Apple is turning the mobile industry upside down with the recognition of its iPhone. Apple earns the largest portion of cellular market earnings by a huge margin, even though it has got the smallest market share. Apple’s iPhone is so popular the “Antennagate” issue of last summer had virtually no effect on sales. Analysts are saying Apple’s control of the mobile industry makes it unlikely that Android, which depends on devices that compete on price, could ever pose a threat.
Apple prospers via invention
Apple’s domination of the mobile industry was reported on Sept. 21 by Fortune on CNN.com. Apple stock was given a “buy” rating and a $ 356 per share price target by Canaccord Genuity, a fund market analysis firm. The analyst’s recommendations involved data showing how Apple is turning its innovations into cash. The business sold 17 million iPhones in the first half of 2010–a 3 percent a share of the market. Samsung, Nokia and LG–the world’s three largest handset makers–sold 400 million units combined. Apple collected 39 percent of the mobile industry’s profits during that time. Samsung, Nokia and LG shared 32 percent of industry profits. To put Apple’s performance in context, Canaccord Genuity said the other handset corporations scramble to make a profit and an operating margin of 10 percent is acceptable. With its iPhone, it is believed that Apple enjoys a 50 percent gross profit on top of a 30 percent operating! margin.
Apple does not live by recognition alone
Producing 3 percent of an industry’s products for making almost 40 percent of the industry’s profit was unheard of until Apple came along with the iPhone. Apple has far outgained its rivals with more than slick marketing campaigns, according to Jason Mick at Daily Tech. Mick writes that since the iPhone is so popular, AT and T has given Apple an extremely lucrative contract to grow its subscriber base. Apple gains another profit advantage over Android competitors by using less expensive hardware. Plus, Apple is very aggressive in negotiating with manufacturers for higher volume and lower prices. Apple’s battle plan has resulted in piles of cash to spend on innovation in the iPhone/Android war. However, that could possibly be a moot point. Mick figures that Steve Jobs is not all that concerned with Android. Catering to a loyal core of iPhone enthusiasts has gotten Apple this far.
The iPhone’s energy develops
Apple haters hoped Antennagate would be Apple’s comeuppance. However the media maelstrom amounted to nothing. The media’s flogging of “Death Grip” reception interference failed to choke off sales of the iPhone 4G. When Consumer reports tested the iPhone reception problem and said it could not recommend the iPhone, Apple bashers reacted with glee. It still won’t. But the iPhone marches on. According to Computerworld, the J.D. Power and Associates consumer satisfaction rankings for smartphones lists the iPhone at the top of the list—its fourth consecutive first place finish.
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