Apple earns five times higher per unit profit than Samsung
Apple earned the maximum per unit profit at $151 in the third quarter of 2017, followed by its arch rival Samsung which earned $31 profit per unit, a new research from Counterpoint said on Thursday.
"Apple's per unit profit is five times higher than Samsung — that has one of the highest number of models across price bands — and approximately 14 times higher than the average per unit profit of Chinese brands," the research said.
Chinese brands like Huawei, Oppo and Vivo performed similarly in terms of profits per unit, each having an average per unit profit of $15, $14 and $13 respectively.
As compared to other Chinese brands, Xiaomi's per unit profit is lower ($2) as it plays on very thin margins.
"Apple will continue to grow into the holiday season quarter buoyed by the high price iPhone X series. Our recent channel checks across key Apple markets showed the demand for the 256GB version of iPhone X is higher which will boost Apple's profits even higher," Neil Shah, Counterpoint's Research Director, said in a statement.
The research also found that amid global mobile handsets' 13 per cent year-on-year third quarter profits growth, the cumulative profits of Chinese brands crossed $1.5 billion for the first time in a single quarter.
Usually all the profits have been shared by just two brands Samsung and Apple but Chinese brands made inroads this quarter.
"The growth of Chinese brands can be attributed to the diligent efforts in streamlining the supply chain with rising mix of mid to high end smartphones in their portfolio," Tarun Pathak, Counterpoint Associate Director, said.
"Even in the premium segment, players like Huawei are positioning their flagship models just below the premium offerings from Apple and Samsung. This strategy is designed to penetrate the premium market while maximising revenue and profit," he added.
According to Counterpoint, Apple captured nearly 60 per cent of the total profits generated in the mobile handset segment followed by Samsung.
However, Apple's profit share declined by 30 per cent year-on-year due to an increased mix of previous generation iPhones.
"Apple continued to command the lion's share of mobile handset industry profits. Samsung though with relatively stronger demand for Note 8 and mid-tier high-scale J series have been able to capture almost a fourth of the global mobile handset industry profits," Shah highlighted.
In the fourth quarter, the market research firm estimates that the total profits of Apple will improve driven by its iPhone X sales.
Samsung, riding on the success of the Note 8 and S8 series, will continue to perform on par.
Huawei witnessed the highest profit growth of 67 per cent year-on-year due to its portfolio expansion across price bands. Oppo and Vivo captured fourth and fifth spot in the Global Handset profit share mainly driven by their performance in China.
While Xiaomi has made a strong comeback with handset profit growth of 41 per cent year-on-year, it is still behind the market leaders.