iPhone X Alone Generated 35% of the Total Handset Industry Profits in Q4 2017
New Delhi, Mumbai, Hong Kong, Seoul, London, Buenos Aires – April 17, 2018
According to the latest research from Counterpoint’s Q4 2017, Global handset profits declined 1% YoY in Q4 2017 (October-December) as the premium smartphone market did not grow as expected. We believe that the Global smartphone market has already reached its peak with longer replacement cycles and key smartphone OEMs are now under pressure to book profits.
Counterpoint Research Analyst, Karn Chauhan, highlighted, “Global handset profits declined 1% YoY, but Apple grew 1% YoY even with the iPhone X being available for only two months in Q4 2017. The iPhone X alone generated 21% of total industry revenue and 35% of total industry profits during the quarter and its share is likely to grow as it advances further into its life cycle. Additionally, the longer shelf life of all iPhones ensured that Apple still has eight out of top ten smartphones, including its three-year-old models, generating the most profits compared to current competing smartphones from other OEMs.”
Commenting on the performance of Chinese brands, Associate Director, Tarun Pathak, highlighted, “Chinese OEMs cumulative profits crossed 1.3 USD billion during Q4 2017. This was driven by the increased mix of mid to high end smartphones.In fact, the average selling price (ASP) of their flagship devices also increased YoY. Key Chinese players like Huawei, OPPO and Vivo are now looking to scale up the price band, by leveraging their in-house manufacturing capabilities and bringing innovation to their devices.”
Market Summary – Q4 2017:
- Apple remained the most profitable brand, capturing 86% of the total handset market profits
- Further splitting profits by model, the top 10 models captured 90% of the total handset profits.
- Apple and Samsung flagship models, lead in terms of profits as compared to other OEMs.
- iPhone X alone generated 35% of the total handset industry profits. This is a significant landmark, as the model was available in the market for only two months during Q4 2017.
iPhone X generated 5X more profit than the combined profit of 600+ Android OEMs during Q4 2017.
- Apple’s older generation iPhones, iPhone 7 and iPhone 6 still generate more profit than some of the more recent Android flagships from key Chinese OEMs.
- Huawei was the leading brand among all the Chinese brands, with profit increasing 59% YoY.
- With an increased mix of flagship sales for key Chinese brands, we expect profit share of Chinese players to grow in the coming quarters.
The comprehensive and in-depth Q4 2017 handset profit share analysis is available for subscribing clients. The methodology involves insights from supply chain interviews and our Bill of Materials (BOM) tracker. Feel free to reach out to us at press(at)counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries
“Apple remained the most profitable brand, capturing 86% of the total handset market profits” ?
“iPhone X alone generated 35% of the total handset industry profits. This is a significant landmark, as the model was available in the market for only two months during Q4 2017.” ?
But… Apple is DOOMED®, and the iPhone X is a “flop”, right!?! ?
I don’t think you understand how business and finance work. Your comment indicates you have about the same understanding as Donald Trump does.
However, iPhone X is still highly disregarded as being a “flop” of a product which is quite strange. Apparently, the only metric that remains important is market share percentage. As long as a company sells a lot of a product, whether it being profitable or not, that product is considered successful. If market share percentage is the only important metric for success, then any Apple product is headed for failure because there isn’t likely any Apple product will ever lead in market share percentage, especially under a six-month period. Despite the fact it had been said that hardly anyone would be buying the iPhone X due to its high price, it certainly must have been bought by a fair number of people to generate that much profit.
Fundamentally speaking, Apple appears as though it is a well-run business yet it forever remains on the doomed company list. There are always “major concerns” about Apple’s entire business model. Even Facebook is seen by Wall Street to have a “better” business model than Apple despite possible privacy concerns by regulators and that seems odd to me. I suppose a purely software and subscriber-generated business can theoretically be much more profitable than a hardware business and that’s what investors find most attractive despite regulatory risks.
Apple is again the only major tech stock this quarter to be given a high downside risk rating while the FANG stocks just breeze along with tremendous upside ratings. It’s positively weird how Apple, with all the available money they have on hand, isn’t able to change anything in a favorable way about its business model or growth outlook. Would some large acquisition actually make a difference?
Your name seems out dated. Maybe should change to Break.200?
The “only metric that remains important is market share percentage” is hardly true. Otherwise, how could Apple be the most valuable (market cap) company in the world? How could Samsung who sell many more units than Apple be substantially less valuable?
Investors in particular look at profits and excepted profit growth. Market share of industry profits (and revenues) are very important.
Those who said the iPhone X was a disappointment did not refer to unit market share, but to iPhone X sales vs. expectations, following reports that Apple was cutting its orders to suppliers, pointing to weaker than expected sales and thus profits.
It has been a good stock for me.
Numbers like that make me think it can’t last.
Actually iPhone X is very revolutionary and its best smartphone ever made.
No, not one single impressive thing about it, but what is impressive though is how people line up to buy that overpriced thing. And yes, these number do show it ever so clearly, it’s a very overpriced device.
“Over-priced” is subjective. Samsung generally prices their flagship phones in the same range as Apple’s devices (so does Google, by the way). And yet, they’re never accused of being over priced. These numbers just show that more people are willing to pay for an Apple device at those prices than they are any other OEM.
