Apple is not the biggest player in the smartphone market, I agree. But you can’t deny that it is the most profitable smartphone company on earth. And now, thanks to Samsung’s Note 7 tragedy, Apple has managed to bag more than 100% percent of the market’s profit in the 3rd Quarter of the financial year 2016, despite having only 12% of the market for its overall sale.
Want to find out how that happened? Let’s take a look…
Tim Long, BMO Capital Markets analyst, said that Apple’s profit had reached its highest ever level for a quarter — a whopping 103.6%. The question, obviously, is how can Apple make more than 100% profit? That’s possible because all the other rival companies have suffered a net loss!
Samsung, Apple’s arch-rival, has slipped to second place in Long’s list of profitable companies, with a 0.9% share of profits (remember, Samsung suffered a loss of over 2 Billion Dollars in the Galaxy Note 7 fiasco). Meanwhile, HTC and LG were left wondering how the grass turned red.
The fresh research that was published by Strategy Analytics suggests that Apple’s performance was out of the world. In a way, iOS actually outplayed Android in September quarter’s performance. Around 12% of the total shipments was accounted for by iOS smartphone shipments, which was 13.6% in the previous year. Android managed to jump from 84% to 87.5% over the same period of time.
Yes, I do agree that it is not possible for Apple to sustain the same level of performance – that of more than 100% – in the long run. Having only 13.2% of shipments, Apple’s iPhone easily rubs shoulders with its competitors on the basis of revenue and income to the company. This growth in the financial quarter marked a major milestone since this was the first time that the company was responsible for more than 100% profits of the smartphone sales. In the 3rd quarter of 2015, Apple had reached around 90% of the profits.
This achievement in profit comes at the cost of people criticising the company’s growth. Investors are complaining about the sales of iPhone’s dramatic growth and that the company has broken its age-old record for the quarterly performance earlier this year. Apple is expecting to return the same revenue growth in the holiday quarter. This growth is going to be largely marked by the sales of the iPhone 7 and iPhone 7 Plus.
But Tim Cook and the company shouldn’t be in a hurry to throw a party about the quarter’s profit. In the recent earnings, Apple has actually reported a decline in the revenue which is the first ever time since the year 2001.