the Apple brand,” continues the company, ” it is still lower than the peak of Q4 2020 when its revenue share reached a staggering 50%, up from 28% in Q3 2020, and its profit share reached an unprecedented 86%, up from 51% in the previous quarter.”…

Counterpoint notes that the market was affected both by the demand for 5G in Apple’s iPhones, and the fall of Huawei.

“Despite relative stability at the top, a major shift in recent quarters was caused by Huawei’s decline following the imposition of US sanctions against it,” says the research company. “Huawei’s fall has been accompanied by the rise of other Chinese OEMs, particularly Xiaomi, OPPO and vivo, which were the biggest revenue generators respectively after Apple and Samsung in Q2 2021.”

Cue the subway map charts (click to enlarge):

My take: Counterpoint does good research. Wish I didn’t have to take sloppy seconds.

6 Comments

  1. David Emery said:
    My takeaway is there is continued growth at the bottom, as well as at the top. I’m presuming that the days of selling phones at a loss are gone, so the low-end vendors are making a little profit on a lot of phones. And 5G expansion will continue trends in both directions, I suspect.

    The vendors being hurt are those in the middle, selling brand name Android phones. That includes a lot of Samsung’s product line, and probably Google too.

    3
    October 14, 2021
  2. Daniel Epstein said:
    Oddly backward looking story. Apple is going to be reporting in a couple weeks it’s fiscal 4th quarter, 2021 3rd quarter so not even useful for a long time as numbers will be updated soon. Also using % for profits instead of hard numbers so one has to decide if a percentage rise or fall is important or not. Apple could still be growing revenue wise while having a smaller % of industry profits. Also reporting by different companies may not really line up. Is Apple’s IPhone profitability only based on unit sales? What about the other companies?

    2
    October 14, 2021
  3. Cy Manning said:
    For me, the exceptional observation from this post is the evidence that polite business vernacular has accepted ‘sloppy seconds’. Undoubtedly shadowing the groundbreaking progress of ‘sucks’.

    2
    October 14, 2021
  4. Jerry Doyle said:
    One take-away from this post is the fact that Apple with 13% of market handsets shipped has significant upsize for continued growth going forward.

    4
    October 14, 2021
  5. Gregg Thurman said:
    Shipments plus profit. One without the other weakens overall performance.

    What I see is that iPhone shipments are accelerating, as are profits. That equals more customers each year willing (eager?) to pay more for iPhone than any of the competing manufacturers.

    4
    October 14, 2021
  6. Jonny T said:
    Yes, but Apple monopolises the profits, and the EU and Vestager will not allow this to continue.

    0
    October 15, 2021

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