No they don’t. I pre-ordered my S9 and paid under $800 for the phone AND case AND screen protector. The iPhone X ITSELF is $1,000. Try again. And Samsung makes the screens for Apple, by the way.
But to Apple specifications, so who cares who makes it? Are you telling us Samsung makes inferior products? And why is the S9 not doing so well profit-wise? By the way, we just bought our son an S9.
Other devies bring more to the table. More RAM, bigger batteries, better screens etc and no, not at iphone X prices, but significantly lower. Take the P20 pro, as a perfect example.
Here’s a quiz for you:
A device with a 5.5″ 1080p display, 3GB RAM, 3000 mAh battery, dual rear camera setup, front shooter, fingerprint reader, Gorilla glass, dual SIM, expandable storage etc. What does it cost?
Answer $101.99. (Leagoo Kiicaa Mix at AliExpress for manufacturer’s store)
Now add some for the improvement in camera and A11 chipset and you get iphone 8 plus at $799
Overpriced? You bet!
“These numbers just show that more people are willing to pay for an Apple device at those prices than they are any other OEM.”
Yes, it sure does say lot about some people and their relationship to branding.
You apparently have never even seen one in person if you say that. it’s clearly the fastest phone. That’s not impressive? You have a strange definition of impressive. The iPhone X is the best thing Apple has ever made.
Actually I have. It’s embarrasing that one of the richest companies in the world with their 10th anniversay phone, which was set to be their first bezelless device, has some of the thickest bezels available. Even small time chinese manufacturer with their devices at under $100 manages to get slimmer bezels on their tri-bezelless device. They also provide a bigger battery and equal or more RAM, at less than one tenth of the price. Now that’s impressive.
Fast CPU, sure, but for what exactly? Facebook, snapchat and instagram? Please. . . The average iphone user will notice about zero of that, however at least when the time comes after a year or so, when apple will clock it down due to the tiny little battery loosing capacity, it won’t be noticed. At that point RAM will be the bottleneck.
Is iphone X the best iphone ever made? Well, the latest flagship should be the best, but not the best of it’s time.
I’m not even sure it is the best iphone. I prefered ios I would have opted for the 8 plus. Just too shame they didn’t slim down the upper and lower chins on it, they are way to big for 2017/2018, they were too be for for 2015 and 2016 as well.
Though that’s only a small design flaw as compared to the gigantic notch eating away at the X’s supposed 5.8″ screen. And again, just about everyone else whose using ugly notchtes to ruindscreens make the notches smaller than apple did with the X, including the first notched screen in the essential phone.
So with the 8plus one gets a 5.5″ screen, A11, 3GB RAM and a battery life the gives the user 12:32hrs of battery life for surfing.
With the X one gets essentially a 5.5″ screen (5.8″ minus the notch), A11, 3GB RAM and a battery that gives the user 9:26hrs of battery life for suring. With video playback is 8 Plus with 14:55hrs and X with 12:07 hrs.
DxO scores of 97 vs 94 are negligeble in day-to-day photograpy for social media.
I say the iphone 8 plus wins, by a long shot.
But here’s the thing, a device is only as good as it’s asking price, and the asking prices for iphones doesn’t match the hardware. You can get better camera and better battery life for a lower price. The fact that you can get a higher CPU benchmark score in a benchmark app, only matters to teenagers with nothing better to do.
Its the Samsung S8+…but worse
This is native advertising. This isn’t an article. I just read another in BGR saying Android is copying everything Apple does and ripping off their ideas.
Apple fans, I get it. You don’t know how computers work and want something simple to use that looks pretty. But you need to stop acting like an iPhone kicks the snot out of a Galaxy or Pixel 2. You guys literally have never used another phone in your lives. You really have no place having an opinion.
“the iPhone X’s screen IS MADE BY SAMSUNG”
And android is made by GOOGLE, so whats your point?
And your words are paid for by Samsung. They’re gonna want their money back.
You really don’t know what you talk about. Those are facts, not advertising, that illustrate and demonstrate Apple’s dominance in terms of profits. It’s not new that Apple captures most of the industry profits, it has been the case for years. This report is quite interesting in that it provides a model-by-model split, and shows how the iPhone X is profitable. It also proves that Apple’s super expensive iPhone X approach is a success (in terms of profits).
No other company in the smartphone or other industry has achieved this kind of profit dominance -about 85%-90%. This explains why Apple is the most valuable company (market cap) in the world.
If it were as simple as what you claim, so why do other OEM s(in the industry or others) fail to achieve such profit levels, or even half or a third of Apple’s profit margins? Think a little. The simple fact that Apple charges $1000 is hardly an explanation, because you’re missing a key point: people have to buy the product! Otherwise, all other companies would charge $1000 or more, and make even more profits. Think a bit.
The iPhone X screen is made by Samsung, but Samsung does not use this screen, which is it made specifically for Apple. Samsung also provides Apple with RAM and other components. And then what? It is hard to see the relevance of your point…
Your reasoning is exactly why so many companies failed and why Apple succeeded…
Why is it always the most clueless and biased commenters who make statements like these about Apple “fans”? FYI, Apple fans happen to include even Samsung engineers.
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