New Article Explains why APPLE makes more profits than Samsung
despite that Samsung has twice the unit volume of Mobile Phones worldwide, vs. Apple. Gartner just came out with a report. Worldwide sales of "feature phones" i.e. cell phones below abilities of "smartphones", declined 1.7% last year. Smartphones on other hand grew about 25% in unit sales worldwide. SAMSUNG makes twice as many Phones as Apple, but half Samsung's phones approximately, are in the low-cost "feature phones". Perhaps there are No Profits in those cheapest phones? Nokia mainly makes the Feature Phones. So Samsung may only be making profits on its Smartphones, and the rest of Samsung's half of 300 milion phones sold per year, may be a 'worthless business' of cheap feature phones, it, Nokia and others may make $0 on. APPLE on other hand only makes the Smartphones, which is where the profits are, and which are growing in sales at nice clip. Plus Apple is able to get higher average price for its phones than Samsung,... and Apple spends alot less on Ads and Marketing than Samsung, yet still gets a higher price. (It wasn't Apple that had to buy Superbowl ads, it was Samsung). Spending less on Ads, is one way Apple has higher profit margins
Hard to believe Apple can compete with Samsung. As things stand right now Tim Cook is in denial to accept that a giant competitor is ready to eat his lunch. IMO, the correct thing for him to do is to lower the I-Phone prices by $100 or more and wake up and smell the coffee.
AAPL doesn't merely compete, Apple cleans up on 70% of the worldwide profits in Smartphones, and it now even able to sell its IPHONE5 in INDIA for $850. Its sales still small at only 4% of that huge units-volume market, nonetheless Apple has grown 400% in India in the past year AND is selling at the highest priced point and making profits.
Go read the Gartner Group report just came out in Articles on WSJ and Reuters today Feb. 13. Turns out half of Samsung's unit-volume in phones, is cheap feature-phones, and that segment is declining and not where the profits are. Turns out in just Smartphones, growing fast, Apple is almost as big worldwide as Samsung's unit numbers, but Apple is much bigger than Samsung in Smartphone Profits and also U.S. Smartphone Market Share. And even in India where Samsung has 51% of the market for all phones, Apple has just gone from 1% to 4% of the market last quarter, all in HIGH PRICED SMARTPHONES.
Ignoring your silly comment. To put it simply. The Gartner Group article just came out, and on Reuters, points out that the Smartphone end of the Market is growing fast, I just re-read it, actually 38% unit growth last quarter worldwide. And that's the only end of the market APPLE is in. Apple is therefore better "positioned" than Samsung or Nokia, both which make half or more of their phones in the declining low-cost no-profits Feature-Phone end of the market.