Date:07/10/17
According to Counterpoint Research Market Monitor tracker, the global mobile handset profit pool declined 10% YoY during Q2 2017. The main reasons were, an increase in the mix of cheaper iPhone models, growth of less profitable mid-tier models in prepaid markets from vendors like Xiaomi as well as sales mix shift for Samsung to mid-tier J and Grand series portfolio.
Apple dominated the global profit share, holding 65% of the pie with just 9% of the total handset shipments during Q2 2017.
Samsung has regained profitability and reputation over the past few quarters, after the Note 7 debacle with the help of its new Galaxy S8 series flagship. The Galaxy S8 and S8 Plus are gaining attention amongst users with their Infinity display, beautiful design and virtual assistant Bixby. However, the major shift in sales towards mid-tier models has caused Samsung’s profits to decline almost 30% YoY.
The profit of Huawei, OPPO & vivo combined crossed a billion-dollar mark growing a healthy 43% YoY during the quarter. The Chinese brands are growing fast when compared to industry leaders due to their high-quality offerings at competitive prices with attractive designs and innovative features. Aggressive marketing campaigns and strong promotions have helped them further.
Asian region has been the linchpin for the growth for this trio, however, expanding beyond Asia markets will definitely put significant pressure on their operating margins in near- to mid-term.
Premium segment (>US$400 wholesale price) contributed to almost 80% of the global handset profit during Q2 2017.
Apple dominated the premium segment where profit margins are high as most of its profits comes from above US$400 models.
We estimate that the Apple iPhone X will further increase profits for the iPhone maker in the premium segment and overall to record levels.
Within its individual portfolio, for Samsung, US$400+ segment contributes to almost two-thirds of the total Samsung profits.
The following exhibit 3 represents the comparison of wholesale average selling price (ASP) of Apple and Samsung with the industry average across different regions.
It’s very important to analyze the mix of portfolio and focus of these two leading profit makers by regions. Thus, how they are aligned to generate significant profits out of these individual markets, contributing towards their global profit coffers.
The average selling price for iPhones in developed regions is approximately 150% higher as compared to the regional industry ASP whereas in developing regions it can go as high as 650% compared to the overall industry ASP in that region.
This underlines the huge global price differential the iPhones have with respect to competitors and “premium brand equity” it tries to cash in on.
Samsung on the other hand has a mix of products across different price bands that help the brand maintain an ASP that does not hugely vary from the regional ASP. This in-turn helps the brand move more units or revenues due to the various price differentials but not profits.
80% of Global Handset Profits Comes from Premium Segment
According to Counterpoint Research Market Monitor tracker, the global mobile handset profit pool declined 10% YoY during Q2 2017. The main reasons were, an increase in the mix of cheaper iPhone models, growth of less profitable mid-tier models in prepaid markets from vendors like Xiaomi as well as sales mix shift for Samsung to mid-tier J and Grand series portfolio.Apple dominated the global profit share, holding 65% of the pie with just 9% of the total handset shipments during Q2 2017.
Samsung has regained profitability and reputation over the past few quarters, after the Note 7 debacle with the help of its new Galaxy S8 series flagship. The Galaxy S8 and S8 Plus are gaining attention amongst users with their Infinity display, beautiful design and virtual assistant Bixby. However, the major shift in sales towards mid-tier models has caused Samsung’s profits to decline almost 30% YoY.
The profit of Huawei, OPPO & vivo combined crossed a billion-dollar mark growing a healthy 43% YoY during the quarter. The Chinese brands are growing fast when compared to industry leaders due to their high-quality offerings at competitive prices with attractive designs and innovative features. Aggressive marketing campaigns and strong promotions have helped them further.
Asian region has been the linchpin for the growth for this trio, however, expanding beyond Asia markets will definitely put significant pressure on their operating margins in near- to mid-term.
Premium segment (>US$400 wholesale price) contributed to almost 80% of the global handset profit during Q2 2017.
Apple dominated the premium segment where profit margins are high as most of its profits comes from above US$400 models.
We estimate that the Apple iPhone X will further increase profits for the iPhone maker in the premium segment and overall to record levels.
Within its individual portfolio, for Samsung, US$400+ segment contributes to almost two-thirds of the total Samsung profits.
The following exhibit 3 represents the comparison of wholesale average selling price (ASP) of Apple and Samsung with the industry average across different regions.
It’s very important to analyze the mix of portfolio and focus of these two leading profit makers by regions. Thus, how they are aligned to generate significant profits out of these individual markets, contributing towards their global profit coffers.
The average selling price for iPhones in developed regions is approximately 150% higher as compared to the regional industry ASP whereas in developing regions it can go as high as 650% compared to the overall industry ASP in that region.
This underlines the huge global price differential the iPhones have with respect to competitors and “premium brand equity” it tries to cash in on.
Samsung on the other hand has a mix of products across different price bands that help the brand maintain an ASP that does not hugely vary from the regional ASP. This in-turn helps the brand move more units or revenues due to the various price differentials but not profits.
Views: 315
©ictnews.az. All rights reserved.
Similar news
- Azerbaijani project to monitor disease via mobile phones
- Innovative educational system to be improved under presidential decree
- NTRC prolongs license of two TV and radio organizations for 6 years
- Azerbaijan establishes e-registry for medicines
- Azerbaijani museum introduces e-guide
- Nar Mobile opens “Nar Dunyasi” sales and service center in Siyazan city
- International conference on custom electronic services held in Baku
- OIC secretary general to attend COMSTECH meeting in Baku
- Azerbaijan develops earthquake warning system
- New law to regulate transition to digital broadcasting in Azerbaijan
- Azerbaijani State Social Protection Fund introduces electronic digital signature
- Intellectual traffic management system in Baku to be commissioned in December
- Tax Ministry of Azerbaijan started receiving video-addresses
- World Bank recommends Azerbaijan to speed up e-service introduction in real estate
- Azerbaijan to shift to electronic registration of real estate
