Apple, RIM And HTC Own 75% Of Smartphone Profits In Q1-2011
This chart shows shows us all the primary handset brands in terms of operating profits which excludes those companies that are loosing money. It is separated in two sections: Smart which stands for Smartphones and Diversified for those companies like Samsung and Nokia that sell both Smart and Dumb phones. You’ll notice how Apple, RIM and HTC are dominating the smartphone market by owning 75% of the smartphone profits in Q1-2011. Apple proves to be the most profitable smartphone brand so far, as they own 55% of that portion.
Surely sales figures may be a whole different story (see the next chart) as we know there are other companies that have sold more handsets than these three companies combined, but the chart is about who’s making the most money in their whole sales infrastructure, and not about who’s selling the most. Just to give you an idea, these three companies make more money than the rest by only owning 16% of the total amount of handsets sold in the market. How can this be? Well, Apple has three different stores (App Store, iTunes Store and iBooks Store) offered on every smartphone they sell, RIM sells their BlackBerry Internet and Enterprise services, and HTC does a great job in building some of the best Smartphones in the market for both themselves and other companies.
This chart shows you all the handset market in terms of volumes sold. Nokia may still be king followed by Samsung in terms of the amount of phones sold, but it’s a given that they’ll slowly move away from Dumb phones as profits move to other companies. Those color coated in blue (Motorola and LG) are the companies that are currently still loosing money.
So where are things going with these numbers? It’s clear that things have changed dramatically in the last three years ever since Apple launched their App Store. Third party apps have existed long before iOS 2.0 was released, but having a simple and integrated “one click” service surely makes a difference in the way consumers behave. I still remember the days where a mobile application would cost $30 on average, and having the App Store drop that to a $5 average has proven to make the whole concept of purchasing apps a different story. Things are no longer just about selling phones, they’re all about the experience offered with each phone that’s sold. Those companies that choose to stick to the old way of doing business may still exist in the minds of some, but are definitely going to loose both relevance and money in the long run.