Apple’s iPhone 12 dialled 75% Q2 global smartphone profits

People just kept on buying these things, Counterpoint confirms

Apple can’t churn out its iPhones fast enough, but while this problem is shared with the rest of the industry one thing it doesn’t share is revenue. Apple’s iPhone called in almost 75% of the overall handset market operating profit and 40% of revenue, despite only achieving 13% market share.

Apple is the profit machine

Counterpoint explains: “Apple has been the biggest profit and revenue generator in the handset business. In Q2 2021, it captured 75% of the overall handset market operating profit and 40% of the revenue despite contributing a relatively moderate 13% to global handset shipments.”

There is one concern

This is down on the peak 50% revenue share Apple achieved in Q4 2020, up from 28% in Q3 20.

However, the data does reflect a couple of critical realities, as follows:

• Apple shipped iPhone 12 later than usual in October, which enjoyed massive pent-up demand in Q4.
• iPhone sales traditionally slow in Q3 as people prepare for the next generation device.
• That Apple still captured 40% revenue in Q2 21 is a Very Good Thing.
• It means iPhone 12 sales remained steady across Q4 20 to Q2 21. We’ll learn the extent to which they did at the company’s fiscal call.

While we have heard Apple may have been forced to reduce production, we have also heard that sales remain very strong even in contrast to iPhone 12. Any lack of availability will likely help boost Q1 22 sales of the iPhone 13.

Data c/o Counterpoint, click image for more

What the analysts think

What also helps is interoperability between its devices:

“The convenience with which one may shift between a Mac, iPad and an iPhone encourages users of one Apple device to stay within the Apple ecosystem by acquiring other of the brand’s devices,” Counterpoint said.

“This is made possible by Apple’s significant control over both hardware and software, enabling a seamless shift of work on an app between multiple devices. While this has been the case for some time, it has become particularly pronounced with the stickiness of music, media, news, storage, etc. Apple is likely to retain this edge, enabling it to continue charging premium prices for its handsets, thus maintaining high operating profit margins.”

What about other vendors?

Samsung usually follows Apple in revenue and profit share said Counterpoint. Samsung has failed to generate the second-highest revenue share only twice Q4 2019 and Q2 2020, when Huawei reached the number two spot. In terms of profit, however, Samsung has consistently been the number two player for the past several quarters.

Following the imposition of US sanctions against it, Huawei has declined while other Chinese OEMs, particularly Xiaomi, OPPO and vivo took its place. These firms were the biggest revenue generators respectively after Apple and Samsung in Q2 2021.

Can China aim higher?

The analyst firm will now monitor to see how Xiaomi and other Chinese OEMs convince their customer base, which they created by selling high-spec devices at relatively low ASPs, to part with larger sums of money that can afford them already popular and well-regarded premium devices. You can learn more concerning Counterpoint’s thoughts here.

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