iPhone Generated Record-Breaking Share of Profits Last Quarter Despite Continued Sales Decline

iPhone sales may have declined for three consecutive quarters, but the latest data from research firm Strategy Analytics suggests Apple is unsurprisingly still doing exceptionally well in the smartphone market.

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Apple captured a record 91% of profits in the worldwide smartphone market in the third quarter, or $8.5 billion of the overall $9 billion in profits recorded by all vendors combined, according to Strategy Analytics.

Apple's biggest competitor Samsung was nowhere to be found on the list, as Chinese smartphone makers Huawei, Vivo, and OPPO took the second, third, and fourth spots respectively with between 2.2% and 2.4% of profits.

"Apple’s ability to maximize pricing and minimize production cost is hugely impressive and the iPhone continues to generate monster profits," said Linda Sui, Director at Strategy Analytics. "Huawei, Vivo and OPPO are the next three most profitable smartphone vendors globally this quarter, but they are still a long way behind Apple."

Apple's profit margin is impressive given no other smartphone maker generated more than $200 million in profits during the quarter, according to Strategy Analytics. Apple's share of profits was some 40× larger than its closest competitor.

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iPhone sales declined on a year-over-year basis in the second, third, and fourth quarters of the 2016 fiscal year, after rising only marginally during the first quarter, which makes Apple's record-breaking smartphone profits even more impressive.

BMO Capital Markets analyst Tim Long previously estimated Apple captured 103.6% of smartphone industry profits in the third quarter. Long's estimate factors in companies that lost money during the quarter, placing Apple above 100%.

Top Rated Comments

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49 months ago
Apple's 10-year plan: in 2026, they will sell just ten phones for $2 billion each and still have the highest margins.

And they will all be unapologetically thin.
Score: 67 Votes (Like | Disagree)
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49 months ago
Sounds to me like their profit margins increased more than their sales decreased. Pretty typical for a fashion accessory brand.
Score: 53 Votes (Like | Disagree)
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49 months ago
Apple really is rudderless these days. Blowing billions of dollars on hair brained driverless car projects, acquiring headphone companies, selling ridiculous gaudy $20K watches....

I love Apple, I have owned every iPhone ever made, but it's sad to watch them try to turn in to a fashion/accessory brand and completely losing focus on what they do best. It's absolutely disgusting that they only JUST this year increased the base model iPhone from 16GB to 32GB. They should have done that years ago. It just goes to show that Apple cares more about profits than anything else, even at the expense of their long term brand.

The future of tech is AI. Apple should be starting gigantic research initiatives in the field of AI instead of wasting time with gimmicky watches and car projects. Apple has done an excellent job on making a truly impressive CPU/GPU for the iPhone (the A10 is amazing), and I wish they would focus more on the raw tech rather than trying to make their phones & laptops even more thinner and prettier.
Score: 49 Votes (Like | Disagree)
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49 months ago
Somebody make Apple Macs great again .....Please
Score: 33 Votes (Like | Disagree)
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49 months ago


7) This profit-first mentality has worked for Apple for decades, as it has for every other company ever...

Completely wrong, when Apple focused on profits-first and vision/innovation second, they got obscenely greedy and nearly killed Apple in the 90s. Blackberry focused on profits, rested on laurels and forgot to innovate, move forward, and died. Vision/innovation has to be first, then profits will follow. Steve Jobs described the demise of Apple in the 90s:

“they cared about making a lot of money… they got very greedy and instead of following the original trajectory of the original vision which was to make this thing an appliance and get this out there to as many people as possible, they went for profits, and they made outlandish profits for about 4 years, one of the most profitable companies in america for 4 years, and what that cost them was their future, because what they should have been doing was making rational profits…”

See minute 39



Steve then came back at the end of the 90s and saved Apple by innovating with iMac, digital hub, changing the world with iPod, then profits followed.
Score: 32 Votes (Like | Disagree)
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49 months ago

Somebody make Apple Macs great again .....Please

Start by firing Phil Schiller and Tim Cook.
Score: 23 Votes (Like | Disagree)

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