Apple Responsible For 20% Of Cell Phone Industry Revenue
We knew the iPhone was exceptionally profitable for Apple, but a report from Deutsche Bank analyst Brian Modoff finds it to be on a much larger scale than we expected. According to his findings, the iPhone has only 1% of the unit market share in the cellphone industry, but the revenue Apple rakes in from it is a colossal 20% of the whole industry.
Currently Apple and RIM make up 38% of the cellphone industry’s total operating profit and just 3% of sales. Modoff claims that by the end of 2009, this will have grown to 5% of unit sales and 58% of the total industry profit.
The two companies’ outsize share of profits underlines the shift in the wireless industry toward feature-rich devices accenting easy-to-use software and away from an emphasis on hardware. Smart phones account for only about 13% of total cellphone sales globally, but the segment is growing, despite a drop in the broader cellphone market. Apple and RIM had about 32% of the smart-phone market between them in the first quarter, estimates IDC.
Not surprisingly, the driving force behind these numbers is carrier subsidies. Apple is believed to get $400 from AT&T for every iPhone sold, while BlackBerry gets around $200 and a basic phone gets $100.