While almost the entire Smartphone world faced a hard time in 2019 in overall handset revenues, Apple managed to grab over 66% of the total profit. It wouldn’t be surprising to see this massive tech company gets more than half of the shares in the profits of the Smartphone industry for the premium users’ base in the major markets of Japan, the US, and the UK yield great levels of profit.
Following the study from Counterpoint Research, it is evident that Apple profited for 32% of the entire handset revenue in the third quarter of 2019, whereas the global handset profits declined 11% to $12 Billion. Which means this is before the holiday season. And as the research analyst with CR says, the profits will add up in Apple’s basket in the holiday season with the emergence iPhones’ new line.
From among the top 10 brands, only Huawei and Samsung (17% of total profits) could increase their shares of revenue annually, says CR. A good initiation for the Samsung Galaxy Note 10 series coupled with increased mix of Galaxy A series is the most probable reason for the second position on the list.
Coming to the reasons for decline of the industry, it was a result of the over mixing of entry to mid-tier products accompanied by a fall in revenues for the OEMs. As for the Chinese smartphone companies, their products operate at low-profit rates.
However, the picture has been much better than earlier owing to the wide expansion in the Indian and other non-Chinese markets. As always these Chinese brands built with competitive mindsets are now looking forward to monetize their user base with the use of schemes and services like IoT Products, financial services and so on.
Also in the near future, acceptance of 5G services in Xiaomi, Realme, Vivo, Oppo and other such Chinese brands might help these brands to increase their ASPs i.e., Average Selling Prices. It is this moderate ASP that is holding the Chinese brands back as increasing them is hardly an option because of the longer consumer holding period as well as lower pricing of Apple on a few key SKUs.
Stay tuned for more!